Housing Recovery Index
According to a new survey index released by RealtyTrac® (RT), “the nation’s leading source for comprehensive housing data,” the housing market in America has “shifted to recovery mode” in the last 18 months.
RTs Housing Market Recovery Index (Housing MRI), its “first-ever” release, is based on calculations of seven different factors relating to the health of the real estate market. These factors include evaluations of the unemployment rate, underwater loan percentages, foreclosure activity percent change from peak, distressed sales percent of total sales, institutional investors share of total sales, cash purchases share of total sales, and median home price percent change from bottom. (www.realtytrac.com)
RT ranked 100 major U.S. metros based on the established criteria for the total recovery index and found that assorted markets in California, New York and Florida are leading the housing recovery, while certain other select markets in Maryland, Pennsylvania and Illinois are seen as lagging the furthest behind in the recovery.
The above seven factors were indexed for each market with national averages used as a baseline, and all seven indexes being averaged to calculate a total recovery for the index. Data from the index is available for more than 900 additional metro areas nationwide.
Daren Blomquist, vice president at RealtyTrac says that, “Median home prices have bottomed and are now rising in all 100 ranked markets. Likewise, foreclosure activity is past its peak in all 100 ranked markets — although foreclosure numbers have been rebounding recently in some areas where a more lengthy judicial process created a backlog of pent-up foreclosure activity.”
Bloomquist also notes that the housing market has “clearly” shifted to a recovery mode as home prices have risen consistently while foreclosures have fallen “closer to pre-bubble levels.” However, he does add that symptoms of the distress in the markets still linger in some metro areas in the form of a high percentage of underwater borrowers and distressed sales.