No. 5 – Ann Arbor, Mich. Known primarily as the home of the University of Michigan, this smaller market just missed the top 10 ranking last quarter. Ann Arbor scored in the top 20th percentile among 146 markets in three of the most critical areas: size of inventory, price gains and age of inventory. Together, these metrics almost entirely define a market’s turnaround potential. While an improving economy is part of the reason, a shrinking inventory of homes has put upward pressure on price.
No. 6 – Dallas, Texas. Another newcomer to the top 10 list, Dallas is one of those markets that did not rise much during the housing boom and did not fall very far either. Its path to recovery has not been very steep at all, and as a result Dallas has rebounded more easily than some markets.
Inventories rose in the third quarter of 2013 by 3.1 percent compared to the previous quarter, and down 15.72 percent year-over-year, as prices have risen, 10.6 percent over the third quarter of 2012. The seasonal inventory rise as the buying season ends could indeed have a dampening effect on prices.
No. 7 – West Palm Beach-Boca Raton, Fla. Even though they are two of the wealthiest resort areas in the country, West Palm Beach and Boca Raton have had their share of challenges during the housing crash, not to mention Florida’s struggles with foreclosures. However, the West Palm-Boca market has taken the critical first step toward recovery.
While year-on-year inventory fell 20.7 percent in the third quarter of 2013, inventory counts fell 13.3 percent from the previous quarter, a sign that sellers are responding to higher prices and soon inventories will register positive gains. More houses lagging on the market in the slower fall and winter seasons could bring prices quickly under control and see this MSA find its own equilibrium in pace with the rest of the country.
No. 8 – Boston-Worcester-Lawrence-Lowell-Brockton, Mass.-N.H. (MA). The greater Boston marketplace is a mainstay of the nation’s healthiest real estate economies. Like Dallas and Ann Arbor, it was less seriously hampered by the housing crash of recent years. With the median list price at $344,900 in the third quarter of 2013, Boston is also one of the wealthier markets in the nation. However, like many markets that suffered greatly at the hands of foreclosures, Boston has cut its inventory deeply in recent years, earning fourth place in terms of inventory reduction during the third quarter of 2013.