Happy Halloween: Scary-Strong Markets Defying the Scary-Weak Economy
In honor of Halloween, we’ll look at the horror that is the current economy, but take comfort from those real estate markets that are still strong- indeed, that defy economic malaise with an almost eerie strength.
First, let’s create the scene for a good scare (don’t worry. There’s a happy ending. You can uncover your eyes):
- Single-family homes
In a recent National Association of Realtors press release, data show the national median existing-home price for all housing types was $165,400 in September of 2011. This is down 3.5 percent from September 2010. In gauging whether this number is indicative of future real estate value or not, readers should take into account that distressed homes – foreclosures and short sales typically sold at deep discounts – accounted for 30% of sales in September (18 percent were foreclosures and 12 percent were short sales). Interestingly, this percentage is down from 31% in August and 35% in September 2010.
Existing condominium and co-op sales rose 1.8%, a seasonally adjusted annual rate of 580,000 in September from 570,000 in August, and are 5.6% above the 549,000-unit pace of one year ago. The median existing condo pricenationally was $163,800 in September of 2011, which is 1.0% below September, 2010.
The national unemployment rate is currently 9.1%.
Not as Scary as You Think
By now, likely you can hear the high pitched violin music screeching upwards as the shadow of a masked killer grows larger, moved closer… But wait! All is not lost! There are American real estate markets going strong, characters in this story that offer hope to everyone looking for signs of positive economic growth.
Scary-Strong Markets in 2011
1. Wasington DC Metro (Washington-Arlington-Alexandria)
Washington DC was one few markets American real estate markets to post year-over-year gains in median prices for single-family homes. While the unemployment rate has been creeping up in DC, the metro as a whole offers jobs in many industries that attract new residents bringing with them fresh energy, ideas, and buying power. The city also enjoyed comparatively low foreclosure activity in 2010.
- Median sales price for SFR Q2, 2010: $331.9; in Q2, 2011: $340.9
- Median sales price % change for SFR:+ 2.7%
- Units sold: Total state existing-home sales, including single-family and condo, rose 8.3 percent to a seasonally adjusted annual rate1 of 5.14 million in the first quarter from 4.75 million in the fourth quarter, and are only 0.8 percent below a 5.18 million pace during the same period in 2010.
- Foreclosure activity rate in 2011: 23% versus national average of 31%
2. Boulder, CO
Also posting median price sold gains in both single-family residences and condos is Boulder, CO.
- Median sales price for SFR Q2, 2010: $352.4; in Q2, 2011: $340.9
- Median sales price % change for SFR: +5.1%
- Interestingly, the Boulder Metro also posted an increase in condo values. The 2011 median sales price for condos in quarter II is $224.9, a full 12.5% increase from quarter II in 2010.
- Units sold: The overall number of homes sold is a about the same as last year, but this is better news than it might seem at first since we must take into account the tax credit of last year, pushing buyers into the market. Since buyers are still showing up without the credit, Boulder’s strength shows through.
- In all of Colorado, only Boulder County Only Boulder County experienced a decline in distressed property sales year-over-year, less than 10% of total sold.
Data on metropolitan areas is sometimes too broad to get a true picture of how individual counties, cities and districts are performing overall. For instance, when we look at the San Francisco Bay Area (San Francisco-Oakland-Fremont) overall, we see scary numbers: the; median sold price is down 11.1%; the average days on the market (DOM) is up; the number of units sold total is down and the number of distressed properties has increased.
But here, to show you how well an individual micro-market might do within the overall macro market, is a small sampling of 10 cities within the San Francisco Bay Area metro. Note that high prices cannot account for the high DOM in each case, since Belvedere and Stinson Beach are both expensive and have very high median DOM numbers- over 150 days on the market in each case; but on the other end, Los Altos, Palo Alto and Piedmont all list high median numbers, but their median DOM numbers are astoundingly low: between 14 and 18 days!
© ZipRealty 2011
So go forth to your trick-or-treating fun this Halloween with this lesson in mind: Yes, the economy makes for scary times right now, but real estate is hardly dead and buried.