California and the western U.S. played home to the nation’s healthiest housing markets in October, accounting for five of the top-30 largest metro markets covered by Zillow.
Measured on a scale of 0 to 10, Zillow’s Market Health Index (MHI) is designed to illustrate the current health of a region’s housing market relative to similar markets nationwide.
Of the top-5 markets, four were clustered in California—San Jose, with a an MHI reading of 9; San Francisco (8.9); Los Angeles (8.6); San Diego (8.4); and Denver (8.1).
“Rapid home value appreciation in the West, particularly in California, is currently having a very positive effect on a number of other factors, including negative equity, foreclosure activity and the overall financial health of local homeowners,” stated Zillow Chief Economist Dr. Stan Humphries.
Rapid appreciation, however, may lead to affordability issues in the future and potentially unhealthy conditions, he added.
“The housing market is complex, and while individual statistics can be useful in describing a single aspect of a given market, one number on its own can’t tell the full story,” Humphries said. “As markets continue to evolve and recover, the Market Health Index will reflect these changing trends, offering consumers a valuable tool on which to base their decisions.”
Other metros that made the top-10 list of healthiest housing markets included Boston (7.4); Pittsburgh (7.4); Portland (6.5); New York (6.0) and Sacramento (6.0).
Zillow’s Market Health Index is formed from 10 different metrics, accounting for changes in home values, length of time homes stay on the market, foreclosures, delinquencies and negative equity.
Written by Jason Oliva