Seven markets have hit their peaks, according to new data from Clear Capital.
“Bubbles bursting in leading markets could leave bad aftertaste for this recovery,” Clear Capital says in a new report.
Those seven markets are Miami, Chicago; Boston; Bakersfield, Calif.; Minneapolis; Oxnard, Calif.; and Riverside, Calif.
“Each of these markets has hit peak levels, is stagnating and appears to have reached its price growth zenith,” Clear Capital says. “These markets have had two years of consecutive quarterly softening, meaning each subsequent quarter, over the two year period starting May 2013, has seen less growth than the previous quarter.”
Clear Capital ruled out seasonality in its analysis.
“At the surface, May data is serving up more of the same, which is an interesting indictment of the economic uncertainty facing the industry,” says Alex Villacorta, Ph.D., vice president of research and analytics at Clear Capital, in a statement. “Small increases or declines in quarterly gains reflect both the normalization off of the ‘correction-to-the-correction’ and the uncertainty of the health of the housing market.”
Through May 2015 the national housing market showed a distressed saturation of 17.8%. In May compared to the previous month, the national housing market showed gains of 0.6%.
“Though May’s top performing markets continue to see improvements, no one market is on pace to match the rates of growth observed over the last 12 months,” Clear Capital says. “In other words, something big needs to happen for the nation’s steadiest markets to best their current yearly rates of growth, something that has yet to be seen in force as we enter the height of the real estate season.”
Written by Cassandra Dowell