US sees signs of price growth slowing in the West and taking off in the South
The pace of property price growth is changing in the United States on a regional basis with performance in the West slowing and the South seeing a new dynamic market, the latest research shows.
Regionally, the South and Midwest each recorded quarterly price growth of 0.1% since last month, bringing quarter on quarter growth rates to 0.9% and 1.0% respectively, according to the data from real estate firm Clear Capital.
While the West is still outpacing the rest of the nation at 1.1% growth quarter on quarter this is actually a decrease from the previous month which the firm says is signalling a potential loss in momentum for the region.
These three regions are now all within a 0.1% quarterly growth margin of each other, the first time this has happened since the fourth quarter of 2011, which coincidentally was the last time the West was not leading regional quarterly growth.
Outside of these regions, quarterly growth in the North East remains steady at 0.3%, which was no change from last month.
Nationally, quarterly home price growth has increased slightly, an uptick of 0.1% from 0.8% to 0.9%. Annual growth figures are also on the rise reaching 5.5%, a 0.3% improvement over annual growth rates from this time last year.
Additionally, nationwide distressed saturation rates have fallen 0.7% from an average of 13.9% to 13.2% in just the last month, with the Western average decreasing to a current national low of just 9.2%.
Southern markets continue to dominate the top performing markets with eight of the 15 top performing metros in this region. The Memphis, TN metropolitan area saw the biggest growth in November with a 2.6% increase over the last quarter. Elsewhere quarterly growth appears to be holding relatively steady or even slowing down.
The report says that market performance in the South has been relatively impressive for 2016, as the median home price in the region has risen 5.7% since this time last year. Even as markets in the region continue to post impressive gains, the median price per square foot in top performing southern markets remains well under the national benchmark. For the region as a whole, an average price per square foot of $106 is almost $30 less than the national average at $135.
‘As the Western region’s long standing housing price growth dominance is beginning to fade, the South is the clear front runner as we begin to look forward to 2017 for top performing markets,’ said Alex Villacorta, vice president of research and analytics at Clear Capital.
‘The region hosts several of the nation’s top-performing and most talked about metropolitan markets like Dallas, Nashville, Miami, and others. Combined with its relatively low cost of living, the region appears to be gaining popularity among home buyers, signalling a new opportunity for investors and traditional home buyers alike as affordability remains an issue in many other markets, namely those in the West and North Eastern regions,’ he added.