Just a few years ago, when foreclosures were coming fast and furious, some cities experienced more than their fair share of the pain. It stood to reason that the harder hit a city was, the less likely it was to make a hasty recovery. However, according to Realtor.com, the official site of the National Association of Realtors, some of the cities whose housing markets bore the brunt of the foreclosures are now leading the way toward recovery.
Using data from Realtor.com, CNBC.com ranks the cities with the most dramatically recovered housing sectors. The list weighs year-over-year data from the fourth quarter of 2011 and the fourth quarter of 2010, such as median price appreciation, median age of inventory, inventory reduction rates and unemployment rates, as measured by the Bureau of Labor Statistics in November 2011. Realtor.com also sought the perspective of real estate agents, who work on the front lines of the markets that are experiencing turnarounds. Their insights are included here. Click ahead to see which American cities made this year’s list of the top 10 turnaround towns.
By Daniel Bukszpan
Posted 09 February 2012
Year-over-year Median List Price Appreciation: 17.79%
Year-over-year Median Age of Inventory: -16.18%
Year-over-year Inventory: -29.25%
Unemployment: Rate (November 2011): 10.3%
Search/Listing Ratio Rank: 60
Punta Gorda, Fla., appeared on Realtor.com’s list of turnaround towns in the first and second quarters of 2011, but fell off in the third. However, it makes its triumphant return in the fourth quarter. Considering that since 2006 the area saw a 56.2 percent decline in home values, this turnaround is nothing short of remarkable.
According to Realtor.com, overall sales have increased 11 percent year-over-year, and Punta Gorda has seen its housing inventory undergo a year-over-year reduction of 29.25 percent. Sale prices have increased 11 percent year-over-year, but have still remained low enough to appeal to buyers looking for great deals.
Year-over-year Median List Price Appreciation: 9.09%
Year-over-year Median Age of Inventory: -28.89%
Year-over-year Inventory: -35.28%
Unemployment Rate (November): 11.0%
Search/Listing Ratio Rank: 4
Just a year ago, Florida's Lakeland-Winter Haven area had the dubious distinction of topping national lists of foreclosure filings. However, those filings are now on the decline, and in September 2011 the number of distressed homes sold dropped to 86 from 107 in the previous month, and 132 in the year before.
If any figure dampens the outlook for the area, it’s the unemployment rate. Although it dropped from 12 percent in the third quarter to 11 percent in the fourth, the area clearly has a long path to recovery.
Year-over-year Median List Price Appreciation: 7.84%
Year-over-year Median Age of Inventory: -35.71%
Year-over-year Inventory: -41.63%
Unemployment Rate (November): 9.4%
Search/Listing Ratio Rank: 8
Fort Lauderdale’s housing inventory is down 41.63 percent year-over-year, the sixth-best in the U.S. according to Realtor.com. Sale prices rose by 18 percent year-over-year, and transactions rose by 22 percent.
Like other parts of Florida, Fort Lauderdale is still plagued by high joblessness. Its November 2011 unemployment rate of 9.4 percent is still having a negative effect on the housing market, but list prices have increased 7.84 percent since the previous year, reversing a trend that saw prices plunge by 46 percent between 2006 and 2010.
According to real estate broker Juan Vazquez of the United Realty Group, this means it’s time to buy, and the clock is ticking. “We do know that historically, once you hear that things have turned around and are going up, be it stocks, commodities and yes even home prices, you’ve already missed the boat,” he says.
Year-over-year Median List Price Appreciation: 13.38%
Year-over-year Median Age of Inventory: -13.64%
Year-over-year Inventory: -35.94%
Unemployment Rate (November): 10.0%
Search/Listing Ratio Rank: 23
Making its first appearance on Realtor.com’s list of turnaround towns is Naples, Fla. List prices have increased by 13.38 percent, housing inventory has experienced a 35.94 percent reduction and houses are spending 13.64 percent less time on the market without a buyer.
Rowan Samuel of John R. Wood Realtors has seen the improvements firsthand. “Our last two listings went under contract in 30 days and both closed for 97 percent of asking price,” he says. ”The inventory in our area continues to decrease, and the presence of short sales and foreclosures has reduced dramatically. In some of the more popular areas, we have not seen a distressed sale enter the market in months."
Year-over-year Median List Price Appreciation: 13.77%
Year-over-year Median Age of Inventory: -23.42%
Year-over-year Inventory: -39.66%
Unemployment Rate (November): 8.5%
Search/Listing Ratio Rank: 127
Only two of the cities on Realtor.com’s list of turnaround towns are outside of Florida. One city is Boise, Idaho, which experienced a 40 percent decrease in inventory from the previous year, according to the website. As inventory shrinks, prices increase, and Boise has seen a 13.77 percent increase in median list prices as a result. Its unemployment rate as of November was 8.5 percent, according to the Bureau of Labor Statistics, which was lower than the national rate at the time.
Jacque Neef of Homeland Realty confirms that things are improving. “The Boise market seems to be picking up; in fact my fourth quarter, sales were nearly half of my total sales volume for 2011,” she says. “The buyers seem to have been holding off purchasing because the media keeps telling us that our real estate market has not hit the bottom. These buyers seem to be tired of waiting when our prices have remained steady and interest rates remain at all-time lows. It seems as if they finally feel now is the time to buy.”
Year-over-year Median List Price Appreciation: 10.78%
Year-over-year Median Age of Inventory: -26.57%
Year-over-year Inventory: -31.01%
Unemployment Rate (November): 10.1%
Search/Listing Ratio Rank: 31
The Sarasota-Bradenton area takes the number five spot on Realtor.com’s list. Median list prices have increased by 10.78 percent since last year, while inventory has dropped by 31.01 percent. According to Carol Marra of Keller Williams Realty, current trends are putting Sarasota-Bradenton within striking distance of becoming a seller’s market.
“We have less inventory available for sale and I do see prices inching up,” she says. “Another indicator of our market turnaround is that local home builders have less existing inventory and are generally standing firm on their prices.”
Year-over-year Median List Price Appreciation: 31.27%
Year-over-year Median Age of Inventory: -17.60%
Year-over-year Inventory: -35.31%
Unemployment Rate (November): 10.5%
Search/Listing Ratio Rank: 26
The Fort Myers-Cape Coral area has slipped one notch to fourth place on Realtor.com’s list of turnaround towns. It held the third-place slot last year, but sales have decreased 13 percent since then, hence the downgrade. Still, it’s bouncing back, with a 20 percent increase in median sale price over last year, better than any other market in Florida.
Denny Grimes, a real estate agent from Fort Myers, describes the housing market as split. “Right now what we are seeing is a market of the haves and have nots,” he says. “Inventory of homes priced under $250,000 is very low. If it were a gas gauge I would say it was blinking on empty. At the higher end of the market -- the ‘move-up’ market, priced over $500,000 -- we are not seeing as many buyers and inventory is still high.”
Year-over-year Median List Price Appreciation: 8.22%
Year-over-year Median Age of Inventory: -36.52%
Year-over-year Inventory: -44.02%
Unemployment Rate (November): 9.7%
Search/Listing Ratio Rank: 1
Orlando, Fla., has experienced a 36 percent drop in the median age of its housing inventory, down to an impressive 73 days, according to Realtor.com. The city has also experienced a decrease in the number of foreclosure filings over the previous year, with one in every 323 households posting a filing. This constitutes a drop of 24 percent from November 2010.
According to real estate agent David W. Welch, homes are going fast. “We actually have a shortage of homes -- less than six months of inventory -- on everything under $300,000,” he says. “Two of my buyers made offers last week. One made an offer on a $90,000 home as an investment. The other made an offer on a rather large $250,000 home as his primary residence. Both homes were short sales, and both homes had five other offers on them.”
Year-over-year Median List Price Appreciation: 15.38%
Year-over-year Median Age of Inventory: -27.47%
Year-over-year Inventory: -48.10%
Unemployment Rate (November): 7.7%
Search/Listing Ratio Rank: 7
The other area on this list that’s not in Florida is the Phoenix-Mesa area in Arizona. It used to reside at the number four spot, but jumped ahead two notches between the third and fourth quarters of 2011. This area experienced more than its fair share of foreclosures, and one in every 317 homes still goes into foreclosure. However, the foreclosed homes on the market are being sold at bargain prices, which has caused a 27.47 percent decrease in the median age of inventory.
The city’s unemployment rate in November was 7.7 percent, better than the national average, which can only help boost the local economy. Real estate broker Christy Walker has an optimistic forecast. “The Phoenix market has experienced a positive change in the past year and is poised to continue rebounding throughout 2012,” she says. “Employment is up, foreclosures have dropped significantly, investor sales are substantial and our inventory is hovering around a three-month supply with increasing demand.”
Year-over-year Median List Price Appreciation: 28.57%
Year-over-year Median Age of Inventory: -30.89%
Year-over-year Inventory: -51.44%
Unemployment Rate (November): 9.4%
Search/Listing Ratio Rank: 9
Of all the U.S. markets, Miami was among those that were hit hardest by foreclosures. Today, however, it’s bouncing back, and in a big way. According to Realtor.com, Miami is the leading turnaround town in the U.S. Sales of single-family homes increased by 51 percent in the past year, according to the Miami Association of Realtors, and the median age of the inventory has decreased by 30 percent.
"They say the first to hit bottom are the first to get up, and that's exactly what we have been seeing in Miami,” says Ines Hegedus-Garcia of Majestic Properties. “Although mainstream media seems to be a little behind with the good news, we have been seeing desirable areas in Miami already showing price increases, almost a nonexistent distressed inventory and even a seller's market in some instances."