National and regional rates of growth showed clear signs of winter chills in November, as summer buying activity gave way to the typical winter slow down. Nationally, home prices cooled off to a 10.8% year-over-year growth, a slight tapering over the previous quarter’s 11.0% yearly growth.
More notable moderation took place in quarterly growth. November national quarterly growth of 1.8% was nearly cut in half when compared to the previous quarter’s 3.3% growth. The regions experienced moderation over yearly and quarterly rates of growth as well, with few exceptions. The Midwest and the Northeast were the only regions to see slight gains in yearly rates of growth over the previous quarter, according to Clear Capital’s Market Report
While REOs and short sales accounted for 21.6% of all national sales over the previous quarter, it is substantially lower than peak rates of 41.0% in 2011Distressed sale activity, as a portion of total sales, can increase over winter due to some fair market sellers waiting for the more active spring season to list their homes.
Prior to the recovery taking hold, increasing distressed sale saturation rates pushed prices down. Yet, the First-In-First-Out recovery saw distressed markets drive gains, creating a new relationship between high levels of distressed sale saturation and price gains.
The Phoenix MSA has embodied this behavior as one of the first markets to exhibit a sustained recovery alongside its high levels of distressed sale saturation. After significant gains, the market’s growth is now moderating with quarterly growth of 2.4%, less than half of the current annual rate of growth when annualized. Having led the recovery for the better part of a year, Phoenix no longer sits on the top 15 performing list. Other metro markets also confirm higher levels of distressed sale activity can now correlate with higher price gains.
Average rates of yearly growth in the top performing markets were 19.2% in November, while average distressed sale saturation sat at a relatively high 24.5%.
Low performing markets, on the other hand, had average rates of yearly growth of 4.9% in November, while average distressed sale saturation sat at a relatively low 17.2%.