As we continue to see signs of a broad real estate market recovery, it's important to remember that the recovery still varies wildly from market to market. Anyone still struggling to sell their homes, or with underwater mortgages are well aware that things aren't better everywhere. But some of the hardest hit areas are seeing the fastest turnarounds. Realtor.com has put together a list of the top 10 turnaround towns in the U.S. The list, which shows the metropolitan areas with the fastest recovering housing markets, is ranked by comparing the year-over-year change in median prices, and the changes in the median age and size of the inventory.
Top 10 Turnaround Towns: 2nd Quarter of 2012
Top 10 Turnaround Towns of 2012's Second Quarter
Santa Barbara-Santa Maria-Lompoc, Calif., ranks No. 10 on the list with a -31.10 percent decrease in year-over-year quarterly for-sale inventory and an increase of median list prices of 16.93 percent compared to the same time last year. Santa Barbara’s housing market moved 21.43 percent faster in the second quarter of 2012 than the same quarter last year. Santa Barbara County today generates one foreclosure filing for every 330 homes, but shows positive signs in new-home sales for April 2012 with both increases year-over-year and compared to the previous month. Santa Barbara was a highlighted market in the May 2012 Realtor.com monthly market report.
Fresno, Calif., has catapulted up the turnaround list to No. 9 from No. 57 in 2012's first quarter, due to the nearly 50 percent year-over-year quarterly reduction of inventory. Its age of inventory was 37 days in the second quarter of 2012, which placed it in the top 10 fastest moving markets in the country. Fresno still suffers from very high negative equity at 46.3 percent , compared to 27.3 percent nationwide. Fresno County’s foreclosure rate — at one in every 145 homes — and its 15.3 percent unemployment rate may make it especially challenging to generate the demand that its housing market will need to continue to improve at the current rate.
San Francisco, Calif., housing costs have been one of the most expensive in the nation for years, and its median list price of $699,000 for the second quarter makes it one of the most expensive on the list. Yet, San Francisco has managed to move up to No. 8, breaking into the top 10 list of turnaround towns for the first time. Its second quarter 2012 inventory is -38.67 percent lower than it was a year ago and prices are up 11.13 percent on a year-over-year basis. Its 8.5 percent unemployment rate is higher than the national average. Key to the market’s improvements is fewer foreclosures and an increased number of high-end sales, as well as improved mortgage availability and ultra-low interest rates.
Bakersfield, Calif., saw median list prices appreciate 7.62 percent in the second quarter of 2012 on a quarter-over-quarter basis. While Kern County today generates one foreclosure filing for every 197 homes , the -49.30 percent decrease in for-sale inventory compared to the same quarter last year earned the central California town the No. 7 spot on the list. Bakersfield’s 35-day median age of inventory, 39.66 percent faster in the second quarter of 2012 than the same quarter last year, positions this agricultural capital as the fifth fastest-moving market. New-home closings in Bakersfield in April 2012 were up 66.1 percent from a year ago.
Seattle-Bellevue-Everett, Wash., moves up from No. 25 to No. 6 in ranking this quarter because of the combined decrease of inventory, increase in median list prices and an overall fast-paced market. In the second quarter of 2012, Seattle had the fifth largest decrease in total inventory at -42.90 percent compared to the same quarter last year. With median list price increasing by 10.85 percent from Q2 2011, Seattle is one of the top markets for rising prices. In the first quarter of 2012, the Pacific Northwest city’s housing market moved 42.86 percent faster than it did in the same quarter last year, making it the third fastest-moving market in the second quarter. Sold prices are also healthy. The median sales price of single-family homes increased more than 10 percent in King County, which hasn’t happened since the peak of the market in July 2007. Unemployment in Seattle, at 7.8 percent, is lower than the national rate and the Seattle-area economy was rated third in the U.S. in a Policom Corp. study measuring 23 different economic factors during 20 years.
In 2012's second quarter, San Jose, Calif., makes its first appearance in the top five on the Realtor.com Top Turnaround Town Report, fueled by higher sales and decreasing inventory. The median sale price of Silicon Valley homes neared a four-year high in June 2012, also the 12th consecutive month with year-over-year increases in home sales. Though unemployment, at 8.8 percent, in this tech mecca is higher than the national rate at 8.3 percent, San Jose was named a top 10 city where paychecks stretch the furthest. According to Forbes, the high cost of living in San Jose is covered because the area had the highest average annual wage in the nation last year ($92,556). One of the sharpest inventory level decreases occurred in San Jose in the second quarter of 2012; totals were down -40.83% compared to the same period in 2011, while median list prices increased 12.03 percent over the same quarter last year. Homes moved 28.57 percent faster in the last quarter compared to the same period in 2011.
Boise City, Idaho, continues to show signs of solid recovery. Median list prices in the second quarter of 2012 were 19.58 percent higher than the same quarter last year, while inventory decreased -29.59 percent compared to the same quarter in 2011. Boise City also has one of the fastest moving housing markets in the country, with homes moving 32.47 percent faster in 2012's second quarter compared to the same time last year. New-home sales increased 52 percent in Ada County in June 2012, while existing home sales increased 2 percent. Boise City’s 7.3 percent unemployment rate is down significantly from last year and beats the national rate (8.3 percent). Plus, foreclosure rates remain steady, with 1 in every 511 homes going into foreclosure in Ada County, compared to 1 in every 519 at the end of the first quarter. Boise was recently named the second best city for raising a family.
Miami comes in No. 3 on the list this quarter. This market’s turnaround can be attributed to its decrease in inventory, an increase in list prices and shortened time on market. For-sale inventory decreased by -33.15 percent compared to the same quarter last year, and the market is moving 49.62 percent faster. Additionally, median list prices increased by 19.41 percent from the second quarter of 2011 to the same period in 2012. According to the Miami Realtors group, all-cash sales are a norm in Miami, accounting for 65 percent of all sales that closed in June 2012. Distressed properties are in high demand, totaling 44 percent of closed sales in June. Unemployment in Miami is at 9.2 percent, slightly higher than the state average of 9 percent.
Oakland, Calif., jumped four positions this quarter from No. 6 to No. 2, partially due to its unemployment rate which is at 8.5 percent, far below California’s 10.7 percent, and improving year-over-year. In the second quarter of 2012, median list prices in Oakland are up 10.79 percent compared to the same time last year, and inventory is moving 58.33 percent faster than in the second quarter of 2011. Oakland also reduced its inventory by just over half (-56.61 percent). The foreclosure rate in Contra Costa County is 1 in every 242 units while Alameda County is 1 in every 402, both significantly greater than the national rate of 1 in every 666 housing units.
Phoenix-Mesa, Ariz., is No. 1 on the Realtor.com Turnaround Town list for the second quarter in a row. Median list prices are up 29.73 percent compared to the same time last year. The area experienced the largest increase in median list prices of all of the 146 MSAs monitored by Realtor.com. Unemployment in Phoenix was 7.5 percent in June 2012, which has had a significant impact on improving the local economy and growing demand for housing, evident by the -37.84 percent year-over-year quarterly decline in the median age of inventory. While Realtor.com market data shows the Phoenix housing market is strengthening, Maricopa County still generates one foreclosure filing for every 284 homes. Underwater mortgages are decreasing in the Phoenix-Mesa-Glendale area; at the end of the first quarter of 2012, 46.2 percent of all residential mortgages were underwater, compared to 54.5 percent in the fourth quarter of 2011.