by Alyssa Oursler | October 3, 2012 12:25 pm
In the housing market, the only thing that seems to be certain these days is uncertainty.
Conditions improved over the last quarter, but the industry still faces several big-picture problems. So, as InvestorPlace contributor Ethan Roberts recently put it: “We are either at the beginning of a new uptrend, or we have just been pulled into one great head fake before prices come crashing down again.”
But while the housing market overall direction is unclear, it is pretty clear where in the country housing is doing well (and not-so-well). Five statistics — total inventory, median list price, percent of distressed sales, median days on market and median price per square foot — paint a pretty clear picture.
So, using data provided by Movoto Real Estate — a real estate database and licensed brokerage in 30 states that connects prospective home buyers with accurate listings, top-rated agents and photo galleries — we tallied up the best and worst cities by those five standards:
Total inventory is the number of homes available for sale at the end of each month for existing and new homes — a very good indicator of housing demand. Thus, its movement can give good insight into the health of a housing market.
Best: Lousiville, Ky.
The lowest inventory for the month of September was again in Louisville. The number fell from 83 homes on the market at the beginning of the month to 79 at the end of the month — significantly lower than the average inventory of more than 3,000.
So few homes hitting the market is good news because it means those up for sale are in high demand — which is also evident by the city’s above-average median list price.
The bottom of this list didn’t budge month-over-month either: The last-place slot still goes to The Windy City. Total inventory was more than 10,200 homes in August. The good news is that the total fell by around 300 homes for the past two months.
The bad news, of course, is that the five-digit total is still more than three times the average for all cities. Such an oversupply is part of the reason the median list price for the city is still wallowing well-below average.
The median list price is pretty self-explanatory: It’s the middle price of listed properties. To put it simply, it’s the price at which half of list prices are of lower value and half are of higher value.
Best: San Francisco
Again, not much changed in the past month. San Francisco held onto its lead as the area with the most expensive median list price: $849,000.
That number was up around $30,000 from last month, despite the fact that inventory also jumped around 40% during that time. Still, even with such an increase in inventory, the city’s number is still far below the average.
The other extreme is (no surprise here) Detroit, which has a median list price of $13,500.
The good news is that last month, the price was actually $500 lower. The bad news is that … well … even with that rise, such a median price is anything but pretty.
If you think about the city’s struggles with the auto industry, and the fact its metro area was also the cheapest market for all of Q1, this news is far from surprising.
This statistic measures the percentage of homes sales that take place under some circumstances placing urgency on the seller. Some scenarios include impending foreclosure, divorce or relocation. Any sale taking place with such urgency could be short, discounted or even at a loss.
Best: Nashville, Tenn.; Fort Worth and Houston, Texas; San Francisco
Head down South, and distressed sales haven’t been much of an issue at all. Nashville, Fort Worth and Houston remained part of the “1%” — cities that only had 1% of sales take place under distressed conditions — and San Francisco also joined the ranks, dropping from 3% last month.
While Long Beach, Calif., was the worst city last month, it improved some, leaving the No. 1 spot to Detroit’s 16% — the same figure it had a month ago.
On top of that, banks are also sitting on a large number of distressed properties. When those go on the market, prices could be driven down significantly.
Median days on the market, quite simply, is how long a property has been listed. A lot of lingering houses is a red flag, of course, while it’s generally a good sign if houses are quickly hopping off the market.
Best: San Francisco
Again, The City by the Bay is a good place to be. In San Francisco, houses sat on the market for a median time of only 20 days in September — which means half were sold even faster than that. That impressive number was three times faster than the average.
In August, Detroit’s woes were evident in this statistic as well. In September, though, Memphis took Detroit’s place with an average number of 97 days — just over three months. That’s still much better than Motown’s performance in August, though, when the median sat in triple digits.
The median price per square foot is meant to level the playing field for price comparisons. Sometimes, homes cost more because simply because they’re bigger. So, by looking at the price per square foot, you will in theory get a more accurate comparison of various markets.
While the average median price per square foot for the cities provided came to just under $170 for the month, Boston blew that standard away. Its median price per square foot more than doubled that with a tag of $358 — and that was after a drop from its August number.
Leveling the playing field wasn’t enough for Detroit. The city is still stuck in dead last — again giving it the unwanted title of “worst” for three of the five categories (although not the same three categories as a month ago). In September, homes on the market were again listed at only $12 per square foot — a meager 7% of the average for all cities.
Source URL: http://investorplace.com/2012/10/best-and-worst-housing-markets-in-september/
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