Wondering where the next housing boom is going to be? It doesn’t take a crystal ball to tell you where home sales are going to be increasing in the months ahead. The trends and conditions that forecast a rise in purchasing activity in the housing market can be identified, tracked, and analyzed. Data related to housing inventory, job availability, purchase loan applications, and other real estate activity can be collated into a city-specific pre-mover index, predicting where big upswings in home sales are about to take place.
The pre-mover indices recently released for the third quarter of 2017 by ATTOM Data Solutions, a company based in Irvine, California that curates the largest database of multi-sourced real estate property data in the United States, has identified which cities are expected to show the strongest growth in home sales in the next thirty to ninety days.
How is a pre-mover index calculated?
Each city’s index is based on the number of single-family homes and condominiums flagged with pre-mover indicators, compared against the national average. An index above 100 is considered above average, and of the 123 markets analyzed in the latest report, all of the top ten cities had index numbers above 175, with the number one market having an index more than triple the national average. According to historical data, nearly 60 percent of homes with pre-mover flags sell within 30 days of their estimated loan settlement date, with over 75 percent selling within 90 days.
Potential for growth in housing inventory as a major common factor for many of these cities. In a press release, Daren Blomquist, senior vice president at ATTOM Data Solutions, was quoted as saying: “Even in more mainstream markets, the counties with the highest pre-mover indices tend to be in outlying areas where more inventory is available or can be built.”
A high pre-mover index also correlated with lower unemployment rates and and slightly weaker wage growth in the Q3 report. Counties with a pre-mover index above the national average had an unemployment rate of 3.8 percent, compared to an average rate of 4.2 percent in the rest of the counties surveyed. However, weekly wage growth was 6.4 percent since last year in those same counties with above average pre-mover indices, while the average growth rate in the other counties was 6.5 percent.
Sales are expected to go up in these 10 cities
The following ten cities had the highest pre-mover indices for their respective metropolitan areas, suggesting that sales can be anticipated to increase over the next thirty to ninety days:
1. Colorado Springs, Colorado (pre-mover index: 305, median home price: $265,201)
2. Manchester, New Hampshire (pre-mover index: 243, median home price: $189,729)
3. Chicago, Illinois (pre-mover index: 222, median home price: $275,012)
4. Washington, D.C. (pre-mover index: 204, median home price: $432,656)
5. Nashville, Tennessee (pre-mover index: 196, median home price: $275,175)
6. Reno, Nevada (pre-mover index: 189, median home price: $364,031)
7. Tampa, Florida (pre-mover index: 188, median home price: $225,336)
8. Las Vegas, Nevada (pre-mover index: 180, median home price: $286,556)
9. Jacksonville, Florida (pre-mover index: 179, median home price: $227,340)
10. Kingsport, Tennessee (pre-mover index: 178, median home price: $141,114)
The cities with the lowest pre-mover index were: Rochester, New York (35), followed by Akron, Ohio (47); Myrtle Beach, South Carolina (47); Providence, Rhode Island (52); and Cleveland, Ohio (52).