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CoreLogic Predicts more Housing Affordability Issues in 2017

house-affordability

The October 4, 2016 report put out by CoreLogic shows that home prices rise 6.2 percent annually through August. This leading company on global property information has issued the report that shows the increase of month over month and in the year over year calculation. The Housing Price Index (HPI) has proven itself to be useful in making more long range forecasts about the direction that the housing market will take. If you’re not totally familiar with how these processes work, here is an explanation of how they arrive at their conclusions and what the current and past data shows with regard to the future of housing costs in the the nation.

What kind of data is gathered?

The average cost of homes across the nation is collected in a database with notations of average home prices in particular areas. The information is analyzed to asses all trends which includes how much people are paying for homes in specific areas, what types of homes are going for what prices, whether home sales are going up or if there is a slump in the market with fewer home sales and so forth. All pertinent information related to the housing market is collected for inclusion.

Types of transactions

In addition, the distressed home market is also included in the overall picture. The methodology of CoreLogic in producing the HPI uses public records, servicing and real estate databases which are fairly inclusive and give a good representation of the current market conditions in terms of types of housing for sale including foreclosures, real estate agency offerings and homes for sale by banks or private owners. Repeat sales transactions which include property flipping are also a part of the analysis because they do have an effect on the overall market value of properties and can result in a home selling for a lesser value and then increasing sharply after improvements have been made for a resale.

The CoreLogic HPI reveals the tiers or multiple market segments which are based on the type of property, the selling price, how long there is between sales, the type of loans that are being secured (conforming or non conforming) in a broad coverage that includes the zip codes of the properties sold for higher accuracy in pinpointing housing market trends in specific regions of the country. The all inclusive database is analyzed in a variety of ways to arrive at the bottom line averages for the nation using all of the available information.

The data is useful for generating monthly reports to show any housing market changes on a month to month basis, whether there is an increase or decrease in the average price ranges. The total of the 12 month period is used for generating annual reports that clearly outline detailed housing market trends with respect to overall cost adjustments and specialty areas such as distressed housing markets, the number of foreclosures and repeat sales of individual properties.

Advanced analytics

The use of powerful analytic tools allows for forecasting housing market conditions fairly easily within a few years’ time. The forecasting uses a model that combines the equilibrium home price in conjunction with disposable income per capita including any forecasted fluctuations in the movement of the market, including changes in unemployment rates and mean reversion to come up with a thirty year forecast. Basically, this shows how median income levels of the population will affect the price of housing with some complex, yet understandable operations when properly explained. Comprehensive Capital Analysis and Review explained are the forecasts for the cost of homes within the next five years under scenarios that include adverse or extremely adverse economical situations and the accuracy of these calculations has been show to have a ninety five percent accuracy rate statistically. So there’s a high level of confidence in the forecasts.

Housing availability and its effect upon the market

A lack of available housing can also be a factor that helps to increase the overall cost in a specific area. Prices may become inflated in particular regions for this region or for others, including high scale housing that is set at higher prices because of their location in areas with better schools, lower crime rates and a more affluent local economy. When there are fewer quality housing options available, prices may become inflated and these are some of the factors that are taken under consideration when determining the real trends in a specific area. Multiple inclusions for a final result

It takes a lot of research and gathering of the right kinds of data to arrive at an overall conclusion of the status of the current housing market and for forecasting where it is likely to go next. The team at CoreLogic makes us of all available state of the art analytical tools and instruments to come up with the most accurate calculations of current home sales and overall market health. The information gathered is used to generate the reports that are helpful for private homeowners through investors who may be deciding whether or not to start a new home development project in a particular area.

Final thoughts

Understanding how the housing market forecasts are determined can seem a bit daunting at first glance, but once the finer details are explained, the process isn’t really that complicated. Current market health and forecasts for upcoming trends are useful in planning for first time home buyers as well as for investors who are planning to open up new housing opportunities in particular neighborhoods with housing developments that are aimed at providing the type of housing that is in demand in the current area.

This means that they will build single family homes that are in line with the affordability in the area based on the median income levels per capita. These innovations in home price gauging can make a tremendous difference in the success of any new home development ventures and are becoming more and more the reports which are heavily relied upon as new ventures exit the planning stages and become realities. The current forecast for 2017 shows that we can expect a 5.3 percent increase in the cost of housing nationwide.

 

Written by Housely

I craft the best articles on home renovation, real estate sales, and home decorating ideas found on the Internet.

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