Slide Show | January 2013
12 Cities Where Home Prices Have Risen Most
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The markets in most of these cities featured in this slide show peaked and busted in 2006 and are now well into their recovery. Most of these cities have rates of unemployment at or below the national average, which is indicative of healthy economies that fuel buyer confidence and demand. Supply in most of these cities is low and favors sellers.
Sales, supply and other market data reflect the latest data available from regional associations of Realtors and multiple-listing services. Months' supply is how long it would take to sell everything listed for sale at the current pace of sales -- a market with four to six months' supply is considered balanced between seller and buyer. Unemployment rates are from the Bureau of Labor Statistics, and foreclosure rates are from RealtyTrac.
Home prices are from Clear Capital. Distressed sales and negative-equity statistics are from CoreLogic.
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12 Cities Where Home Prices Have Risen Most
1. Phoenix
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Median home price: $160,000
Change in price since peak: -51.2%
Unemployment rate (natl. avg. is 7.7%): 6.9%
Foreclosure rate (natl. avg. is 0.40%): 1 in every 384 households (0.26%)
This city is living up to its name, rising from the ashes of the real estate bust. In the third quarter of 2012, Maricopa County's housing market favored sellers, with just 2.7 months' supply of inventory. More than one-fourth of all sales were distressed properties (short sales and foreclosures), often snatched up by investors, but that's down by more than 40% from last year, which has helped boost prices again. With tighter supply, sellers got 100% of their original list price -- no discounting needed -- and sold in an average of 45 days. 1. Phoenix
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12 Cities Where Home Prices Have Risen Most
2. Provo, Utah
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Median home price: $192,050
Change in price since peak: -9.3%
Unemployment rate: 4.5%
Foreclosure rate: 1 in 1,685 (0.06%)
Homeowners in the third largest city in Utah saw home prices rise substantially in the past year, gaining back much of the decline since the bust (which didn't occur here until early 2008). In the third quarter of 2012, home sales in Utah County rose by 10.7% from the year before. The months' supply stood at a balanced 4.7 months. Buyer confidence is buoyed by a thriving local economy (anchored by Brigham Young University), with solid job growth and the lowest unemployment rate of any city on this list. Although nearly one-fourth of all sales were distressed properties, that's down by more than one-third from last year. 2. Provo, Utah
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12 Cities Where Home Prices Have Risen Most
3. Cape Coral-Ft. Myers, Fla.
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Median home price: $124,300
Change in price since peak: -56.9%
Unemployment rate: 9.2%
Foreclosure rate (Cape Coral only): 1 in every 258 households (0.39%)
This metro area on the southwest coast of Florida had many foreclosures and a high rate of vacant homes during the real estate bust. In October 2012, the months' supply stood at 3.8 months, slightly favoring sellers. Condo sales rose by 28.9% from the year before, fueled by snowbirds and investors. More than one-third of all sales were foreclosures or short sales (meaning the lender accepts payment in full for less than the homeowner owes on the mortgage). That's down by one-fifth from last year. 3. Cape Coral-Ft. Myers, Fla.
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12 Cities Where Home Prices Have Risen Most
4. Minneapolis, Minn.
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Median home price: $188,000
Change in price since peak: -33.7%
Unemployment rate: 5.3%
Foreclosure rate: 1 in every 682 households (0.15%)
The Minnesota Nice ethic didn't protect the Twin Cities from the excesses of the boom years. But the metro area's real estate market is coming back strongly now. In October 2012, sales grew by 15.1% from the year before, and the inventory of homes for sale fell by 29.7%. The months' supply was 3.7, slightly favoring sellers. The average time for a home to sell was 104 days, down from last year but still lengthy. Sellers received an average of 94% of their original list price.
Inventory stands at a nearly ten-year low. Distressed sales in this market are the lowest of all the cities on the best list, just 15% of all sales. As homeowners see prices continue to rise, they'll overcome their hesitancy and begin to list their homes for sale, increasing inventory and moderating the pace of price hikes. 4. Minneapolis, Minn.
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12 Cities Where Home Prices Have Risen Most
5. Akron, Ohio
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Median home price: $95,000
Change in price since peak: -39.2%
Unemployment rate: 6.1%
Foreclosure rate: 1 in every 651 households (0.15%)
The double-digit gain in home prices in this northeastern Ohio city puts a little shine on the Rust Belt. The market in Summit County, which a few years ago was burdened by high inventory, much of it distressed, is improving. Home sales -- helped by a not-so-dire unemployment rate in the Akron metro area -- rose in 11 out of the past 12 months; in October they rose by 20.8% from the year before. The months' supply fell from 11.3 months a year earlier to seven months, and many of the homes on the market are of higher quality.
Homes took an average of 120 days to sell, still a long haul for sellers, but down from 142 a year ago. Almost one-fourth of sales were distressed, but that's down from one-third last year. "We're not totally out of the woods yet, but we are rebounding," says local agent A'i Whitley. 5. Akron, Ohio
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12 Cities Where Home Prices Have Risen Most
6. Youngstown, Ohio
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Median home price: $70,000
Change in price since peak: -40.6%
Unemployment rate: 7.5%
Foreclosure rate: 1 in every 633 households (0.16%)
Despite its reputation as a beleaguered Rust Belt city, the rate of unemployment here is just under the national average, and the share of distressed sales in the metro area is relatively low, at 16.1% -- just a tad less than last year. Demand and supply are moving in the right direction: In October 2012, sales in Mahoning County were up by 9.5% from the year before. The market favored buyers, with 8.7 months' supply of homes. Still, sellers can take heart: That's down from 12 months' supply last year. 6. Youngstown, Ohio
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12 Cities Where Home Prices Have Risen Most
7. Seattle, Wash.
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Median home price: $315,000
Change in price since peak: -27.3%
Unemployment rate: 7.3%
Foreclosure rate: 1 in every 1,149 households (0.09%)
Seattle saw foreclosure activity rise in the third quarter from the year before. That's because Washington State passed a law that took effect in 2011 requiring lenders to mediate with troubled homeowners and provide alternatives to foreclosure -- which delayed foreclosures and built a backlog of distressed properties that have begun to come to market. That has certainly attracted investors, but sales of distressed properties as a share of the total fell by one-third since last year, which suggests that traditional buyers have returned to the market, too.
In October 2012, sales of homes in King County rose by 33.5% from the year before, while the listings of homes for sale fell by 43.7%. New listings exceeded closed sales by just 132 properties, and months' supply stood at just 2.2 months. Buyers have little to choose from, and sellers who are willing to list their homes for sale are fielding multiple offers. 7. Seattle, Wash.
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12 Cities Where Home Prices Have Risen Most
8. Salt Lake City
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Median home price: $178,000
Change in price since peak: -8.5%
Unemployment rate: 4.6%
Foreclosure rate: 1 in every 729 households (0.14%)
With an economy that continued to grow and a low unemployment rate, buyers here don't lack for confidence, but they do lack properties to look at. In the third quarter, the months' supply stood at a mere one month, the lowest of the cities in this list. In a kind of Catch-22, would-be sellers may choose not to list their homes for sale if they think they won't find something to buy.
Like Provo to the south, Salt Lake City largely escaped the boom and bust of the past decade, and home prices didn't have far to go to recover. In the third quarter of 2012, sales of single-family homes in Salt Lake County increased by 12% from the year before. Homes took an average of 81 days to sell, down from 120 the year before -- good news for sellers. The share of distressed sales in the metro area is just 15%, down by more than one-third from last year. 8. Salt Lake City
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12 Cities Where Home Prices Have Risen Most
9. Boise, Idaho
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Median home price: $125,000
Change in price since peak: -42.8%
Unemployment rate: 6.5%
Foreclosure rate: 1 in every 675 households (0.15%)
Boise spent much of 2012 in the initial, go-go stage of recovery, with investors and traditional home buyers competing for limited inventory and bidding up prices. Sales of existing homes rose by 2.9% from the year before. The months' supply stood at only 2.9 months, and buyers were snatching up homes in an average of 60 days. The share of distressed sales (short sales and foreclosures) in October fell by half from a year ago, to 18% this year. With less supply, especially of the bargain-basement variety, and rising prices, investor competition will diminish and prices will stabilize. 9. Boise, Idaho
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12 Cities Where Home Prices Have Risen Most
10. San Jose, Calif.
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Median home price: $632,000
Change in price since peak: -26.7%
Unemployment rate: 7.9%
Foreclosure rate: 1 in every 504 households (0.20%)
San Jose is the most expensive housing market in the U.S., driven by employment in the tech industry. In the third quarter of 2012, sales of single-family homes in Santa Clara County rose by 8.6% from the year before, while sales of condos rose by 2.8%. With just under two months' supply of inventory, homes don't linger long on the market. In October, the median time on the market was a mere 22 days. Sellers received 100% or more of their list price, on average. In October, 22% of all single-family home sales in the county were distressed (short sales or foreclosures), down from a 34% the year before. 10. San Jose, Calif.
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12 Cities Where Home Prices Have Risen Most
11. Washington, D.C.
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Median home price: $430,000
Change in price since peak: -29.6%
Unemployment rate: 5.3%
Foreclosure rate: 1 in every 14,129 households (0.01%)
The nation's capital suffered from the boom-and-bust ills of lax lending, speculation and overbuilding. But its economy and housing recovery are undergirded by population growth and employment in government, defense and tech. In October 2012, sales of homes in the metro area rose by 16%. The region has just 2.5 months' supply of inventory. Homes sold in an average of 54 days for 96% of their list price, which means sellers are pricing their homes right, with just enough wiggle room for buyers to negotiate a bit. 11. Washington, D.C.
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12 Cities Where Home Prices Have Risen Most
12. Tucson, Ariz.
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Median home price: $145,000
Change in price since peak: -44.3%
Unemployment rate: 7%
Foreclosure rate: 1 in every 331 households (0.30%)
Investors have helped propel home prices in Tucson higher. Now, with supply tightening, sellers should be able to command handsome prices. As Brenda O'Brien, a local real estate agent, writes in her blog: "There are no killer deals here anymore." She notes that nice homes now often receive multiple offers, and buyers who dither lose out. After the holidays and with the snowbirds in town, she expects the beginning of a "gangbusters" spring season in January. In October, sales increased by 9.4% from the year before. Months' supply stands at 3.9 months, and homes are selling in an average of 49 days for 97% of their list price. 12. Tucson, Ariz.
