The Hottest and Coldest Real Estate Markets

Posted by: Chris Palmeri on July 22, 2009

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The online real estate agency ZipRealty.com has just come out with its list of the hottest and coldest real estate markets, based on whether homes are selling for above or below the asking prices.

For the most part the “hottest” markets aren’t the posh zip codes of Beverly Hills or Greenwich. Most are markets where banks are dumping foreclosed homes and bidding wars have sprouted up.

Topping the list of hottest markets is the Phoenix suburb Youngtown, where homes sold at an average of 111% of list price in the second quarter. The picture is of a four bedroom, 2,200 square foot bank-owned McMansion in Youngtown. It’s got a formal living and dining room, a powder room, a large master bed and bath downstairs, a “desired location close to schools, local freeways and professional football stadium.” It’s listed for $107,000. You can get everything a young family needs in Youngtown, except trees apparently.

Following it on the list of hottest markets: San Pedro, Calif (sale price as a percentage of asking price: 109%), New Haven, Conn. (107%), Oakland (105%) and Encanto, Calif. (103%), a San Diego suburb. Not the fanciest post marks.

And where are home sales coldest according to Zip? Again, not where you would expect. Atlanta (sales are at 81% of list price), Naples (81%), St. Petersburg (81%), Weston, Fla. (80%) and Eloy, Az. (80%). Number six on the cold list is a fairly posh place, Boca Raton (80%).

“As housing inventory shrinks dramatically across many California markets, we’re actually seeing bidding wars again in some places,” said Leslie Tyler, vice president and chief home hunter for ZipRealty. “In markets like Southern Florida that still show relatively high inventory levels, banks and sellers are accepting offers well below asking price to move homes off their books.”

Reader Comments

Joss McDaid

July 22, 2009 1:04 PM

Sacramento California - for the past three months our inventory has constricted severely, creating a hyper-competition buying market for any property under $250K. The property I was just able to put into escrow had 11 offers. . .my client offered $13K over the list price, and had to increase another $5K to lock-up the contract.

We (informed agents) are calling it a false bottom, as the constriction of inventory has been manipulated. . .we believe there is an inevitable release of REO property coming on the market within the next 60 days, which may continue to push prices further under the "affordability point".

Only the strong minded and determined Buyer can handle the amount of rejection before finally getting into contract. . .I must take a mental assessment of my Buyer during our first meeting to determine if they will be able to battle the market and win.

Keep up the good fight!

Mark

July 22, 2009 6:20 PM

Based on my research Buckeye, Arizona is one of the best area to bounce high as far as home prices. Many reasons and fundamentals support Buckeye could hit againg in the category of the fastest growth community nationawide. Like the stock market, when securities are discount, demand increases creating a volumen accumulation of peers and buyers. Once the momentum starts, it will keep rising. Breaking levels of news, data, unemployment, etc.

Randy

July 22, 2009 11:51 PM

Joss:

If you know that the amount of inventory has been constricted thru manipulation, did you reveal this to your client? If not, you are just another part of this housing meltdown problem!!

DeP

July 24, 2009 11:54 AM

The problem with the manipulation is that its not going to stop. Everyone thinks the foreclosures will come forth in a tsunami, often in the "next 60-90 days".

Sorry, but its been 60-90 days away for over a year now (in some places theve been saying this for 2 years). There is no tsunami coming.

Fact of the matter is, banks will continue to do now what theve been doing for a year, dribble out foreclosures slowly thereby not take the hit all at once which would make them insolvent.

By doing this for the last year, they have successfully created competition and pushed prices off the bottom. They will continue to do this for 1 - 2 - 10 years if necessary - its the only way they can survive.

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About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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