Real estate markets may be showing setbacks on their road to recovery, but they’re still mostly on the mend from a year ago.
A number are even emerging as boomlets — some back from the brink. Here sales of homes and offices are up healthily. Prices too.
So where are vital signs strongest? In housing, Phoenix is among bubble-busted cities starting to bloom again.
Energy-related office sales are driving a resurgence in Denver. The outlook for Phoenix, San Jose, Salt Lake City and Boise is also rosy. Getty Images View Enlarged Image
Of the top 100 markets in the U.S., Phoenix is deemed the “most improved” by CoreLogic, based on a survey the research firm did in May.
“Phoenix is especially experiencing a surge in prices, a large drop in delinquency rates and an improvement in the number of transactions,” said Sam Khater, CoreLogic’s senior economist.
In Maricopa County, where Phoenix is, the median price of homes sold in April jumped to $143,000 vs. $115,000 a year be fore, according to the Arizona Regional Multiple Listing Service.
The next most improved markets CoreLogic pinpointed were Boise, Idaho, Salt Lake City, Denver and San Jose, Calif.
Denver and San Jose homes and offices are gaining steam.
The office sector is considered a proxy for local economies. San Jose’s is tech-driven. Denver’s is energy-related. The area also attracts out-of-state residents and new businesses.
“People are moving from expensive markets on the West Coast,” said Asieh Mansour, head of Americas research at commercial real estate firm CBRE.
Many tech and social media startups pick Denver, she says, partly for its outdoor amenities.
Big mortgage delinquency falls have especially helped Phoenix and San Jose, Khater says.
In Phoenix, serious delinquencies — those over 90 days — were down 42% in March vs. a year earlier. San Jose’s fell 30%.
Waning inventory of distressed housing is also helping Florida’s recovery. Several Florida markets are seeing “breakout” price gains of at least 10% year-over-year, says Ken Fears, senior economist with the National Association of Realtors. Risers include Miami, Tampa and Orlando.
But Fears stresses that such gains are from “very low” levels. And the number of distressed homes in the system is still high.
Distressed homes have been the biggest factor holding back prices in many markets, Khater says. Bank-owned homes, he says, typically sell at a 30% discount to nondistressed homes.
No Bubble In Boise
It’s different in Boise, Salt Lake City and Denver. They weren’t as impacted by the housing bubble and bust, so weren’t swamped by an overhang of negative equity. Meanwhile, their local economies are improving.