What a year it’s been. Storm clouds, massing last summer over many of America’s housing markets, now have let loose, putting the vast majority of the real estate business into disarray. Housing prices are down (in many cases way down) and hundreds of thousands of homes are in the misery of foreclosure.
The Real Deal has devoted substantial coverage to the severity of the domestic housing situation. As shown in last month’s supplement (on problems facing the industry as well as potential solutions) plenty of individuals and institutions deserve blame.
For this month’s supplement, we check out a bunch of markets across the country that are actually in good shape. We also examine markets that were doing handsomely, but have now deteriorated. And, we dissect some of the country’s worst-performing housing markets.
According to a study in May by the National Association of Realtors, nearly one in three housing markets in the U.S. saw year-over-year price gains.
Yet outside of New York City, the only other cities with more than 2 million residents to have shown median price increases were Houston (up 0.8 percent), Milwaukee (up 1.3 percent) and Salt Lake City (up 3.5 percent).
The metro areas that saw the most vigorous growth were smaller: Spartanburg, South Carolina (up 10.1 percent) followed by Yakima, Washington (up 9 percent; see Yakima blossoms). The housing markets from coast to coast are so depressed that even Buffalo, a classic Rust Belt city with virtually no new developments, ranked in the top five metro areas for median housing price increases (5.5 percent; see Buffalo stays cold — and calm).
Some of the places we profile did well because their real estate markets were relatively cool and never took off the way they did in so-called “hotter” cities. Cases in point: Rochester and Syracuse (see Rust Belt shows bright spots), where prices inched upwards because so few purchases were made by speculators looking for quick profits.
Another factor that boosted the performance in several places was government investment in the local economy. For instance, in El Paso, overall prices have gained 8.5 percent; and real estate experts say one reason (beyond strong trade with Mexico) has been the expansion of the local military base (see Calvary comes to El Paso). That’s also the case with Yakima, where on top of a booming fruit industry, the expansion of the local university has created hundreds of new high-salaried jobs.
One common denominator in the more successful cities was the reluctance of banks to offer subprime loans. In Little Rock (see Little Rock stays afloat), prices climbed 3.8 percent in part because lenders and purchasers overwhelmingly chose more conventional mortgages.
Our report also looks at problem cities, examining the decline in Sacramento (see Sacramento gets the worst of it), where prices are off about 29 percent since last year, the largest drop in America. We also profile Charlotte, North Carolina (see Charlotte housing charmed, but for how long?), where prices are keen, but some worry that losses in the financial sector could mean layoffs in the city. Finally, we revisit the situation in Miami (see Is this the bottom for Miami?) and ask experts there what it will take for that city’s housing market — down 17 percent last year — to finally turn around.