June 1, 2015--Sorohan, Mike email@example.com
Clear Capital, Reno, Nev., said seven local housing markets raise the potential of moving into “bubble” territory--a word not raised since the housing crisis.
The company’s Home Data Index Market Report said seven metropolitan areas--Boston; Minneapolis; Chicago; Oxnard/Thousand Oaks/Ventura, Calif.; Bakersfield, Calif.; Riverside/San Bernardino/Ontario, Calif.; and Miami/Fort Lauderdale, Fla.--considered “major” in density and culture, which are in bubble territory.
“These markets have had two years of consecutive quarterly softening, meaning each subsequent quarter, over the two year period starting May 2013, has seen less growth than the previous quarter,” said Alex Villacorta, vice president of research and analytics with Clear Capital. “We’ve ruled out seasonality since two summers and winters have gone by with no observed impact on the softening.”
Overall, the report said most parts of the country continued to struggle to shake off the winter slowdown. Data through May reported an 0.1 percent increase in the national quarterly growth rate, from 0.5 percent to 0.6 percent, the first quarterly increase since November and the first monthly increase in seven months.
“Small increases or declines in quarterly gains reflect both the normalization off of the ‘correction-to-the-correction’ and the uncertainty of the health of the housing market,” Villacorta said.
Villacorta said while the Midwest rebounded from April’s negative threshold of -0.10 percent, back into positive territory at 0.10 percent, the region’s volatility stands to stymie consumer confidence through the spring and summer buying seasons.
Villacorta added while key markets with booming tech economies, such as San Francisco, appear to already be in “bubble” territory, “seven markets is certainly cause for concern and cumulatively bubbles bursting across the nation could put the June and spring rush for housing on the back burner.”