Signs of the housing-market recovery are everywhere, from galloping mortgage rates to rising home prices and all those "under contract" signs popping up around the neighborhood.
Nationwide, homes typically sold in 83 days in the second quarter, 14 percent faster than a year earlier, according to Realtor.com. At the same time, the median list price rose 5.4 percent, to $196,000, and the number of homes on the market dropped by more than 10 percent.
Even some states hit hardest by the recession, including Michigan, California and Nevada, are starting to see their housing markets rev back up.
"Detroit has made remarkable progress in the last year, shrinking its inventory of unsold homes by more than 26 percent and becoming one of the most balanced markets in the nation," said Steve Berkowitz, CEO of Move, the parent of Realtor.com. "We'll be watching the inventory levels in the months ahead, but if this past quarter is any indication, Detroit won't be giving up without a fight."
Realtor.com is out with its list of the Top 10 Turnaround Towns for 2013. Several metrics are used to develop the list, including inventory, median list price, days on the market, and weighted search and listing activity on Realtor.com.
Do you think Detroit made the list? Did it top the list? Click ahead for the full list of the Top 10 Turnaround Towns for 2013.
By Cindy Perman
Posted 7 August 2013
Follow Cindy on Twitter @ponyblog.
Reno's strong demand and shrinking inventory created double-digit price appreciation. In the self-proclaimed "Biggest Little City in the World," famous for its casinos, the amount of time houses stay on the market has dropped more than 32 percent from last year, according to Realtor.com. Meanwhile, inventory shrank more than 29 percent, and the median list price jumped 26 percent.
It is definitely a "seller's market," Keller Williams realtor Guy Johnson wrote on the Reno Realty blog. What's more, he said, most of those sales were "equity" sales (seller owes less on the mortgage than what the home is worth), as opposed to foreclosure or short sale.
Last month, for example, 71 percent of sales were equity, with 21 percent short sales and 7 percent real estate owned (bank owned properties that didn't sell at foreclosure auction).
California has enjoyed its strongest year-over-year gains in housing prices in more than 30 years, and the San Diego market has seen such a strong comeback that KPBS public broadcasting recently ran a piece titled, "Is San Diego's Housing Market Headed for Another Bubble?"
Realtor.com says this large market shows very strong numbers: Inventory is down more than 28 percent, while the median amount of time homes spend on the market is down more than 26 percent, to 53 days. The median list price rose more than 21 percent.
A sure sign of a housing recovery in Southern California: Flipping is back! Flipping is when an investor buys a home at a decent price, makes some improvements and sells it for a profit within six months. Investors flipped a record 301 houses in San Diego in June, the Los Angeles Times reported. Across the region, total flips had topped pre-recession levels by spring.
"The City of Roses," so named for its many rose gardens, has seen the amount of time homes spend on the market drop by nearly 46 percent, to a median 83 days, which Realtor.com says is helping to set the stage for growth. The number of homes for sale fell by more than 23 percent, and the median list price rose 12 percent.
"Our team has been closing a record number of transactions in the last few months," Turner Team realtor Charles Turner wrote in a recent blog post. "These numbers exceed the month that the First Time Buyer Credit expired and any of the peak months of the 2005-2007 'crazy' market before the crash," he said.
Of course, it becomes a case of be careful what you wish for. The double-digit jump in the average sale price is "frightening," Turner writes. "Hopefully the market will settle down to an appreciation rate of around 5 percent. That should be sustainable."
Yep, Detroit made the list! The Motor City may have just filed for bankruptcy, but all three Detroit auto makers are posting double-digit sales increases, and the housing market is putting up numbers that Realtor.com says "bode well for the future of the city."
Median list prices surged nearly 38 percent, while inventories are down more than 26 percent, according to Realtor.com. The amount of time homes spent on the market dropped 25 percent, to a median 45 days, which is nearly half the national average of 83 days.
Bankruptcy may be a scary word that could make homebuyers nervous, but some economists say it's actually a good thing for housing. It can be viewed as the beginning of a solution to the city's problems and, in fact, boost confidence.
The "B" word, bubble, has also been uttered about the Los Angeles area, with home prices rising faster than incomes.
One open house this summer in Cheviot Hills, a West Los Angeles neighborhood, attracted 150 people and brought in 14 bids before selling for 7 percent above the listing price of $2.9 million.
The area ranks No. 5 in the nation in price appreciation, according to Realtor.com, with prices up more than 30 percent from last year. Inventories fell nearly 29 percent, and homes were on the market for a median of 59 days.
Investors were flipping for good deals, too: Investors in Los Angeles County flipped 419 homes in June, just 150 fewer than the peak, the Los Angeles Times reported.
Seattle cracked the top five because of its consistently low inventories and the short time that homes spend on the market.
The median time homes spend on the market is 23 days, the second-lowest level in the nation, according to Realtor.com, and nearly 56 percent less than a year ago.
The number of homes for sale has fallen nearly 30 percent, and the median list price is up more than 17 percent. That increase isn't as strong as in some other markets, but the area is seeing a resurgence of seller confidence, Realtor.com said.
The Seattle market is so hot that the Puget Sound Business Journal ran an article this summer, titled, "Seattle-area realtors 'desperate' for more houses as market sizzles." Homes in one area are getting as many as seven offers, and potential buyers are doing inspections before they even make an offer so completion of the sale isn't held up.
Such intense competition for homes makes it tough on buyers. Mike Skahen, founder of Lake & Co. Real Estate, told the Journal that he has never seen the in-city market "so stressful" for buyers.
This city's big number is inventories, down more than 35 percent from last year, the second-largest decline in the nation. Prices are up 25 percent, and the median time homes spend on the market is down 64 percent.
Homes are going for "hundreds of thousands of dollars over the asking price," the San Jose Mercury News reported. The market heated up so much that there have been signs of cooling this summer as cautious buyers put their plans on hold. What's more, real-estate agents are embracing the cooldown!
"It's a welcome break in the trend, even if it ultimately means prices start to cool off a bit, too," ZipRealty CEO and President Lanny Baker told the Mercury News.
Prices in this area, sometimes referred to as the "American Riviera" because of its Mediterranean-like climate, jumped more than 34 percent, to $685,000, according to Realtor.com. Inventories remain low, down nearly 28 percent from a year ago, while median time on the market fell 31 percent, to 56 days.
Multiple offers are the norm for many new listings, realtor Stan Abler wrote in a blog post. Distressed sales are down sharply, and many homes are selling for over the asking price. In May, for example, 34 percent of home sales and 38 percent of condo sales were over asking, he said.
In its midyear update, the Santa Barbara Association of Realtors summed it up this way, "It looks like Santa Barbara is the million-dollar city once again," as the median price of more than 100 homes sold in June was $1.05 million. (Condos, by contrast, had a median sale price of $530,750.)
Just four years ago, Orange County had a record number of foreclosures. Today, home prices are up more than 29 percent year over over, Realtor.com reported. The area has the country's fastest-declining inventory, down more than 36 percent; the median number of days that houses were on the market in the second quarter fell more than 43 percent, to 51 days.
Investors were flipping all over Southern California: There were 133 flips in Orange County in June, down 60 from the peak, the Los Angeles Times reported.
"Now I think there's a frenzy that's going on," Scott Mednick, president of the Orange County Investors Club, for real estate investors, told the paper.
And the No. 1 turnaround town is ... Oakland!
The third-largest city in the San Francisco Bay Area gets a lot of technology-industry demand, which has overflowed from super-pricey San Francisco. Once known as a violence-riddled city, Oakland was ranked in The New York Times as one of the top five places in the world to go in 2012.
Oakland led the nation in price increases in the second quarter: Median list prices jumped more than 41 percent, to $479,000, from $339,000 a year earlier, according to Realtor.com. The median time homes stayed on the market was just 15 days, the best in the nation. That number is half what it was a year earlier and significantly lower than the national average of 83 days. Inventory dropped more than 34 percent.
Local realtors report an average of 10 to 15 offers on reasonably priced homes and ones that routinely sell for 12 to 15 percent over asking price, the Oakland Local blog reported. In fact, one realtor was quoted as saying, "I haven't talked to anybody in over a year who's worried about their job or their husband's job or their partner's job."
The market is so hot, it begged the question in the headline: Is another bubble coming?
Click here to see what last year's top 10 turnaround towns were: