Over the past year, Arizona has led the way in home price appreciation, showing 12 percent year-over-year gains. Other sensitive metropolitan statistical areas (MSAs) also posted price increases, with Barclays examining certain MSAs in the Sun Belt as bellwethers for recovery.
As migration patterns bring homebuyers back to Sun Belt MSAs (such as California’s Inland Empire, Las Vegas, Arizona’s Phoenix-Mesa-Glendale, and others), analysts are seeing an increase in housing demand, resulting in the absorption of oversupply and a turnaround in home prices.
In addition, Barclays’ data shows that Florida’s housing recovery (previously anticipation in 2013-2015) has arrived early as the state’s home price index soars 10.3 percent over expectations.
“While we had expected long-term outperformance in these markets, the exact timing of recovery was less clear. Now that these markets have exhibited strong [home price appreciation] for the past several quarters, the momentum term in our forecast has switched from negative to positive, and the near-term outlook for Sun Belt MSAs has become significantly more bullish,” said Barclays.