Housing Market Health Indicators

As the twin trends of rising home prices and low inventory continue in many U.S. markets, the latest CoreLogic Market Health Indicator finds that most studied markets are still healthy or have relatively low risk. However, 12 of the 100 largest metros were identified as high-risk in Q1 2018, up from nine a year prior.

The CoreLogic Market Health Indicator “evaluates whether individual markets have high, normal, or low risk by analyzing several economic factors,” according to CoreLogic’s report.

The data analyzed for CoreLogic’s Market Health Indicator includes home price trends from the CoreLogic Home Price Index (HPI). It then compares those home prices against “the long-run sustainable levels that can be supported by local market fundamentals, such as disposable income.” It also compares examines home price appreciation relative to rents.

“In addition to these fundamental drivers that justify the level of home prices, the analysis also accounts for speculative activity measured by the CoreLogic Flipping Index and CoreLogic Fraud Index,” states the CoreLogic Market Health Indicator post. “If the Flipping Index is too high, then investors are speculating on short-term home price gains, and vacancy rates may be elevated. Lastly, housing bubbles are often accompanied by widespread mortgage fraud.”

The high-risk metro area with the highest HPI growth since 2012, according to CoreLogic, is Las Vegas-Henderson-Paradise, Nevada, coming in at 96 percent. The Las Vegas metro also saw 33 percent rent growth since 2012.

“Contrary to last year, when all high-risk markets were in either Florida or California, metro areas in Nevada, Texas, Louisiana, New York, and Maryland have now emerged as high-risk markets,” states the CoreLogic report. The other 11 high-risk metros identified by CoreLogic in Q1 2018 include:

Los Angeles-Long Beach-Glendale, California (77 percent HPI growth, 32 percent rent growth) Miami-Miami Beach-Kendall, Florida (68 percent HPI growth, 24 percent rent growth) Orlando, Kissimmee, Sanford, Florida (65 percent HPI growth, 31 percent rent growth) Lakeland-Winter Haven, Florida (64 percent HPI growth, 22 percent rent growth) Tampa-St. Petersburg-Clearwater, Florida (62 percent HPI growth, 20 percent rent growth) Jacksonville, Florida (48 percent HPI growth, 18 percent rent growth) Houston-The Woodlands-Sugar Land, Texas (46 percent HPI growth, 21 percent rent growth) New Orleans-Metairie, Louisiana (39 percent HPI growth, 16 percent rent growth) San Antonio-New Braunfels, Texas (36 percent HPI growth, 16 percent rent growth) Nassau County-Suffolk County, New York (22 percent HPI growth, 1 percent rent growth) Baltimore-Columbia-Towson, Maryland (16 percent HPI growth, 5 percent rent growth)

You can read the full CoreLogic Market Health Indicator report by clicking here.

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