Its latest report also shows that quarterly, national and regional gains saw a slight uptick over April but price growth remains mixed at the metro level.
The West, South, Northeast and Midwest saw quarterly gains of 2.4%, 1.1%, 0.8% and 0.7%, respectively while nationally, home prices saw a 1.3% quarterly gain, and a 8.2% annual gain.
But the data shows that price trends at the national and regional levels can tell a very different story. Las Vegas saw yearly gains soar by 27%, surpassing the yearly gains of 25.7% in Phoenix. This is the first time since April 2012 that Phoenix has not led the top 50 major metro markets in yearly gains.
While Las Vegas yearly gains continue to pick up steam, the market has a long road ahead, according to Alex Villacorta, vice president of research and analytics at Clear Capital.
‘Current prices remain 57.1% below the peak and would need to climb another staggering 133.3% to reach peak values. It would take Las Vegas home prices nearly four years at the current annual growth rate of 27% to get back to 2006 levels. While this is unrealistic over the short or even mid term horizon, it puts the current gains into context,’ he explained.
He pointed out that Phoenix, on the other hand, has seen a slight moderating pattern over the last several months, a healthy move for a market that has been very hot over the last year. ‘This market also has a long road ahead, with prices still 45.9% below their peak,’ he said.
The data also shows that the severity of quarterly declines in the lowest performing markets subsided slightly in May. Only six out of 15 of the lowest performing markets saw declines and five of those saw less than 1% in losses. Cleveland was the exception, where quarterly losses of 4.3% fuelled yearly declines of 4%.
May home price trends confirm the recovery continues to mature. While there’s no questioning the validity of the recovery at this point, performances at the local level remained mixed when considering strength, sustainability and relative positions to 2006 prices,’ explained Villacorta.
‘For example, Las Vegas' strong yearly gains represent a rebound from a severe correction rather than bubble like price growth. Despite 27% yearly growth, this market remains 53% below peak levels, significantly more depressed than most markets. But some markets like Cleveland have yet to find a foothold in the recovery. Both Las Vegas and Cleveland are great reminders that granularity in home price trends remains key,’ he said.
‘In general, national price trends are at a relatively healthy point and the diversity in price performance at the local level is mainly a function of the severity to which a particular housing market was hit during the housing crash,’ he added.
In general, he expects current gains to moderate over the near term. ‘Certainly the expectation for moderation is less flashy than home prices racing their way back to pre crisis levels. Yet moderation provides a sense of stability that is essential for both consumers and lenders, as it allows for both parties to calibrate to the current housing landscape,’ Villacorta concluded.
