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Slide Show | May 2013

12 Cities Where Home Prices Have Risen Most

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These 12 metro areas experienced the largest percentage increases in existing single-family home prices among cities with populations of more than 250,000 for the year ending March 31, 2013. Prices come from Clear Capital, a provider of real estate data and analytics.

The spike in home prices in these cities was driven primarily by demand from investors, who snatched up bargains in distressed properties. With tight supply and higher prices, sales in most of these cities are slowing compared with the year before. Until more homeowners recoup more of the market value they lost and list their homes for sale, and until builders create more new homes, supply will remain low -- undergirding higher home prices. However, as the housing recovery progresses, double-digit price hikes will moderate, possibly as soon as the second half of 2013.

U.S. BENCHMARK STATISTICS: One-year change in home prices: 6.8%; Median home price: $177,500; Change in price since 2006 peak: -33.8%; Unemployment rate: 7.5% (seasonally adjusted), 8.1% (non-adjusted). City-specific unemployment rates to follow are non-adjusted; Foreclosure rate: 1 in every 296 households (0.34%); Distressed sales: 23.4%

Sales, supply and other market data come from regional associations of Realtors and multiple-listing services. Foreclosure rates are from RealtyTrac. Home prices are from Clear Capital. All home price data is for existing single-family homes only. Distressed sales statistics are from CoreLogic.


12 Cities Where Home Prices Have Risen Most

1. Phoenix

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One-year change in home prices: +26.2%

Median home price: $174,900

Change in price since 2006 peak: -46.5%

Unemployment rate: 6.7%

Foreclosure rate: 1 in every 184 households (High)

Distressed sales: 21.7%

Investor demand drove up home prices in Phoenix as they competed for distressed -- that is, discounted -- properties to rent out or flip. But their opportunities appear to be declining. Only about one-fifth of all sales in February were distressed properties -- short sales (homes sold for less than the owners owe on their mortgages) and bank-owned foreclosures, or REOs. That's down from 70% two years ago. Recently, more expensive, move-up homes have been selling, which pushes up the median home price.

Although homes are much more affordable than they were at the market’s peak in 2006, sellers have the advantage in Phoenix. Total inventory in Phoenix fell by 4.6% from a year ago, and the months' supply (the length of time it would take to sell everything listed for sale at the current pace of sales) was a short 2.5 months. Rising prices overall will inspire homeowners who couldn't or wouldn't sell to list their homes for sale, increasing supply and eventually slowing price gains.

1. Phoenix

2. Salt Lake City

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One-year change in home prices: +24.1%

Median home price: $164,100

Change in price since 2006 peak: +1.4%

Unemployment rate: 5.0%

Foreclosure rate: 1 in every 215 households (High)

Distressed sales: 16.6%

Salt Lake City largely escaped the boom and bust in housing of the past decade, and home prices didn't have far to go to recover. The city is one of 22 in the U.S. that shows a gain in home prices since the peak of the market in mid 2006.

With a growing economy and a low unemployment rate, buyers here may be confident, but they may wish they had greater selection. The number of homes listed for sale fell by almost one-third from a year ago, to the lowest level in 16 years, and the months' supply stood at 3.4 months, favoring sellers. They received a healthy 96% of their original asking price.

2. Salt Lake City

3. Bremerton, Wash.

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One-year change in home prices: +20.7%

Median home price: $225,005

Change in price since 2006 peak: -30.9%

Unemployment rate: 8.3%

Foreclosure rate: 1 in every 216 households (High)

Distressed sales: 22.6%

Located across Puget Sound from Seattle, the Bremerton-Silverdale metro area anchors Kitsap County and provides a slightly lower cost of living (the median home price is $65,000 less than in Seattle). Sales in the county rose by 13.6% in March from the year before, and the months' supply stood at 2.9 months, favoring sellers. Buyers had less selection than in the past -- the inventory of homes for sale fell by 8.2% from the year before.

Although Seattle and Bremerton had roughly the same percentage of distressed sales, Bremerton had about twice as many bank-owned properties, which sell with a bigger discount -- an enticement to investors and a drag on home prices.

3. Bremerton, Wash.

4. Las Vegas

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One-year change in home prices: +20.7%

Median home price: $149,000

Change in price since 2006 peak: -57.9%

Unemployment rate: 9.8%

Foreclosure rate: 1 in every 99 households (High)

Distressed sales: 42.9%

Las Vegas lost big in the bust but got back in the game this past year as institutional investors (private-equity and hedge funds) came to town. In March, sellers and buyers shared a balanced market, with 4.6 months' supply. Two-thirds of homes sold within 60 days -- considered a "normal" pace of sales.

The number of homes listed for sale fell by almost a quarter from the year before, and actual sales fell by 16.3%. Less than half of sales were distressed, and of those, short sales outnumbered bank-owned properties (REOs) by 3 to 1. Nevada is one of several states where the foreclosure process is regaining momentum after adjusting to legislation designed to prevent improper foreclosures, says Daren Blomquist , of RealtyTrac. The Vegas metro area has the fourth-highest foreclosure rate in the U.S., with more REOs to come. Homes entering the foreclosure process in March increased by 88% over the year before, according to RealtyTrac.

4. Las Vegas

5. Seattle

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One-year change in home prices: +19.2%

Median home price: $290,000

Change in price since 2006 peak: -23.5%

Unemployment rate: 6.6%

Foreclosure rate: 1 in every 176 households (High)

Distressed sales: 20.5%

With increased home sales (up 11.1% from a year ago) and decreased inventory (down 40%), the metro area had just one month's supply of homes in March. Sellers attracted crowds to open houses and enjoyed multiple offers. About one-fifth of all sales were distressed, with more foreclosures on the way. Homes entering the foreclosure process increased substantially from the year before, as lenders caught up on a backlog resulting from a law passed in 2011 that allowed troubled borrowers to request mediation.

5. Seattle

6. San Jose, Calif.

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One-year change in home prices: +19.0%

Median home price: $660,000

Change in price since 2006 peak: -22.6%

Unemployment rate: 7.6%

Foreclosure rate: 1 in every 583 households (Low)

Distressed sales: 16.0%

San Jose is one of the most expensive housing markets in the U.S., driven by population growth and employment in the tech industry. Sellers have the advantage here. The few homes that buyers had to choose from in March -- just 2.1 months' supply -- disappeared fast; the median time on the market was just 18 days, and bidding wars were common.

As a result of tight inventory, home sales fell by 11.7% from the year before. Distressed sales, which accounted for less than one-fifth of the total, were down by more than half from the year before.

6. San Jose, Calif.

7. Sacramento, Calif.

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One-year change in home prices: +18.3%

Median home price: $240,000

Change in price since 2006 peak: -49.2%

Unemployment rate: 9.6%

Foreclosure rate: 1 in every 221 households (High)

Distressed sales: 34.5%

The largest city in California's Central Valley, which was awash in overdevelopment and speculation before the bust and socked by foreclosures afterward, had a mere 0.8 month's supply of homes -- the lowest on this list. The inventory of single-family homes in March declined by more than one-third from the year before, and three-quarters of all properties sold within 30 days. As supply diminished and prices rose, the number of homes sold fell -- by 16.7% from a year ago. Although investors were still active here, most sales were traditional, not distressed. Traditional buyers recognize that home prices are rising and low interest rates won’t last forever.

7. Sacramento, Calif.

8. Reno, Nev.

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One-year change in home prices: +18.2%

Median home price: $184,000

Change in price since 2006 peak: -50.9%

Unemployment rate: 10.1%

Foreclosure rate: 1 in every 177 households (High)

Distressed sales: 40.5%

Casinos are still the largest employers in Reno, a draw for tourists from the Bay Area and Sacramento. Although tourism is not back to prerecession levels and unemployment remains high, the area continues to attract many Californians in search of cheaper housing, lower taxes and a better quality of life, says Helen Graham, of Keller Williams Realty, says that.

With just 3.4 months' supply in March, this market favored sellers. But their experience depended on what they were selling: Traditional sellers averaged 92 days on the market (60 days is the norm); REOs took 109 days; and short sales languished for 210 days. Traditional sellers are returning to the market and now outnumber distressed sellers, and investors are reselling (flipping) previously purchased distressed properties.

8. Reno, Nev.

9. San Francisco/Oakland

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One-year change in home prices: +17.9%

Median home price: $470,000

Change in price since 2006 peak: -38.7%

Unemployment rate: 7.1%

Foreclosure rate: 1 in every 392 households (Low)

Distressed sales: 12.2%

The San Francisco metro area is composed of five counties, but this is really a tale of two cities -- San Francisco and, across the Bay, Oakland. The market in both cities favors sellers. In March, San Francisco had four months' supply of homes, and the median time on the market was just 23 days. In Oakland (Alameda County), the months’ supply was 2.1 months, and homes sold in an average of 50 days. Sales were off just slightly from a year ago: down 1.4% in San Francisco County and down 2.5% in Alameda County. With tight inventory, prices were pushed higher.

While the number of homes in the foreclosure pipeline fell by two-thirds or more in both cities in the past year, the rate of foreclosure in Oakland (1 in every 363 households) far exceeded that of San Francisco (1 in every 1,465 households), promising continued opportunity for investors.

9. San Francisco/Oakland

10. Atlanta

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One-year change in home prices: +17.4%

Median home price: $115,400

Change in price since 2006 peak: -42.8%

Unemployment rate: 8.3%

Foreclosure rate: 1 in every 154 households (High)

Distressed sales: 28.3%

Despite an unemployment rate a bit higher than the U.S. rate, Atlanta’s economy is making a comeback, posting positive job growth for 30 consecutive months, according to Metrostudy, a provider of real estate market data and analysis. Steady job growth increased buyer demand for housing in the metro region, but home buyers had to compete with investors. "Atlanta is now the main dish on the investor buffet table," says Hank Miller, of Atlanta Communities Real Estate. In March, sales of single-family homes fell by 11.8% from the year before, reflecting limited supply and higher prices. Tight inventory resulted in multiple offers for well-priced homes -- good news for sellers. Sales of bank-owned homes fell to just over a quarter of all sales, from nearly half last year.

The supply of new homes may increase more quickly here than elsewhere, because builders have more finished lots that are ready to build on. Single-family detached housing starts almost doubled in the fourth quarter of 2012 compared with the year before, according to Metrostudy.

10. Atlanta

11. Santa Rosa, Calif.

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www.ci.santa-rosa.ca.us

One-year change in home prices: +15.9%

Median home price: $380,000

Change in price since 2006 peak: -38.4%

Unemployment rate: 7.6%

Foreclosure rate: 1 in every 369 households (Low)

Distressed sales: 25.8%

Santa Rosa is the county seat of Sonoma County and the largest city in the North Bay area. Tight inventory favored sellers in March, with only 3.4 months’ supply. Sellers received full asking price, and half of them sold their properties within 50 days.

Sales fell by 4.6% from the year before, as investors found fewer bargains and higher prices. In the first quarter of 2013, the number of homes in the foreclosure pipeline in Santa Rosa fell by more than two-thirds from the year before, to the lowest level since early 2007.

11. Santa Rosa, Calif.

12. Boise, Idaho

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One-year change in home prices: +15.6%

Median home price: $127,000

Change in price since 2006 peak: -36.3%

Unemployment rate: 6.5%

Foreclosure rate: 1 in every 243 households (High)

Distressed sales: 17.8%

The housing market in Boise has begun to settle down following its earlier, go-go days of recovery. In March, the number of existing homes for sale increased by 10% year to date. "It's clear that more owners are getting their relationship with their mortgage 'right side up' and electing to list their homes for sale," says Marc Lebowitz, of the Ada County Association of Realtors. Even so, with less than four months' supply of homes on hand, the number of homes sold fell by 5% from the year before, keeping upward pressure on prices.

12. Boise, Idaho

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