According to a new report from Trulia nearly 30 cities have been designated “in the clear” and should be recovering from the Great Housing Bust.
Low foreclosure rates and an increase in asking prices of at least 4% were qualifiers to be considered in the clear. Or as Trulia’s chief economist Jed Kolko said, “solid base for housing recovery”.
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Kolko continued,
“We defined (‘in the clear’) as metros with positive year-on-year asking-price growth and a low or moderate share of homes in foreclosure. In all, that includes 29 metros,” Kolko added, “but we didn’t list them all out because some have only very slightly price growth. Best to focus on those six.”
The big six “in the clear markets avoided the worst of the bubble,” Kolko said. Amid the mortgage crisis, “those metros didn’t have big price declines that we saw in Miami, Phoenix and Detroit – places that still have a lot of homes left in foreclosures.”
Some “in the clear” cities also are enjoying robust, new-home construction, Kolko added. “But the main driver in those markets is job growth.”
The critical element for a true long term housing recovery comes down to one thing: Jobs. The housing market will not fully recover until the unemployment rate reverses direction and folks feel confident enough to commit to a home purchase.
At the top of Trulia’s list:
San Jose
Pittsburgh
Denver, 7.2 percent asking-price increase year-over-year in June.
Miami (up 16.1 percent in asking price during June year-over-year)
Phoenix (up 18.9 percent)
Orlando
West Palm Beach
Cape Coral, Fla.
Fort Myers, Fla.
Warren-Troy-Farmington Hills, Mich
This next bit is critical for agents to understand: Kolko warned that price gains could reverse as foreclosed homes in those areas come onto the market.
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Worth stating again, JOBS and EMPLOYMENT = Housing Recovery.
“That means (those markets) are not just dependent on investors,” Kolko said. “People are moving there for jobs. Developers are betting on the future by resuming construction.”
Agents, what are you seeing in YOUR market…is YOUR market…’In The Clear’?
