The U.S. housing market is in the midst of a recovery, but the strengthening numbers in sales and prices are not evenly distributed across the nation. Much like before the crisis, more people have always gravitated toward homes in warmer climes and coastal scenery, and the recovery is driven by higher activity in these areas. But even among these hotspots there are the hottest of the hot, and these cities now include Phoenix, Los Angeles, Orlando and Miami. For more on this continue reading the following article from TheStreet.
Sick of the cold and snow that’s been slamming cities from Sacramento, Calif., to Portland, Maine, recently? Maybe it’s time to consider moving to a warmer locale.
"Whether they’re from Chicago, Toronto, New York or Boston, lots of people move to South Florida for our warmth," says Andrew Barbar, a Keller Williams East Boca Raton broker and vice president of the Florida Realtors association. "People who come here from cold climates enjoy soaking up the sun."
Warm states such as Florida have been attracting a greater and greater share of the U.S. populace for decades.
For instance, census figures show that the Sunshine State’s population nearly doubled between 1980 and 2010, while cold-weather Michigan and Ohio grew by only about 6.7% (way below the 36.3% national average).
Barbar, who’s lived in Florida for nearly 40 years, says his state’s climate "is the primary reason people move here." The beach weather attracts not only buyers from cold U.S. and Canadian locales, but also from cooler parts of Germany, Britain and other European countries.
"Florida is attractive not only to people up North, but to people all over the world," the Realtor says.
In fact, a good climate is helping lots of U.S. cities rebound from the deep housing bust that many faced during the past few years.
Market tracker Realtor.com found recently that warm locales made up eight of the 10 U.S. cities that saw the greatest percentage gains in asking prices over the 12 months ended Jan. 31. (The number jumps to nine of 10 if you count Washington, D.C., as a warm-weather city.)
Barbar says out-of-state buyers have helped push Miami’s inventory of unsold homes down to less than a five-month supply these days from 39 months during the worst of the bust.
"All of coastal Florida has not only stabilized but is recovering," he says. "We’re seeing a seller’s market right now."
Here’s a look at housing conditions in America’s five warmest major cities.
Rankings are based on each locale’s mean daily temperature during the December-to-February period, as calculated by the U.S. National Oceanic and Atmospheric Administration using 1981-2010 readings.
Housing values refer to median asking prices for homes up for sale as of January on Realtor.com, the National Association of Realtors’ official property-listing site.
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Fifth-warmest U.S. market: Phoenix
Mean winter temperature: 57.2 degrees
Phoenix’s desert-like climate has long attracted lots of buyers from cold locales in the United States and Canada.
"The warm weather is [key] to anyone who’s looking for a second home here," says Jodi Kevern of Arizona Focus Realty in suburban Phoenix.
She says Phoenix draws lots of vacation- and retirement-property buyers from Minnesota and the Dakotas, as well as from the Canadian provinces of Alberta, British Columbia and Saskatchewan.
"Everyone in Eastern Canada and the Northeast United States tends to travel to Florida for their warmth, so we mostly see people from the Middle and Western parts" of Canada and the United States, Kevern says.
Such out-of-town interest is combining with increased local demand to help Phoenix, which faced a massive collapse during the housing bust, rise like the phoenix of Greek mythology.
Median Phoenix asking prices have risen 23.6% over the past year to hit $209,500 — the sixth-highest percentage 12-month gain for any major U.S. city, according to Realtor.com.
The inventory of available Phoenix homes has also dropped 15.9%, as has the median number of days that Realtor.com’s listings for the area have been on the market.
All three of those metrics are usually signs of a rebounding market.
Fourth-warmest U.S. market: Los Angeles
Mean winter temperature: 58.2 degrees
Los Angeles listings posted on Realtor.com plummeted by 41.3% over the past year, while median asking prices rose 12.3%, to $359,900.
As noted previous, those are normally signs of a market rebound — but John Capiro of Re/Max Beach Cities Realty believes L.A. housing is actually improving about as slowly as a Hollywood star in rehab.
"The market really isn’t recovering," he says, adding that prices are only rising because of a freakishly low supply of available homes.
Capiro says few lenders are bothering to foreclose on L.A.’s legions of delinquent borrowers, so "underwater" homeowners (those who owe more on their mortgages than their properties are now worth) have little reason to sell.
"It’s a crazy market," he says. "I haven’t seen anything like this before in the 27 years that I’ve been practicing real estate."
Third-warmest U.S. market: Orlando, Fla.
Mean winter temperature: 62.1 degrees
Disney (DIS) World’s hometown has seen prices rise 12.8% over the past 12 months to hit $174,900, according to Realtor.com.
The number of available properties listed on the site also dropped 21.9% over the past year, while the typical listing’s age fell 12.3%,to 71 days compared with 108 days for the U.S. market as a whole.
Again, all three measures show that Orlando’s housing sector is rebounding. "Orlando is a resort area that continues to attract people not only from around the country, but from around the world," Barbar says.
Second-warmest U.S. market: Tampa, Fla.
Mean winter temperature: 62.4 degrees
Barbar says home prices in this Gulf of Mexico metro area are rebounding because it’s "a coastal market that’s very similar to Miami — a port city with declining housing inventories but a good supply of [local employers]."
Median Tampa asking prices have risen 5.3% on Realtor.com over the past year to hit $150,000, while the inventory of available properties has dropped 19.3%. The median listing’s age has likewise declined by 20%, to 88 days.
No. 1 warmest U.S. market: Miami
Mean winter temperature: 69.6 degrees
Once the poster child for South Florida’s housing bust, the Magic City is posting bigger rebound numbers these days than LeBron James and the Miami Heat.
Barbar says many homes are attracting competing offers from multiple buyers, "and we expect to see solid price appreciation not only this year but over the next three or four years. All of the signs are positive."
Realtor.com found that the median Miami property’s asking price has risen 7.3% over the past year to hit $285,000.
The number of available properties also fell 10.1%, while the typical listing’s age fell 22.3%, to 73 days.
This article was republished with permission from TheStreet.