Hard hit areas show the way for lesser-impacted areas such as Chester County
By Jill Goldman, Special to The Times
Several years ago I attended a real estate conference just as the housing market was really starting to decline, and one of the economic analysts assured the eager listeners (all real estate professionals) that eventually the housing market would not only level off and even start to climb, but that the recovery would occur first in the locations that were hit the hardest and felt the decline first. This made no sense to me at the time, as I assumed that the geographic markets with the least decline in 2008 and 2009 would climb back up first, since they had more stable overall economies.
Our local economy and housing market was one of those, and I felt certain that we would be smugly seeing the recovery here, first. With no background in economics, I was simply second guessing the expert, and not surprisingly, the expert was right all along. When the “housing bubble” burst in 2008, the hardest hit regions were those where growth and prices had been suspiciously unprecedented; thus those markets had no where to go but down – for example, Nevada, Florida, Arizona and California. In addition, the overall economic conditions then caused a serious decline in states like Michigan and Ohio, where sudden and rampant unemployment caused normally predictable and stable housing markets to bottom out. We have recently written about the local signs of recovery, in micro supply and demand terms, and how the “feel” among real estate professionals is that the market is a little more stable and seems to have stopped declining. In May, Inman News reported that the recovery is actually verifiable in certain areas, specifically those areas where the decline was first felt.
According to Zillow’s Zestimate Home Valuation Portal (usually reporting values on the low end), U.S. home values continued to rise this spring. As of May, national home values were up (0.5 percent) for the third month in a row, settling at $148,100. Despite the spring season up upswing – 0.5 percent in March, 0.8 percent in April – home values remain down (0.9 percent) on a yearly basis from last May when they stood at $149,445.
However, some hard-hit metro areas are seeing a sustained recovery in home values, including Phoenix and three Florida markets: Fort Myers (No. 2), Miami (No. 3) and Punta Gorda (No. 7). Fort Myers and Miami-Fort Lauderdale, Fla., saw 6.7 percent and 5.2 percent year-over-year home value increases, respectively, in May.
Not surprisingly Phoenix, which has been reporting recovery for some time, topped the May list for its year-over-year home value increase of 9 percent to $133,400. High yearly increases in median list price as well as age and amount of inventory catapulted Arizona’s capitol metro to the top of Realtor.com’s Top Turnaround Town list in the first quarter of 2012. Denver captured the No. 10 spot in May with a 2.6 percent year-over-year home value increase to $209,000, the second highest home value of any metro in the top 10. Honolulu (No. 9) has the by-far highest valuation in the top 10 at $489,000. Tulsa, Oklahoma (No.4), and Oklahoma City (No. 6) are in the top 10, too, as Zillow Home Value Index list-toppers in 2012. Finally, Grand Rapids, Mich. (No. 5) and Canton Ohio, in states very hard hit in 2008, are now in the top 10.
What does this all mean? It means first, the economic experts who predicted that the first to fall would be the first to climb were right. And, more importantly, others will follow. The recovery is underway!