News Room
Florida leads list of 'turnaround towns'
Has the tide turned in these foreclosure hot spots? Or are low inventory and a slow foreclosure process masking price drops still to come?
January 31, 2012 – All eyes are on Florida these days, and it's not just because of Newt and Mitt.
Florida dominates Realtor.com's list of the "Top 10 Turnaround Towns," with Florida cities taking eight of the 10 spots on the list for the fourth quarter of 2011. Once again, Miami ranks first, as it did the third quarter.
Second on the list is Phoenix, which — like Miami — saw property values experience a sharp runup and then a deep plunge. Foreclosures are high in Phoenix, but so is investor interest. The only other non-Florida city on the list is Boise, Idaho.
We're going to guess reduction in inventory propelled many of the Florida cities to the top. But does that mean that the situation in Florida (and Phoenix) has truly turned around?
"The inventory levels are really declining,"’ Lynda Fernandez, spokeswoman for the Miami Association of Realtors, told The Miami Herald this week. "Optimism has been building. Now there is a lot of excitement because we see the market recovering faster and stronger than we expected."
Realtor.com rank cities based on year-over-year median price appreciation, reduction in age of inventory, reduction in total inventory and lower unemployment from a year ago.
If you're talking real estate in Miami, you'd think we were back in the boom days. I've seen at least two real-estate listings in the past week for homes priced way above their market value, with the note that the owner was accepting only cash offers — to avoid problems with appraisals that would come in much lower.
Inventory is so low in some popular neighborhoods that good properties routinely draw multiple offers. Investors with all cash are a big part of the market, but we haven't heard any reports that they are willing to pay twice market value for anything.
The shortage of homes for sale and the competition for good properties extend to other Florida markets — though prices in Tampa, which was not on the turnaround list, hit a new low in the latest Case-Shiller report.
"Two of my buyers made offers last week. One made an offer on a $90,000 small home as an investment. The other made an offer on a rather large $250,000 home as his primary residence. Both homes were short sales and had five other offers on them," Orlando real-estate agent David W. Welch told Realtor.com. "We actually have a shortage of homes on everything under $300,000."
Is the housing crisis over in Florida?
With the large number of homeowners still underwater on their mortgage and the unemployment rate still high, maybe not. The big question (see my previous post) is how many homes are still waiting in the foreclosure pipeline. Florida requires foreclosure cases to go through the courts, and the cases were significantly slowed by the robo-signing scandal – one reason for the decline in inventory. With the average foreclosure in Florida taking more than two years, many more are likely still to come.
Moody's predicts that South Florida's home prices will drop an additional 12% this year and 4% more in 2013, hitting 2001 levels.
"I think we still have a ways to go,"’ real-estate analyst Jack McCabe told The Miami Herald. "This is not going to be a year of stabilization. It’s going to be sometime in 2013, but not before."
Here, in order, are Realtor.com's Top 10 Turnaround Towns:
- Miami
- Phoenix
- Orlando, Fla.
- Fort Myers-Cape Coral, Fla.
- Sarasota-Bradenton, Fla.
- Boise, Idaho
- Naples, Fla.
- Fort Lauderdale, Fla.
- Lakeland-Winter Haven, Fla.
- Punta Gorda, Fla.
(realestate.msn.com)