And there’s that pesky “F” word again. Although Esswein points out that Phoenix and Cape Coral were known for having high rates of foreclosures, she doesn’t think they are the make-or-break factor here. “I don’t necessarily think it’s the current rate of foreclosure that distinguishes the cities that are doing best, it’s more so the rate at which foreclosed properties are coming to the market and sold off,” she says. “The quicker you sell off those foreclosures, the quicker the market takes its hit. You suffer for awhile and then you recover.”
The cities in question saw a 28.4 percent boost in prices throughout last year, but the likelihood of sustaining that number is slim. “Once this bouncing from the bottom ends, we’ll see a much more modest rate of appreciation going forward. The intense price increases will level out for the national market as a whole,” says Esswein.
For 2013, Kiplinger predicts a modest year-over-year raise gain of about one-to-two percent, nationally. However, once the rebounding economy builds itself back and strengthens, that will also have a large impact both a local and national scale.