The housing sector, and more specifically the recovery, has been subjected to a myriad of conditions that continue to alter its current trajectory. The recent government shutdown, in association with increasing mortgage rates, has already seen a lull in the progress we were experiencing a few months ago. However, several cities continue to thrive, even in the face of adversity. Realtor.com, in association with Move Inc., has identified the top 5 markets that led the nation in recovery for the third quarter of 2013.
In determining the candidates eligible for the Turnaround Towns Report, Realtor.com used an algorithm that evaluates the acceleration of key housing indicators. Subsequently, in the third quarter, analysts evaluated the following to determine the markets that are currently leading the nation in recovery:
- Median list price
- Days on the market
- Search activity on Realtor.com
- Listing activity on Realtor.com
Data is drawn from real-time listing counts through direct relationships with more than 800 multiple listing services (MLSs) around the country, representing 98 percent of all for-sale properties in the United States.
The following is a list of the top 5 markets that led the nation in recovery in the third quarter:
1.) Detroit, MI
While once considered to be the epitome of the housing sector decline, Detroit has seen itself become the beneficiary of an improving market. Shortly after the city filed for bankruptcy, its housing market demonstrated an increased propensity progression. This is due largely, in part, to increased investor activity. In fact, the rate in which Detroit’s market is accelerating has placed it on top of this list.
As the year draws to an end, appreciation rates have begun to slow, falling 4.8 percent from the previous quarter but 44.3 percent above the third quarter of last year. Perhaps even more importantly, however, is Detroit’s success at trimming its for-sale inventory and the age of its inventory. This conditions were once crippling any attempt at recovery.
2.) Santa Barbara-Santa Maria-Lompoc, CA
Despite the progression of similar markets on the West Coast, Santa Barbara is currently ranked second on the list of markets helping the recovery. This is directly attributed to the young age of its inventory and the noticeable decline in its inventory counts. The high ranking is most likely due to its strong performance in categories such as median age of inventory improvement, as well as median list price improvement.
Of particular interest, however, is a distinct lack of additional California markets. The Turnaround Towns Report for the second quarter identified six California markets in the top ten. This is an encouraging sign, as other markets appear to be catching up.
3.) Reno, NV
Reno has experienced a significant drop in both inventory and sales, making it a more balanced market than this time last year. This balance, in association with steady growth, is a dramatic improvement from the years following the recession. 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. Expect this trend to continue for the foreseeable future.
4.) Fort Lauderdale, FL
With inventory rates remaining flat over the third quarter, prices in Fort Lauderdale have proceeded to rise. As a result, the Florida market is entering a buyer friendly period, with reports of sellers in Fort Lauderdale offering incentives to purchase. Sellers are offering unique opportunities that include the overage of closing costs and allowances for upgraded amenities.
5.) Ann Arbor, MI
After having just missed this list in the last quarter, Ann Arbor sits proudly at number five. This city now ranks in the top 20th percentile among 146 markets for size of inventory, pricing gains and age of inventory. While an improving economy is part of the reason, a shrinking inventory of homes has put upward pressure on price.