RE/MAX recently released its National Housing Report for January 2013. The monthly report dates back to 2008 and is based on MLS data from 52 – 53 of the largest metropolitan areas in the United States. The January report contained data through the end of 2012.
The report showed a positive trend in both home sales and the median price of homes sold. Nationwide, the median sales price rose 7.6% in 2012 (when measured from Dec 2011 – Dec 2012). Sales volume was up by 3.8% during the same period. At the metro level, the trends were varied. Some housing markets experienced price and volume gains much higher than the national average.
The following metro areas had the biggest gains in home sales during 2012. The percentage beside each metro area shows the increase in sales over the last year or so:
1. Raleigh-Durham, N.C. +31.3%
The Raleigh meto-area housing market has a lot going for it. But there’s one overriding factor that boosted home sales in 2012 — population growth. Forbes recently ranked the fastest growing cities in the U.S., factoring in population growth for 2012 and 2013 (projected), as well as economic growth. The Raleigh area was fourth on their list.
The Raleigh-Durham job market is largely powered by the Research Triangle companies, as well as the multitude of colleges and universities located in the area. This attracts young, upwardly mobile Americans — a key home-buying demographic. According to RE/MAX, home sales jumped more than 31% in 2012. Home prices rose more modestly. According to Zillow, the median sales price in the Raleigh area rose by 1.5% over the last year or so.
2. Albuquerque, N.M. +29.6%
Albuquerque has one of the lowest unemployment rates in the country, among larger cities. Unemployment fell to 6.2% last year, down from a high of 8.9% in 2010. This enables more residents to buy homes, supporting property values and lifting the housing market as a whole. Sales volume rose by nearly 30% in 2012.
The average sales price for single-family homes in Albuquerque was $206,514 at the end of 2012, a gain of 4.45% over the fourth quarter of 2011, according to the local Realtor group.
3. Providence, R.I. +24.5%
Providence is mirroring some of the real estate improvements happening across the state. Rhode Island home sales and median prices both rose in the fourth quarter of 2012. Statewide, single-family home sales jumped by 25% from Q4 2011 to Q4 2012, according to a recent industry report.
Sales volume may be rising in Providence, but that hasn’t done much for home prices in and around the city. According to most indicators, the city’s median sales price is still in the red year over year, bucking the statewide trend.
Unemployment remains a factor as well. Sales have risen in spite of the local job market, not because of it. The unemployment rate in the Providence-Fall River-Warwick metro area continues to hover well above the national average. This reduces the demand for housing and puts downward pressure on prices.
4. Chicago, Ill. +21.1%
Inventory is the big story in Chicago. The number of homes for sale in the Chicagoland area dropped 50% from Dec 2010 to Dec 2012. This is according to data published recently by Midwest Real Estate Data (MRED), the MLS provider for Chicago’s real estate market. Meanwhile, sales volume is up 21% year over year. The supply-and-demand situation is slowly shifting from the buyer to the seller.
Housing conditions in the Chicago metro area are such that sellers can set higher asking prices, as long as they are reasonably close to comparable sales figures. The median selling price for the metro area rose 10% over the last year, according to Zillow. The Illinois Association of Realtors reports a more modest price gain of 4.5%, from Dec 2011 to Dec 2012.
But the recovery here is uneven. Some parts of Chicago still have a major excess of distressed (foreclosure) properties for sale. This will continue to put a drag on growth in 2013.
5. Hartford, Conn. +19.9%
According to the Greater Hartford Association of Realtors (GHAR), December 2012 marked ten straight months of increased home sales across the Hartford area. Pending sales also rose significantly over the last year. But residential real estate prices in the metro area are still soft. The median sales price in Hartford dipped slightly in 2012, ending the year 1.17% lower than in December 2011.
“Although the closed sales numbers are encouraging, I would feel even better about the housing market recovery when prices stabilize or increase,” said Jeff Arakelian, President and CEO of GHAR.
6. Charlotte, N.C. +16.7%
Real estate developers in Charlotte are feeling confident about the local housing market. Exhibit A: Standard Pacific Homes teamed up with the Charlotte-Mecklenburg Housing Partnership to develop a new neighborhood about a mile north of the city center. Brightwalk, as it is known, is a massive project that combines single-family homes, townhouses and apartments on 98 acres.
They have reason to be confident. Demand for residential real estate is rising across the metro area. Home sales climbed by nearly 17% over the last year. The latest (December) release of the S&P/Case-Shiller Home Price Index showed a 4.1% gain in Charlotte house prices, year over year.
Most experts and analysts agree that 2012 marked a turning point for the U.S. housing market. Granted, some cities are still grappling with excess inventory, weak demand, and high levels of underwater homeowners. But it seems as though the worst is behind us.