Thursday, October 25, 2012
Residential real estate turning around in Central Valley
Central Valley Business Times
CAMPBELL
October 23, 2012 9:00pm
The Central Valley, which led the nation off the housing cliff four years ago, now seems to be leading it back toward recovery, based on figures from the website Realtor.com.
CAMPBELL
October 23, 2012 9:00pm
• Fresno, Bakersfield among strongest markets in state
• Stockton termed a “zoom town” by Realtors
The Central Valley, which led the nation off the housing cliff four years ago, now seems to be leading it back toward recovery, based on figures from the website Realtor.com.
Nationally, the third quarter saw a housing turnaround accelerating and broadening to reach more markets. There was a reduction in median age of inventory of -13.89 percent, as well as a year-over-year reduction in inventory of -8.51 percent, says Realtor.com.
National median list prices also increased slightly at 2.54 percent year-over-year during the third quarter, its report says.
The West continues to be the dominant region in the current housing turnaround, a transition from the Florida-based turnaround in 2011, it says.
This quarter, nine of the Top 10 “Turnaround Towns” – as Realtor.com terms them -- can be found in Western states and seven of the top ten are located in California. All the markets included in the top ten this quarter have histories of high volume foreclosures and dramatic price declines.
For the first time, Oakland led the nation, replacing Phoenix-Mesa, Ariz., as the top Turnaround Town.
Three California cities, Sacramento, San Jose and San Francisco, are also in the top five.
Seattle-Bellevue-Everett, Wash., ranked fifth, moving up from sixth place in the second quarter, while Bakersfield moved up one spot to sixth this quarter. Santa Barbara moved up to seventh place from tenth in the second quarter. Phoenix-Mesa, Fresno and Miami, Fla., rounded out the top ten.
Sacramento makes its debut on the top 10 of Realtor.com’s Top Turnaround report for the first time ever in Q3 2012. Ranking #2, the inventory count in California’s capital was down -45.94 percent year-over-year and median list prices were up 12.06 percent from Q3 2011 at $224,000.
Though the unemployment rate of 10.3 percent in August 2012 was higher than the national average, it was down from last year’s rate of 11.9 percent. The number of default notices of foreclosure in Sacramento also dropped by -36 percent in the third quarter of 2012 year-over-year.
Bakersfield is moving up on the Realtor.com Turnaround Town list. Total inventory is down -41.77 percent compared to this time last year, and homes are moving 41.54 percent faster. New home construction is surging, with building permits increasing almost 70 percent through August 2012 when compared to the full year of 2011.
However, unemployment is still high at 12.8 percent in August and 1 in every 211 housing units received a foreclosure filing in Kern County in September 2012.
Fresno maintains its position this quarter with a quick-paced housing market moving more than 37.70 percent faster than the third quarter last year, according to the website. Available inventory has also decreased more than -44.27 percent. Limited inventory is creating demand in the Clovis area, with several new home developments planned.
The metro continues to struggle with high foreclosure rates — filings were 1 in every 421 units in Fresno County in September 2012 — and unemployment reached 14.0 percent in August.
Several towns have “zoomed” to significantly higher rankings in just one quarter on the Realtor.com Top Turnaround town list. “The fast recovery demonstrated by these cities in the recent quarter shows these markets are on their way to the top,” the website exudes.
Plagued by economic issues and more than its share of foreclosures, Stockton-Lodi today is a market on the rise, says Realtor.com. In the past quarter, it has moved from #61 to #16 on the Realtor.com Turnaround town list.
Shrinking inventory (ranked #2 in the nation) and less time in inventory (#4 overall) are the keys to Stockton-Lodi’s amazing progress this quarter.
Methodology
Rankings of markets are based on their positive year-over-year median price appreciation, reduction in year-over-year median time in inventory, inventory reductions and low unemployment rates on a year-over-year basis. The Realtor.com Turnaround Towns Report uses a formula based on price appreciation, changes in inventory, time in inventory, unemployment rate, and searches by Realtor.com users — a leading indicator of demand — and the ratio of search to listings to equalize markets by size. The resulting report not only reflects price changes that have taken place, but also gives weight to supply and demand dynamics that will create continued progress in future months.
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