Top Turnaround Town

As the real estate market begins to shift, some towns have a stronger impact than others.

REALTOR.com recently posted an article that listed the top 10 rebounding cities;

1. Detroit — Once the poster child for America’s ailing auto industry, Detroit has turned around its housing markets. Instead of sinking when the city of Detroit had just filed for bankruptcy, its housing markets took on a quiet resurgence. In the second quarter of this year it ranked seventh in the report, and this rapid jump to number one speaks volumes about its pace of acceleration.

With the end of the buying season, prices in Detroit slowed in the third quarter, falling 4.8 percent from the previous quarter but 44.3 percent above the third quarter of 2012. Equally important is Detroit’s success at trimming its for-sale inventory and the age of its inventory, down 24.5 percent and 33.9 percent respectively, year over year.

2. Santa Barbara-Santa Maria-Lompoc, Calif. — Despite some tough competition by other hot markets, Santa Barbara moved up to second place due to the young age of its inventory and the noticeable decline in its inventory counts. This market is the only one in the top 10 list that appeared in the Turnaround Town Reports for the previous quarter, as well as the same period last year. This appearance, at number two, is its highest ranking to date and most likely due to its strong performance in categories such as median age of inventory improvement, as well as median list price improvement. It also is noteworthy that Santa Barbara is now the only remaining California market on this list, compared to reports from last quarter and the year-ago quarter, which were populated by six and seven California markets, respectively.

3. Reno, Nev. — With declining inventory and a drop in sales, this market is now moving into a far healthier balance than it experienced at this time last year. Achieving both this balance and healthy growth is a remarkable achievement for a market that lost significant amount of its value in years past. Through the third quarter of 2013, Reno has continued to reduce inventory at a rate of 19.8 percent and prices are up 28.2 percent compared to the third quarter of 2012.

4. Fort Lauderdale, Fla. — Still down 13.8 percent in the third quarter compared to year-ago levels, Fort Lauderdale’s inventory shortfall lit a fire this year under once-lagging prices. As inventories remained flat in recent months, prices in Fort Lauderdale rose in the third quarter. The region is entering a more buyer-leaning marketplace, with reports of sellers in Fort Lauderdale offering incentives to purchase, such as seller contributions to buyers’ closing costs and allowances for upgrades and renovations.

5. Ann Arbor, Mich. — Known primarily as the home of the University of Michigan, this smaller market just missed the top 10 ranking last quarter. Ann Arbor scored in the top 20th percentile among 146 markets in three of the most critical areas: size of inventory, price gains and age of inventory. Together, these metrics almost entirely define a market’s turnaround potential. While an improving economy is part of the reason, a shrinking inventory of homes has put upward pressure on price.

6. Dallas — Another newcomer to the top 10 list, Dallas is one of those markets that did not rise much during the housing boom and did not fall very far either. Its path to recovery has not been very steep at all, and as a result Dallas has rebounded more easily than some markets.

Inventories rose in the third quarter by 3.1 percent compared to the previous quarter, and down 15.72 percent year-over-year, as prices have risen, 10.6 percent over the third quarter of 2012. The seasonal inventory rise as the buying season ends could indeed have a dampening effect on prices.

7. West Palm Beach-Boca Raton, Fla. — Even though they are two of the wealthiest resort areas in the country, West Palm Beach and Boca Raton have had their share of challenges during the housing crash, not to mention Florida’s struggles with foreclosures. However, the West Palm-Boca market has taken the critical first step toward recovery.

While year-on-year inventory fell 20.7 percent in the third quarter, inventory counts fell 13.3 percent from the previous quarter, a sign that sellers are responding to higher prices and soon inventories will register positive gains. More houses lagging on the market in the slower fall and winter seasons could bring prices quickly under control and help the area find its equilibrium on pace with the rest of the country.

8. Boston-Worcester-Lawrence-Lowell-Brockton, Mass.-N.H. — The greater Boston marketplace is a mainstay of the nation’s healthiest real estate economies. Like Dallas and Ann Arbor, it was less seriously hampered by the housing crash of recent years. With the median list price at $344,900 in the third quarter, Boston is also one of the wealthier markets in the nation. However, like many markets that suffered greatly at the hands of foreclosures, Boston cut its inventory deeply in recent years, earning fourth place in terms of inventory reduction during the third quarter of 2013.

Affordability was a serious issue in many Boston-area communities before the housing crash and now tight inventories have helped push median sales prices up 9.5 percent year-over-year in the third quarter.

9. Boulder-Longmont, Colo. — Tight inventory is also Boulder’s secret to landing on this quarter’s list. It trimmed its inventory of homes for sale by 18.1 percent compared to the third quarter of last year and ranked seventh in the nation for declining age of inventory.

Boulder’s already-thin housing supply was stretched further when heavy rains fell on the eastern slope of the Rockies in September, causing massive flooding in Boulder and El Paso counties. However, Boulder’s relative health is worth remembering, and its likely quick return to its equalized buyer-seller home-buying marketplace is anticipated for later this year.

10. Las Vegas, Nev.-Arizona — Las Vegas was often cited as ground zero for the housing boom and bust. Despite progress over the past several years, nearly half of Las Vegas homeowners are said to still be underwater on their mortgages.

http://www.realtor.com/news/housing-markets-rebound/