While national home prices turned positive for the first time in August, according to Case-Shiller, housing is a local story and many markets continue to perform worse than others.A housing recovery depends on a number of factors like job creation, foreclosure inventory, home prices, and so on.
To address this CoreLogic has introduced the Real Estate Strength Index (RESi) which consists of three sub-indices: the Economic Health Index, the Real Estate Health Index, and the Mortgage Finance Risk Index.
In looking at state rankings of the RESi CoreLogic found a clear pattern of improvement in oil rich states. And North Dakota emerged as the strongest state with a reading of 71, followed by South Dakota with a reading of 67.
Our Robert Johnson has previously reported on the energy boom in North Dakota. Developments in drilling and fracking that allowed the energy industry to tap areas previously considered too uneconomical to develop, like North Dakota’s Bakken Shale Oil Field, have helped revive the local economy. From the report:
“The current RESi value in North Dakota is a record high for that state. This is mainly driven by record levels of state GDP growth and employment levels. It should be noted that the strength is not only at the state level, but also at the CBSA level with all three North Dakota CBSAs in the top 10 strongest markets list.
While most of the job growth is coming from the mining and logging sector, there is also remarkable growth in construction, transportation, professional services and similar jobs that are creating the new infrastructure needed to support this boom.”
And neighbouring states not experiencing the American energy boom are also benefiting from “spillover effects”.
The report also found that Boise, Idaho was the most improved housing market at the city-level with a reading of 49, it’s highest level since 2008. And it noted that the most improved markets were in West of the country since they experienced their peak-to-bottom cycle earlier than eastern states.
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