Lower Priced Markets Gaining Value this June
We’ve highlighted pricey markets getting pricier. And though such news can be both interesting and insightful for those studying the country’s real estate, it can also be a touch depressing for middle-class buyers priced out. But fortunately, though home prices are up all over the nation, mid-range buyers can still find many affordable markets. Prices in these markets are up, with potential to go up still further; but because the prices are relatively low and because the markets show signs of heath, they make good options for buyers who want affordable homes that will also appreciate in value.
So, without further ado, we bring you relatively affordable major metros posting price gains. We’ll look at gains in both year-over-year and month-over-month categories.
In the chart below, ZipRealty tracks the median sold price for all properties (except multi-family and land). In the top grid, you see the median sold price for June 2011, then June 2012, and the percentage of change. In the lower grid, you see the same information, but the time period studied is May 2012 to June 2012, for the percent change from month-to-month.
We chose Phoenix (the biggest winner), Orlando and Las Vegas for year-over-year comparison and Richmond, Philadephia and Chicago for month-over-month comparison. More analysis follows the data.
(C) ZipRealty, Inc
1. Year-Over-Year Gains
Phoenix price inflation caused by a confluence of factors: low inventory, low interest on loans, fewer distressed properties on the market, and a flood of investors speculating on a market posed to turn around.
Orlando too has those factors to thank for its improved median sold price. This city is particularly noteworthy as its steady progress has been in fact incredibly steady. As of July of this year, the median price posted positive year-over-year gains for 13 consecutive months.
Las Vegas, NV
Las Vegas, meanwhile, has become a big magnet to investors and people purchasing second homes (for rental income most often, but sometimes for vacation homes as well). Proof of investor interest is in the type of home available to buy. DataQuick reports that in the overall Las Vegas market in June of 2012, “the higher price categories continued to post the largest year-over-year sales gains, while activity declined sharply in the lowest price segments. The total number of homes that sold for less than $100,000 fell 26.1 percent in June compared with a year earlier – a sign sub-$100,000 deals are getting harder to come by.” Those homes, obviously, offer enticing rental income or flipping potential.
2. Month-over-Month Gains
Inventory spurred Richmond’s month over month gain. New Listing in this area for the month of June, 2012 yielded 2,395 available resale dwellings, a steep decline of 12.40% or 339 in June, 2011. By the end of June, total housing inventory dipped 19.01%. Pending sales in June were up—over 24%--another indicator that summer progress could continue into fall.
Low inventory pushed prices up in June of this year in Philadelphia. Further proof of market improvement: Though fewer homes were sold in June 2012 (again, attributable to fewer homes on the market overall), by the end of June, the number of pending units also increased 1.3%.
Chicago has made the news several times in the past few months for showing signs of life. After depressingly sluggish sales and dismal property values, the market began a turn around this May. As the Chicago Tribune puts it, “It took 50 months to happen, but the median selling price of a home in the Chicago area posted a year-over-year gain in May.” And as ZipRealty’s data indicate, June prices increased over May.
Anna Marie Erwert writes from both the renter and new buyer perspective, having (finally) achieved both statuses. She focuses on national real estate trends, specializing in the San Francisco Bay Area and Pacific Northwest. Follow Anna on Twitter: @AnnaMarieErwert.