Spokane tops Realtor.com market watch list

Friday, March 2, 2018

(as reported on realtor.com)

Market Affordability and Availability Shift Demand Outward

March 1, 2018Affordability, Employment, Housing Demand, Housing Supply, Local Market Insights

As the national housing market continues 41 straight months of year over year declines in inventory and price increases have not slowed down, real estate market affordability and availability is playing a key role in buyer activity as  buyers are shifting their preferences from more expensive markets with less inventory to more affordable markets with more inventory available. In markets which have seen the greatest increase of inbound interest vs outbound interest over the past year, the need for affordability outstripped even the need to locate into a market that had higher employment prospects.

This analysis is based on all views to Realtor.com listings spanning the 100 largest metropolitan areas in the fourth quarter of 2017, compared to the fourth quarter of 2016, the first quarter in which we began to track cross-market demand activity in our Cross Market Demand Report.

The analysis primarily focuses on a metro’s inbound to outbound ratio, which is the ratio of views to that metro from other metros, compared to views from that metro flowing to other metros. Movements of this ratio are here interpreted using three factors: affordability, employment, and inventory availability.


Highest Inbound/Outbound Ratio

The markets with the highest overall inbound to outbound ratios are more affordable, have higher expected employment growth, and more available inventory than the markets they receive their inbound views from.


Median listing prices in the top 10 list in Table 1 averaged to $291,000, compared to $307,000 for the largest 100 markets overall. However, these markets are less affordable than the typical market in our 100 metro list. They received an average REALTORS® Affordability Distribution Score of 0.77 compared to 0.84 for the list overall. Nonetheless, they are more affordable than the markets they receive their inbound views from, which have an Affordability Score of 0.72.


Unemployment in the top 10 averaged to 3.9% compared to 4.1% in our list overall, with only Spokane, WA and Bakersfield, CA having higher unemployment than the 100 metro average. Expected employment growth from 2017 to 2018 averaged to 1.8% compared to 1.3% overall, and these markets had higher expected employment growth than the markets they received their inbound views from, which on average have an expected employment growth of 1.3%.

Inventory Availability

Approximately 1.3% of homes are available inventory in the top 10 list, compared to 0.9% overall. These markets also have more inventory than the markets they received their inbound views from, which on average have an availability rate of 1.0% of the housing stock.


Table 1: Metros with the Highest Inbound to Outbound Ratio

Rank Metro Q4 2017 Inbound/Outbound Ratio Y-Y Change in Inbound/Outbound Ratio Median Listing Price Median Income Affordability Score Affordability Score Difference from Viewing Markets Unemployment Unemployment Difference from Viewing Markets Expected Job Growth Expected Job Growth Difference from Viewing Markets Inventory Availability Inventory Availability Difference from Viewing Markets
1 Spokane-Spokane Valley, WA 2.82 -0.25 $264K $51K 0.78 0.21 5.3% 1.5% 2.7% 1.0% 0.7% 0.1%
2 Portland-South Portland, ME 2.57 0.02 $340K $68K 0.74 -0.03 2.7% -0.7% 0.0% -0.5% 0.9% 0.2%
3 Knoxville, TN 2.29 0.34 $247K $52K 0.86 0.05 2.9% -0.5% 0.9% -0.4% 1.0% -0.3%
4 Deltona-Daytona Beach-Ormond Beach, FL 2.13 -0.29 $270K $47K 0.64 -0.13 3.7% 0.0% 2.7% 1.0% 2.1% 1.0%
5 Boise City, ID 2.13 -0.06 $299K $56K 0.7 0.14 2.8% -1.2% 2.3% 0.9% 0.9% 0.2%
6 Jacksonville, FL 2.10 -0.12 $307K $59K 0.76 -0.02 3.4% -0.4% 2.2% 0.7% 1.4% 0.3%
7 Charleston-North Charleston, SC 2.09 -0.26 $364K $63K 0.71 -0.12 3.4% -0.6% 0.9% -0.3% 1.8% 0.7%
8 North Port-Sarasota-Bradenton, FL 2.05 -0.04 $350K $60K 0.68 -0.14 3.2% -0.8% 2.1% 0.8% 2.2% 1.1%
9 Bakersfield, CA 1.94 0.23 $239K $56K 0.94 0.46 8.6% 4.2% 1.1% 0.0% 0.9% 0.4%
10 Chattanooga, TN-GA 1.93 -0.33 $230K $53K 0.92 0.12 3.3% -0.3% 2.6% 1.4% 0.9% -0.3%


Notable Metro to Metro Demand Flows

Metros in Table 1 have notable flows which include demand from more expensive areas to less expensive areas in the same region or state, such as high demand from Seattle to Spokane; demand from Miami to Deltona-Daytona Beach and Jacksonville; Los Angeles, Riverside-San Bernardino and Sacramento demand for Bakersfield; and Atlanta and Nashville demand for Chattanooga. Other notable flows include Los Angeles, Sacramento, and San Francisco resident demand for properties within the emerging tech hub of Boise, ID. Figure 1 below displays the top viewing metros for each selected metro of interest.