As the year comes to a close, Pro Teck Valuation Services' latest home value forecast of the top 10 best and 10 worst performing metros ended the year on the same note, fluctuating little over the year.
However, this could start to change next year.
"Our top ten have been fairly consistent, as limited supply and low interest rates continue to push these markets. This list will change if we see an increase in interest rates early in 2016," said Tom O'Grady, CEO of Pro Teck Valuation Services.
On Wednesday, the Federal Open Market Committee announced that it is raising the federal funds rate for the first time since June 2006.
The rankings are based on a number of leading real estate market indicators, including: Sales/listing activity and prices, months of remaining inventory, days on market, sold-to-list price ratio and foreclosure and REO activity.
Pro Teck measures Core Based Statistical Areas which consist of the county or counties with a substantial population, along with adjacent commuter communities. It refers collectively to metropolitan statistical areas and micropolitan statistical areas.
Here are the top and bottom 10:
This month's Top 10 CBSAs include:
- Bellingham, Washington
- Bend-Redmond, Oregon
- Boise City, Idaho
- Boulder, Colorado
- Eugene, Oregon
- Oak Harbor, Washington
- Portland-Vancouver-Hillsboro, Oregon-Washington
- Sacramento-Roseville-Arden-Arcade, California
- Seattle-Bellevue-Everett, WA Stockton-Lodi, California
- Stockton-Lodi, California
This month's Bottom 10 CBSAs include:
- Fort Lauderdale-Pompano Beach-Deerfield Beach, Florida
- Huntington-Ashland, West Virginia-Kentucky-Ohio
- Joplin, Missouri
- Lake County-Kenosha County, Illinois-Wisconsin
- Lake Havasu City-Kingman, Arizona
- McAllen-Edinburg-Mission, Texas
- Milwaukee-Waukesha-West Allis, Wisconsin
- Midland, Texas
- Atlantic City-Hammonton, New Jersey
- Jacksonville, North Carolina.
In this report, Pro Teck also examined how the top three CBSAs in current sales price, current months of remaining inventory and twelve month sales price appreciation are doing.
Current sale price
This year, the same three California metros: San Francisco, San Rafael and San Jose, topped the list.
"Last year we forecasted that San Francisco's home prices would start to stabilize – that did not happen as average sold price is now over $1.2 million," said Tom O'Grady, CEO of Pro Teck Valuation Services.
"One reason for this was that interest rates have stayed at historic lows, making homes more affordable at all price points. With interest rate increases anticipated in the near future, we will keep an eye on the impact on 2016 home prices," he added.
Current months of remaining inventory
"If an area has a high MRI (10 months), it means that the market is saturated — a buyer's market," said O'Grady. "If MRI is low (below 3 months) then it becomes a seller's market."
MRI equals the amount of households on the market divided by the number that sell per month.
All of the top three markets have around two months of inventory, creating a lot of competition for homes and many selling above asking price.
This year, two of the leaders in 2014, San Jose (2.03) and Santa Cruz (2.93), remained hot markets in 2015.
Twelve-month sales price appreciation
While the top three CBSAs all have more than 20% appreciation for the year, they were all were heavily impacted by the housing crisis.
"What these numbers reflect is that the market has responded to the bargains that are out there, and that the housing market has begun to reflect supply/demand fundamentals," said O'Grady. "Our top three are now seeing steady appreciation as they recover."
In its last report, Pro Teck spotlighted the inventory levels in the 29 hottest markets.