WALTHAM, Mass., June 19, 2014 /PRNewswire-iReach/ -- Pro Teck Valuation Services' May Home Value Forecast (HVF) details affordability indexes for Houston and Miami ZIP codes and separately highlights softer housing trends in the East and other metros.
In this month's HVF update, the authors state that an affordability index is derived by looking at the median income for a particular area as a ratio to the mortgage payment needed to purchase a median-priced home. They cite the Collateral Analytics Affordability index, which also examines loan-to-value percentages for a particular area to adjust for more affluent buyers who often put more money down. The index has a range between 0-300. An index score above 100 signifies that a household earning the median income has more than enough income to afford the mortgage. Lower scores suggest more income is needed to cover mortgage expenses.
"Although home prices have been rising steadily this past year, housing is still very affordable in historical terms," said Tom O'Grady, CEO of Pro Teck Valuation Services. "Most markets still have a way to go to reach their previous peak. With some modest improvement in employment and still historically low mortgage rates, housing as a whole is affordable. The real problem for many potential home buyers is other debt such as student loans for first time buyers and tight credit."
The HVF update highlights Miami's affordability, which shows that when Miami's prices peaked in 2007, affordability predictability hit its low of 58. As prices fell, affordability rose to a peak of more than 160. Currently, Miami is holding steady around the 140 mark.
"On the other hand, Houston, historically very affordable, did not see the bubble of many other markets and with strong employment, housing has seen prices increase leading to a down turn in affordability. Over the last year the affordability index went from 245 to 200, still very affordable — but some markets in good commuting distance to downtown have seen an even more dramatic increase in home values and a correlating drop in affordability. In 77007 (Washington Avenue) and 77009 (Near Northside), the affordability index is closer to 50," added O'Grady.
This month's Home Value Forecast update also includes a listing of the 10 best and 10 worst performing metros as ranked by its market condition ranking model. The rankings are run for the single- family home markets in the top 200 CBSAs on a monthly basis. They highlight the best and worst metros with regard to a number of leading real estate market indicators, including: sales/listing activity and prices, months of remaining inventory (MRI), days on market (DOM), sold-to-list price ratio and foreclosure and REO activity.
"California continues to lead Home Value Forecast's top ten," said O'Grady. "What's amazing to see is the sales price as a percentage of list price ratio, where the top four are at or above 100%. Housing stock is very low according to the months of remaining inventory, leading to more competition for homes."
May's top CBSAs include:
Los Angeles-Long Beach-Glendale, CA
San Rafael, CA
Santa Rosa, CA
San Diego-Carlsbad, CA
San Francisco-Redwood City-South San Francisco, CA
San Luis Obispo-Paso Robles-Arroyo Grande, CA
Houston-The Woodlands-Sugar Land, TX
Oklahoma City, OK
"The bottom ten are fairly consistent in three indicators: sales change percentage; active days on market percent change; and, foreclosure ratio percent change," said O'Grady. "Sales are slowing down, days on the market are growing, and the percentage of foreclosure sales are increasing, all leading to a softer market. The majority of the bottom ten are located in the East."
The bottom CBSAs for May were:
Lakeland-Winter Haven, FL
Pensacola-Ferry Pass-Brent, FL
About Home Value Forecast
Home Value Forecast (HVF) is brought to you by Pro Teck Valuation Services. HVF provides insight into the current and future state of the U.S. housing market, and delivers 14 market snapshot graphs from the top 30 CBSAs.
HVF is built using numerous housing and economic data sources. The top 750 CBSAs as well as data down to the ZIP code level for approximately 18,000 ZIPs are available with a corporate subscription to the service. To learn more about Home Value Forecast and Pro Teck's full suite of residential real estate valuation products, visit www.proteckservices.com. You can find Pro Teck on Twitter at @ProTeckServices.
Reporters interested in national, regional or metro level housing data tailored to meet story needs, please email your inquiry to email@example.com.
A Core Based Statistical Area (CBSA) is a U.S. geographic area defined by the Office of Management and Budget (OMB) based around an urban center of at least 10,000 people and adjacent areas that are socioeconomically tied to the urban center by commuting. The term "CBSA" refers collectively to both Metropolitan Statistical Areas (MSA) and micropolitan areas. Micropolitan areas are based around Census Bureau-defined urban clusters of at least 10,000 and fewer than 50,000 people. Metropolitan Statistical Areas (MSAs) are defined as urban clusters of more than 50,000 people.
Media Contact: Janice Walker, Pro Teck Valuation Services, 781-290-6528, firstname.lastname@example.org
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SOURCE Pro Teck Valuation Services