Sellers across Washington and California have a lot to smile about, as cities in these two states ranked among the strongest housing markets in January, according to Pro Teck Valuation Services.
Bellingham, Wash., a city about 90 miles north of Seattle, had the country’s best-performing real estate market for single-family homes as West Coast cities continued to outperform the rest of the country, according to Pro Teck’s January Home Value Forecast. Six of January’s top 10 housing markets in the country were located in Washington and California.
Other top-performing metropolitan areas include Nashville, Tenn., and Cambridge, Mass.
The Home Value Forecast is created using a score for residential areas across the country based on a number of market indicators, such as the average selling price and the number of sales. These indicators are weighted to take their importance in determining the health of the real estate market in question in consideration.
As an experiment apart from its typical monthly rankings, Waltham, Mass.-based Pro Teck looked to see how its results changed when it took foreclosure sales out of the equation it uses to build its forecast. The number of foreclosure sales in an area is given the most weight in Pro Teck’s algorithm.
The experiment found that the ratio of foreclosures masks positive trends seen in Florida’s housing markets. While Florida cities have experienced price appreciation and drops in active listings, both representing signs of a healthy market, foreclosures dampen their outlook. Pro Teck said most cities in Florida had improved market conditions when the number of foreclosures was ignored.
With foreclosures included, four Florida cities rank among the 10 worst housing markets in the country. When the foreclosure ratio is removed, however, all of these Sunshine State cities except Tallahassee, plus five others, leave the bottom 10. The cities that replace them tend to be situated in rural areas with slower-moving real estate markets, the company said.
Similarly, five new cities, including Indianapolis and Richmond, Va., would join the top 10 if it weren’t for their foreclosure ratios.