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Turnaround Towns Take Q1 Home Prices Up

The Phoenix-Mesa area led 146 metropolitan markets surveyed with a 24 percent increase in home prices year-over-year for the first three months of 2012, improving from the No. 2 rank in the 4th quarter of 2011.

Real estate markets throughout the U.S. continued to stabilize in the first quarter, as half of the metropolitan areas surveyed by the National Association of Realtors showed an increase in home prices.

The NAR report released Monday by Move Inc. listed home price increases in 74 out of 146 metropolitan areas, led largely by markets hit hardest by foreclosures during the housing crisis. Only 29 areas showed gains in the fourth quarter of 2011. The Phoenix-Mesa market leads the Top Turnaround Towns report with a 27 percent price increase since the first quarter of 2011, as well as a 48 percent drop in inventory levels. Phoenix also holds the lowest unemployment rate of the top 10 areas ranked, and is third-lowest in that category overall.

Two Florida markets were close behind the leader: Miami ranked second with a 24.3 percent year-over-year home price increase and a 48 percent decline in inventory, and Orlando followed with a 11.5 percent price increase and a 41.6 percent drop in available housing inventory. Seven of the 25 markets ranked are in Florida.

"We have broad shortages of lower-priced homes in much of the country, with very tight supply in Western states for homes through the middle price ranges," NAR Chief Economist Lawrence Yun said in the report. Prices are more volatile than normal because they are affected by the prevalence of distressed sales and "sudden upswings" of buyer interest in some areas.

Oakland and San Jose, Calif., ranked sixth and 24th respectively, were boosted by the continued growth of technology companies in the Bay area. Detroit ranked 23rd with a 5.8 percent increase in home prices and a 29.6 percent decrease in for-sale inventory. The turnaround is welcome news, given the city's 10.2 percent unemployment rate and foreclosure rates in the larger Detroit area at 50 to 100 percent above the national average.

Previously owned home sales rose 5.3 percent in the first quarter year-over-year, according to the report. Purchases climbed 11.7 percent in the Midwest, 6.6 percent in the Northeast, 4.1 percent in the South, and 1.4 percent in the West.

At the end of March, 2.37 million previously owned homes were available for sale, 22 percent less than a year earlier, the NAR report said.

Click here to view the full report.

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December 8, 2019, 7:43 am PDT

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