Top 5 Turnaround Towns: Home Prices Expected To Rise Here
When will home prices rise? That's the question of the week. Unfortunately, there are no easy answers. Many local markets around the country are taking baby steps towards recovery. But it doesn't look like prices are stabilizing in much of the country.
The National Association of Realtors reported that home sales rose in April, but pending sales have now falling 12 percent. Property prices are still falling in most of the country. Last week, the S&P Case/Schiller Index reported that home values are where they were back in 2002, although in places like Atlanta, it's looking like 1998 all over again. And in some places, we're back to home values last seen in the 1980s.
Weak employment numbers aren't exactly helping the housing market. Unemployment is now the single biggest factor for new foreclosures (we've burned through all those exotic mortgages, I'm afraid) and the number of employees filing for unemployment benefits was 422,000 last week, significantly above estimates. Nationally, unemployment is now 9.1 percent - hardly a real estate tonic. More like a real estate nightmare.
On the bright side, mortgage interest rates are now near historic lows again. With home values as low as they've been in about a decade (or two), affordability is high. The question is, where should you buy? Optimally, you'd want to buy in a place where home prices are expected to rise.
As we head deeper into the 2011 home buying season, real estate data from Realtor.com and other sources was used to identify five local U.S. real estate markets considered top candidates for a turnaround or where the recovery seems to be already underway. Median list price indicates what sellers are asking--but don't always get--for their properties.
Here's a list of five markets where things are heating up:
Fort Myers-Cape Coral, FL
When it comes to Florida (and Arizona and Nevada), there is really nowhere to go but up. List prices in Fort Meyers rose a huge 24.12 percent in the past 12 months in this West Coast resort market, and this resulted in the highest price increase nationwide.
Florida, as a whole, has been hard-hit in terms of real estate prices and still has a long road back from the nearly 60 percent drop in value it took over the past four years. Unemployment is still an issue here but from the search numbers provided by Realtor.com, someone is interested in great deals in a coastal resort area - maybe foreign buyers?
Los Angeles â€" Long Beach, CA
Because of its location in the middle of the sub-prime meltdown, Los Angeles real estate took an early hit leaving some properties in Los Angeles and Orange County down more than 37.8 percent from their peak in 2006. Though prices are only up 8 percent from March 2010, property in the area is moving quickly, well below the national mean, and Los Angeles was the third most-searched area in January, February and March.
Dallas, TX
The Dallas area must have had a fairy godmother during the crisis, as real estate lost only about 10 percent of its value. March prices rose very slightly in one month but are down only 1 percent from March, 2010. Houses aren't staying on the market long in Dallas, lingering only 100 days before selling. That's down 13.79 percent and way below the national average of 160 days on market. Home prices in Dallas could float up to their peak values very soon.
San Diego, CA
San Diego has been climbing out the subprime hole for about a year. The age of the listings in San Diego are about half as old as the national average and down about 16 percent from February. Though list prices are down about 1.42 percent from a year ago, they are headed in the right direction now. San Diego is poised to be a major comeback city in the near future.
Boston, MA
Though Boston (the market includes Worcester, Lawrence, and Brockton as well as southern New Hampshire) didn't take the huge price hit that Florida did, houses there lost about 17 percent of their median value since the peak in 2006. Now, Boston is ready to bounce back. This season, there are fewer houses on the market and demand is healthy. List prices are up 2.76 percent from February and was the 10th most-searched market in March, which is up three spots from February.
How is your neighborhood doing? Is it a contender for a Top Turnaround Town?
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Ilyce R. Glink is the author of several books, including 100 Questions Every First-Time Home Buyer Should Ask and Buy, Close, Move In!. She blogs about money and real estate at ThinkGlink.com and The Equifax Personal Finance Blog, and is Chief Content Strategist at RealtyJoin.com, a community for real estate investors.
