Home >> Daily Dose >> Home Prices Surge in Energy-Producing States
Print This Post Print This Post

Home Prices Surge in Energy-Producing States

Each edition of Arch MI’s Housing and Market Review features proprietary MSA-level data and State-Level Risk Indexes estimating the probability of house prices being lower in a given Metropolitan Statistical Area (MSA) or state within two years.

According to Arch MI’s market research, no housing bubble is currently forming in the U.S. The Arch MI Risk Index suggests the average of probable home price declines in the 401 largest cities remain low at 4 percent. “Housing markets across the nation remain healthy and are projected to stay that way through 2018 at least” the report reads.

Risk remained concentrated in regions with high amounts of energy-extraction, including North Dakota and Oklahoma, which both saw improvements. Arch MI attributes this to a gradual recovery in energy prices.

Alaska experienced a worsening in risk due to weakened employment in the energy and government sectors and as a result, has the highest likelihood of house price declines at 39 percent. North Dakota and Wyoming follow at 33 percent and 31 percent risk respectively. Also worth mentioning is West Virginia, landing a score of 26 percent risk, and -1 percent decreased risk compared to last quarter..

In the top 50 metros, the highest risk scores occurred in Fort-Lauderdale-Pompano Beach-Deerfield Beach, Florida and Nashville-Davidson-Murfreesboro-Franklin, Tennessee, both landing at 35 percent. Arch MI attributes this to home prices growing faster than income.

Home prices are increasing in every state since the recovery, but it has been uneven; 14 states are still below their peaks prior to recovery. Of the 401 MSAs studied by Arch MI, 46 percent are below their nominal peak. Ten percent of metros are seeing prices 20 percent higher than their prior peak and the majority of job growth is occurring in the largest and most globally integrated cities.

Regarding specific regions, the Northeast, but not including Boston, has had slow employment growth as it correlates with low population growth, therefore a limited supply of new workers. California remains a leader in economic gains, but growth among high-wage industries is slowing and tech-startup valuations appear to be stretched. Florida is still the best economic performer in the southern region due to residential and public construction, as well as tourism, which brought in 113 million visitors and $109 billion last year, according to Arch MI.

View the full report with accompanying graphs here.

About Author: Dean Terrell

After earning his B.A. in Writing Arts at Rowan University located in South Jersey, Terrell moved to Texas to pursue a career in publishing and editorials.
x

Check Also

Survey: Homeownership Remains Elusive for Baby Boomer Renters

A recent look into housing affordability by NeighborWorks America has found that three in five long-term baby boomer renters feel homeownership remains unattainable.