Florida leads list of 'turnaround towns'

Has the tide turned in these foreclosure hot spots? Or are low inventory and a slow foreclosure process masking price drops still to come?

By Teresa at MSN Real Estate Jan 31, 2012 3:03PM

© Gustavo's photos/Getty ImagesAll eyes are on Florida these days, and it's not just because of Newt and Mitt.

 

Florida dominates Realtor.com's list of the "Top 10 Turnaround Towns," with Florida cities taking eight of the 10 spots on the list for the fourth quarter of 2011. Once again, Miami ranks first, as it did the third quarter.

 

Second on the list is Phoenix, which — like Miami — saw property values experience a sharp runup and then a deep plunge. Foreclosures are high in Phoenix, but so is investor interest. The only other non-Florida city on the list is Boise, Idaho.

 

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We're going to guess reduction in inventory propelled many of the Florida cities to the top. But does that mean that the situation in Florida (and Phoenix) has truly turned around?

"The inventory levels are really declining,"’ Lynda Fernandez, spokeswoman for the Miami Association of Realtors, told The Miami Herald this week. "Optimism has been building. Now there is a lot of excitement because we see the market recovering faster and stronger than we expected."

Realtor.com rank cities based on year-over-year median price appreciation, reduction in age of inventory, reduction in total inventory and lower unemployment from a year ago.

 

If you're talking real estate in Miami, you'd think we were back in the boom days. I've seen at least two real-estate listings in the past week for homes priced way above their market value, with the note that the owner was accepting only cash offers — to avoid problems with appraisals that would come in much lower.

Inventory is so low in some popular neighborhoods that good properties routinely draw multiple offers. Investors with all cash are a big part of the market, but we haven't heard any reports that they are willing to pay twice market value for anything.

The shortage of homes for sale and the competition for good properties extend to other Florida markets — though prices in Tampa, which was not on the turnaround list, hit a new low in the latest Case-Shiller report.

 

"Two of my buyers made offers last week. One made an offer on a $90,000 small home as an investment. The other made an offer on a rather large $250,000 home as his primary residence. Both homes were short sales and had five other offers on them," Orlando real-estate agent David W. Welch told Realtor.com.  "We actually have a shortage of homes on everything under $300,000."

Is the housing crisis over in Florida?

 

With the large number of homeowners still underwater on their mortgage and the unemployment rate still high, maybe not. The big question (see my previous post) is how many homes are still waiting in the foreclosure pipeline. Florida requires foreclosure cases to go through the courts, and the cases were significantly slowed by the robo-signing scandal – one reason for the decline in inventory. With the average foreclosure in Florida taking more than two years, many more are likely still to come.

 

Moody's predicts that South Florida's home prices will drop an additional 12% this year and 4% more in 2013, hitting 2001 levels.

 

"I think we still have a ways to go,"’ real-estate analyst Jack McCabe told The Miami Herald. "This is not going to be a year of stabilization. It’s going to be sometime in 2013, but not before."


Here, in order, are Realtor.com's Top 10 Turnaround Towns:

  • Miami
  • Phoenix
  • Orlando, Fla.
  • Fort Myers-Cape Coral, Fla.
  • Sarasota-Bradenton, Fla.
  • Boise, Idaho
  • Naples, Fla.
  • Fort Lauderdale, Fla.
  • Lakeland-Winter Haven, Fla.
  • Punta Gorda, Fla.

What do you think? Is the real-estate crisis over in these towns? Or would the situation look a lot different if you were using other types of data?

 

 
16Comments
Jan 16, 2013 6:47PM
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The USA will soon be owned by foreigners. 

Jun 7, 2012 4:28PM
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All of a sudden in the WFlist of propertieds that I get have "Under contract","offer accepted" started appearing on alomost all properties and on properties that are NOT Prices by the bank.Who're these people who  buy even without knowing? I thought congress had passed the law that Outsiders can buy property and get Permanant Resodence status but can NOT work.Is that why properties being sold?

Truly I've been in Refi since almost 1 year but have tough time to borrow 60% of my home equity at decent rate and I'm working with the same company for 10+ years.Wonder!!!!!

Feb 9, 2012 12:09PM
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Figures don't lie, but liars can figure.
Feb 9, 2012 8:36AM
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i spoke to a condo buyer in so florida a couple months ago. he was from Luxemburg. the majority of homes selling in fla are being bought by europeans and so americans....fyi. lending in this country has not changed. it went from the sublime=lending to anyone with a pulse to the ridiculous=not lending to qualified buyers. NO ONE should be able to finance unless they have 20% down. so, americans collectively still cannot buy mortgages. mostly foreign buyers have improved the market in fla.
Feb 9, 2012 8:28AM
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I think these type articles are simply propoganda to try and pretend the economy/housing is in better shape than it truly is!  Yes, some people do have the extra money to get "steals", but generally, things are NOT better and most people with mediocre to higher means are holding on to their money!
Feb 9, 2012 5:35AM
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Let's consider this, as stated, the foreclosure rate has been delayed by a couple of years on many properties.  This factor means that in the next couple of years the market will continue to flood the florida market, so home and condo prices will remain relatively low or stay at common ground.  The economy is not better and will take a long time before we crawl out of this economic condition.  Please don't assume that because the markets go up that we are stable.  They will continue to fluctuate over the next several years, and most increases/decreases are only influenced by speculation, not real value. Real value, such as company strength, sales, and low unemployment will take many years to rebound.  So, don't play into the notion that things are all good.  Now, I'm an investor in real estate in Florida, so I like the conditions because I can make money with smaller investment dollars.  I would advise other investors to still invest, but don't expect home value/prices to increase dramatically over the next couple of years.  You can, however, make good money on return.  Everyone still wants to retire and vacation in Florida!
Feb 9, 2012 5:10AM
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Sure- property is cheap enough in FL- try getting a reasonable homeowner's insurance policy! Could be why all the inexpensive homes are being sold. You can afford the payments, but not the "extras" required if carrying a mortgage!
Feb 9, 2012 4:45AM
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Things are changing in Ft. Lauderdale but the crisis is not over. I have been making foreclosure offers for investors and finding that there are 10-15 offers on each property. The bidding war is intense for cheap condos. Meanwhile, my next door neighbors dropped their asking price for a golf course home by $50,000. I bought my home in January of 2000 for 290K and zillow says it is now worth 350K. I know I'm lucky since I bought before the crazy appreciation but I really feel for all the people who bought at the wrong time. The homes are not really selling right now. Investors are going CRAZY!
Feb 9, 2012 4:17AM
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Just last week, I had my home appraised in the FL panhandle. 43% of what I paid for it 7 years ago. I would say those odds hardly qualify as the crisis being over. This slanted press trying to alter the realities of this economy has got to stop!!! No creditability on this site.

Feb 9, 2012 4:16AM
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Follow the money trail.  I bet the same people who use MSN articles for a reliable indicator of market conditions are the same ones who bought a house in the last few years and took a nice little spanking.  You all need to understand that realtor.com is owned by the National Association of Realtors, one of our largest campaign finance contributors (to both the corrupt dems and repubs) in the USA.  Follow the money trail and use simple logic: the NAR wants you to buy a house because they make money no matter what and they set the policies through a corrupt system.  

And MSN is hardly innocent of publishing articles for its sponsors and contributors.  Do your own due dilligence (especially in real estate) and see if the market is really turning around in your location or if somebody is trying to sell you a load of crap.

Feb 9, 2012 3:44AM
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In Orlando, the good neighborhoods are pretty much sold out, as stated in the article. If you have to sell at the high price you bought, though, don't do it yet. People still aren't going to pay for your mistakes.

Sarasota has always had a high owner vacancy rate. It is the winter home of very old Northerners. They are only here but a half year, enough to establish their tax free residency and get out of the cold, then its back to their "real" homes. I'm surprised its only at 32% vacancy!

Feb 9, 2012 3:36AM
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This just happened in my South Florida town, too.  Suddenly and recently every reasonably priced home in my neighborhood has come under agreement, leaving not a single active listing under $245,000.  Since Moody's predicts that South Florida's home prices will drop 12% this year, I'm wondering what they're basing it on.
Feb 9, 2012 12:59AM
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The condo vacancy rate in the Sarasota/Venice area is 32%.  How is that a "turnaround" ?  It's not.  But since they are owned by someone (not on the market for sale) they don't get counted.  Boomers aren't moving to Florida and retirees who did go there are leaving.  That's the dirty little secret of the place. 
Feb 7, 2012 7:29AM
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As a person who has been in the business a long time, these stats are not truly accurate. Inventory is higher than ever...and let's not forget the shadow market, the units being kept off the inventory so as not to adversely affect market comparables. You can make numbers prove anything you wish; however, unless you are paying cash, even the bankis don't want to extend financing...they do know something that we don't...the real estate market has not bottomed yet!!!
Feb 7, 2012 5:44AM
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I live in Lakeland, Fl and I purchased a home in 2004 for $300k; before the housing bubble.  I've been thinking about selling and had a few realtors come to give me an idea of what I could expect to list it for and the best estimate came in at $250k.  I would hardly consider  a $50k loss as indicative of the crisis being over.  We have a long way to go.
Feb 7, 2012 4:06AM
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