Nationwide, the housing market is still reeling from one of the worst crashes in history. Still, over the next two years, some areas are expected to start recovering. Researchers at 24/7 Wall St. have identified the ten metropolitan areas where home prices are projected to increase the most by next year. However, since most of those markets have experienced exceptionally large drops in home prices, the revival is bittersweet.
Six of the ten metropolitan areas that are projected to have the largest home prices increase from the second quarter of 2011 to the second quarter of 2012 are also among the top 50 areas that experienced the worst housing prices declines from the second quarter of 2008 to the second quarter of 2011.
The housing markets in these areas were so decimated by their real estate bubble burst that they are considered to be at their bottom with no room to get even worse. Such bottoms tend to draw in investors. The inflow of new money causes these markets to bounce back, driving home prices back up.
Of course, there are many large cities, such as Las Vegas, Nev., and Riverside, Calif., that were also hit exceptionally hard by the housing crisis that are not expected to recover in the coming year. The difference between these cities and those on this list is their size. The metro areas that are projected to recover have slightly more than 100,000 residents, for the most part. Carson City, where home prices are expected to increase by 15.5 percent, has fewer than 55,000 residents. As a result, housing inventories are much smaller. It is much easier to turn around a housing market on this scale than on a much larger one.
24/7 Wall St. used data from Fiserv for 384 metropolitan areas to compile this list of the ten cities where home prices are expected to increase the most from the second quarter of 2011 to the second quarter of 2012. They also included future projected price increases, population, when the metropolitan areas reached their price peaks, and unemployment rates, all provided by Fiserv.
Change in home prices (2011 Q2 to 2012 Q2): 6.2 percent
Change in home prices (2012 Q2 to 2013 Q2): 14.2 percent
Prices reached peak in: 2008 Q2 (-27.1 percent)
Unemployment: 11.2 percent
Home prices in Mobile, Ala., dropped more than 27 percent in the past three years. From the second quarter of 2010 to the second quarter of 2011, prices dropped 18.8 percent — the second largest decrease in the country.
According to the Mobile Area Association of Realtors, foreclosures and short sales accounted for 40 percent of all sales in the area for the 12 months that ended October 1. However, the metropolitan area is one of a few in the country where prices are expected to increase significantly this coming year and even more so the following year.
The real estate market is expected to make a comeback in the coming 12 months, with a projected increase of 6.2 percent in prices.
Change in home prices (2011 Q2 to 2012 Q2): 7.0 percent
Change in home prices (2012 Q2 to 2013 Q2): 1.5 percent
Prices reached peak in: 2008 Q1 (-7.9 percent)
Unemployment: 8.0 percent
Home prices in Syracuse, N.Y., decreased only 7.9 percent from their peak in the first quarter of 2008. This is not only significantly lower than the national drop of 32.3 percent from the national peak in the first quarter of 2006, but also significantly lower than other metropolitan areas on the list.
The city’s housing market has done exceptionally well compared to the rest of the country. In 2010, it had the fifth-lowest foreclosure rate in the nation, according to RealtyTrac.
Change in home prices (2011 Q2 to 2012 Q2): 7.4 percent
Change in home prices (2012 Q2 to 2013 Q2): 7.3 percent
Prices reached peak in: 2007 Q3 (-12.6 percent)
Unemployment: 6.6 percent
Las Cruces’s unemployment rate of 6.6 percent is the 47th lowest in the country and is much lower than the national rate of 9.1 percent. This measurement indicates a healthy economy, which in turn influences the housing market. From the second quarter of 2011 to the second quarter of 2012, housing prices are expected to increase 7.4 percent.
This trend is projected to continue through the next year, and prices to increase another 7.3 percent.
Change in home prices (2011 Q2 to 2012 Q2): 7.5 percent
Change in home prices (2012 Q2 to 2013 Q2): 2.4 percent
Prices reached peak in: 2007 Q4 (-13.2 percent)
Unemployment: 10.7 percent
The Niles-Benton Harbor, Mich., metropolitan area has seen a 13.2 percent decrease in housing prices since its peak in the fourth quarter of 2007.
In the last 12 months, housing prices dropped by 5.2 percent. Prices are expected to bounce back dramatically, increasing 7.5 percent by the second quarter of 2012, and then increasing just 2.4 percent in the following 12 months.
Change in home prices (2011 Q2 to 2012 Q2): 7.9 percent
Change in home prices (2012 Q2 to 2013 Q2): 3.5 percent
Prices reached peak in: 2006 Q4 (-41.4 percent)
Unemployment: 9.6 percent
Home prices have decreased by 41.4 percent in St. George, Utah, since the fourth quarter of 2006. In just the last twelve months, prices have decreased 12.4 percent — the eighth largest drop in the country.
However, from the second quarter of 2011 to the second quarter of 2012 prices are projected to increase 7.9 percent.
(Charles B. Stockdale--24/7 Wall St./The Blaze)