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Where Home Prices Are Accelerating

Miami, Austin-Round Rock, and Cape Coral-Fort Myers remain the most overvalued metro areas in the nation, according to CoreLogic's HPI Forecast Validation Report.

The report noted that Bridgeport-Stamford-Norwalk metro continued to be the most undervalued market with a population size of over 700,000 with Hartford-West Hartford-East Hartford closely following.

The report compares the 12 months CoreLogic Home Price Index (HPI) forecast to the actual CoreLogic HPI data and compares the changes in national and key core-based statistical areas (CBSA)-level forecasts. The current report notes data changes from November 2017 to November 2018.

However, the report noted that some major metros were experiencing a large absolute price change over the last 12 months and that CoreLogic was monitoring these areas. "Many of these major metros have had complex economic, market demand and supply factors over the last year," the report said.

According to the report, the national prediction of a 4.7 percent increase was within 0.1 percent of the 4.8 percent increase of the HPI during the period under review. While the most accurate CBSA-level forecast was for the Cambridge-Newton-Framingham, Massachusetts region which came on target of the actual HPI increase of 5.5 percent. The widest CBSA gap was for San Diego, California, a market that was over-estimated by 6.4 percent compared to the actual increase.

This gap, CoreLogic said was because of a downturn of overall demand, combined with concern over long-term affordability.

Apart from San Diego, the report said that Philadelphia, Pennsylvania; Atlanta, Georgia; and Fort Worth, Texas were among the three other areas that were at the high end of the forecasting gap. While the Philadelphia market was slow to recover after the housing crisis, the market saw home price appreciation exceeding 5 percent for the first time since 2006, last spring.

Atlanta, on the other hand, had exhibited a very strong, higher-than-expected year-over-year increase due to the limited inventory of homes. This in a market where construction has traditionally kept up with the demand for housing.

The Dallas-Fort Worth economy grew at twice the national rate with 3.2 percent versus 1.6 percent annual job gains in August 2018. The report noted that although home construction in this CBSA had returned to pre-bubble rates, "housing supply may not be keeping up with population growth."

Download the full report here.

About Author: Radhika Ojha

Radhika Ojha is a freelance writer and editor. A former Online Editor for MReport, she is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her master’s degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha also worked as Principal Correspondent at HT Media Ltd and at Honeywell as an executive in corporate communications. She and her husband currently reside in Houston, Texas.
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