Turnaround Towns for Q2 2013 Include Detroit
source: Real Estate News Aug 7, 2013 By:
Oakland, Orange County and the Santa Barbara-Santa Maria-Lompoc area in California are leading the nation in housing recovery, according to the realtor.com® Turnaround Towns report for the second quarter of 2013. And Detroit is an unexpected winner, showing up as No. 7 on the list.
The proprietary algorithm used for this report evaluates acceleration in key housing indicators observed on realtor.com® over the quarter. The indicators are inventory, median list price and days on market, as well as weighted search and listing activity on realtor.com®.
Nationally, for Q2 2013, the median age of inventory dropped 14.4 percent over the past year, with typical homes selling in 83 days between April and June of this year. Median list price rose 5.4 percent year-over-year, to $196,000, in the second quarter of 2013. The number of homes on the market dropped across the country by 10.3 percent year-over-year, with an average of 1.8 million homes on the market on any given day in the second quarter of 2013.
Most noteworthy is Detroit’s ranking at No. 7. Though the city recently filed bankruptcy, the market nonetheless posted strong improvement in the second quarter. Its median list prices on realtor.com® were 37.8 percent higher for the quarter than they were a year ago, while inventories were down 26.5 percent. The market’s median age of inventory is just 45 days, the second lowest in the nation.
“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. “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.”
Top 10 Turnaround Towns
1 – Oakland, CA: Oakland has been well on the path to recovery for more than a year. In the second quarter of 2013, listings in the Oakland market fell more than 34 percent from year-ago levels. Oakland led the nation in year-over-year list-price increases in the second quarter of 2013, and houses in Oakland are staying listed on realtor.com® for only 15 days, which is the youngest inventory in the nation. The median list house price in Oakland has risen from $339,000 a year ago to $479,000 in the second quarter of 2013.
2 – Orange County, CA: Orange County had record numbers of foreclosures just four years ago, but its home prices rose 29.4 percent above year-ago levels. In the second quarter of this year, Orange County had the fastest-declining inventory in the nation, with listings on realtor.com® down 36.6 percent. The median age of Orange County homes on realtor.com® in the second quarter of 2013 was 51 days, far below the national median of 83 days and 43.3 percent lower than a year ago.
3 – Santa Barbara-Santa Maria-Lompoc, CA: Santa Barbara’s strong prices catapulted it into third place on the list. In the second quarter of 2013, this market’s median price was up 34.3 percent over a year ago, to $685,000. Though Santa Barbara inventories were still extraordinarily low – down 27.8 percent from the second quarter of 2012 – they have started to recover. The average time that Santa Barbara listings spend on realtor.com® – 56 days – dropped 30.9 percent from the second quarter of 2012.
4 – San Jose, CA: Inventories in San Jose dropped 35.4 percent compared to the second quarter of 2012, the second-largest drop in the nation. Year-over-year San Jose prices were up exactly 25 percent in the second quarter of 2013, another sign that the market is returning to normal after a combination of historically low inventories and strong demand powered prices in San Jose and several other Northern California cities to huge increases.
5 – Seattle-Bellevue-Everett, WA: Seattle has worked its way into the top turnaround towns with consistently low inventories and a young age of listings. The median age of the market’s inventory on realtor.com® in the second quarter was only 23 days, making it the second-youngest in the nation. Homes listed for sale on realtor.com® are down 29.9 percent since the second quarter of 2012. Though Seattle’s market prices are not rising as quickly as those of other cities on this list, it is seeing resurgence in seller confidence.
6 – Los Angeles-Long Beach, CA: Los Angeles-Long Beach ranks fifth in the nation in price appreciation, with year-over-year prices up 30.3 percent as of the second quarter of 2013. Inventories were down 28.9 percent in the second quarter of 2013 from the same period in 2012. The median age of inventory, a measure of the balance between supply and demand, was 59 days compared to 83 days nationally.
7 – Detroit, MI: Although Detroit just filed for bankruptcy, the area’s housing market has been putting up numbers that bode well for the future of the city. Median list prices on realtor.com® are 37.8 percent higher in the second quarter of 2013 than the same period one year ago, while inventories are down 26.5 percent. The market’s median age of inventory is just 45 days, down 25 percent from the second quarter in 2012.
8 – Portland, OR-Vancouver, WA: Changes in the size of Portland-Vancouver’s inventory and a sharp decline in the time that homes are on the market are setting the stage for growth. Inventories are down 23.5 percent in the second quarter of 2013 from the same period in 2012, while median price is up 12 percent over the second quarter of 2012. The key to this market is its age of inventory, which has shrunk 45.8 percent in the past year. At 39 days, it is far below the national average of 83 days.
9 – San Diego, CA: For a large market, San Diego is putting up very strong numbers. Prices are up, inventories are down and homes are selling briskly. Prices are up 21.1 percent in the second quarter compared to the same period a year ago, and inventories are down 28.5 percent. Age of inventory in the San Diego market dropped 26.4 percent to 53 days.
10 – Reno, NV: Reno’s strong demand and shrinking inventory combined to create double-digit price appreciation. In the second quarter of 2013, list prices were up 26 percent over the same period last year, at the same time that its property count on realtor.com® fell 29.1 percent. Age of inventory dropped 32.3 percent.