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Clark County, Nev.

The Las Vegas area has worked through its REO inventory faster than most other markets, down 67% over the last 18 months. In the last two years, pre-foreclosure activity has fallen by 68%, further decreasing the supply of distressed properties. Supply will improve in this region throughout 2014 due to more listings and average new building activity. But DataQuick says these gains aren’t enough to bring sales volume increases above the study average of 12%. The upside is property appreciation, up 29% through the end of July, will probably continue to be higher than most markets.
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Cook County, Ill.

Home sales are up 20% in Chicago, primarily due to distressed properties being bought. But this is causing property values to only rise by 7% on a yearly basis through July, compared to the national average of 17% in this study. Only 0.24% of properties are currently being listed, as many potential sellers are still waiting out the distressed market. Meanwhile, the 2-year population growth in the Chicago region is only 0.7%, substantially down from the 2% national mark, and the unemployment rate was 10.2% as of July.The outlook for Chicago is that a high concentration of distressed sales will likely keep sales volume ahead of study averages, but result in only modest appreciation increases.
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Cuyahoga County, Ohio

A return to better times does appear in the offing as new pre-foreclosure activity has declined 16% during the past 12 months, which helps ease overall REO inventory that has increased in the last 18 months by 26%. New sale listings are 0.33%, which is below the national average of 0.46%, as potential sellers are letting the distressed market inventory clear in hopes of improved property appreciation conditions. Also, Cuyahoga County’s unemployment rate is positive, sitting at 7.5%, much closer to the 6.1% pre-crisis level. Overall, it’s likely that Cuyahoga County will continue to see below average property appreciation and only modest gains in sales volume in the coming year.
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Fairfax County, Va.

Fairfax County is probably the closest County in the study returning to normal housing market conditions. Property values have regained nearly all of their value from their pre-crisis peak, so modest 11% year-over-year appreciation gains in July were not surprising. Other than a potentially smaller supply of new homes, DataQuick says there are no extraordinary supply or demand trends that could lead to dramatic shifts in overall metrics. As such, modest appreciation and sales volume gains are expected for 2014.
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Maricopa County, Ariz.

The recovery in Maricopa County continued over the past 12 months with property values outpacing the national average at 25%. But the county’s year-over-year sales volume gain of 4% was the lowest of all markets in this analysis owing to a significant decline in the supply of distressed properties over the past 18 months by 46% coupled with strong demand driven by lower than average unemployment of 6.8% and strong population growth of 3.3%. Property appreciation will likely continue to return to more normal levels in Maricopa County in 2014. It appears the supply issue that kept sales volumes very low in 2013 will start to be addressed with an increasing number of new, non-distressed listings moving forward.
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King County, Wash.

Property values have regained nearly all of their losses and continue to grow, 16% year-over-year. However, REO inventory is up 10% over the past 12 months with half of that increase coming between April and July 2013. This is a result of a 20% YOY increase in pre-foreclosure activity. The intriguing driver in King County in 2014 will be supply. Compared to other Counties in this study, there will be more new properties available to meet strong demand generated by robust population growth and relatively low unemployment. However, the market is going to see an increase in distressed properties as well. Sales volumes will probably continue to outpace national averages, but property appreciation will likely slow given that more of these sales will be accounted for by distressed properties than in 2013.
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Los Angeles County, Calif.

Los Angeles recorded above average property appreciation gains during the 6 to 12 months before July 2013 and is moving closer to recovering lost property values than many other markets in the study. But any positive momentum has to be tempered as the rise in home prices in Los Angeles was clearly in response to a limited supply of properties for sale. As a result, overall sales volume gains (9%) were below most of the other counties. Even within this market, there are signs of an uneven recovery.
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Miami-Dade County, Fla.

Property appreciation levels have lagged from January to July 2013 up only 8% while the national average is 11%. This happened due to a 20% influx of REO inventory. Demand, and the resulting sales volume increase of 19%, has been as strong in Miami as nearly any other market, but again, a large portion of this activity was concentrated on distressed properties. High REO inventory has not stopped the largest increase in building permit activity between 2010 and 2013, up 154%. Population growth of 3.8% is amongst the largest in the country, but unemployment of 8.4% is dragging down demand. For 2014, it appears there will be ample supply to meet yearly demand which is good news. The bad news is that more of this supply will be distressed properties. As a result, property appreciation is expected to lag behind study averages.
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San Diego County, Calif.<TAB>

San Diego home sellers are listing their properties on the market, resulting in a positive impact on property appreciation as values are now at 82% of their pre-crisis levels. REO inventory is currently 79% off the September 2008 peak, the strongest of any county in the study, which has limited overall supply. A limited supply of properties for sale will continue to be a challenge in San Diego County during 2014, especially as new permit activity is only 20%. This will drive property appreciation although some gains will be limited by a lack of demand owing to the county’s high unemployment rate of 7.7% relative to historic low performance which was around 2%.
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Wayne County, Mich. <TAB>

Year-over-year sales volume increases were strong, 21%, in comparison to the other markets, but a large REO inventory is impacting what’s being sold leading to sub-par property appreciation gains over the past 12 months. Demand drivers in Wayne County are not strong, with population growth decreasing by 1.5%, the largest in the study, and unemployment at 11.8%. Distressed properties will likely continue to constitute much of the available supply in 2014, meaning sales volume should continue to be solid although negative demand drivers will limit these gains as they have in the past. Overall, appreciation levels will still lag behind study averages.
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