Top Turnaround Towns
Prices are changing quickly in markets you wouldn’t expect as the dynamics of supply and demand, sparked by investors, play out. Here are some of the top turnaround towns based on remarkable data made available to the public for the first time last year.Realtor.com, the huge homes-for-sale site, contains anywhere from 2 to 5 million listings at any given time, depending on the state of the real estate industry and the time of year.
Over the past year, Move, Inc. the company that operates Realtor.com, has been organizing and analyzing data from Realtor.com, and the results have been fascinating. As a consultant, I’ve been involved in the project and have had a birds-eye view of its progress and findings.Realtor.com’s data, derived from its listings, has several pluses. The most important is its freshness. Most of the site’s listings are refreshed directly from MLSs every 15 minutes and you can get transactional data like inventories and list prices virtually in real time. Unlike most real estate data reports, Realtor.com’s data is not a survey of a representative but limited sample. Its reports are based on every listing in every market in the nation from more than 900 MLSs. Realtor.com’s, http://www.realtor.com, prices are list or “ask” prices, which differ from contract prices (pending sales) and sale prices and reflect median prices of what sellers are asking.
Finally, its time in inventory is an ideal measure of the actual lifespan of all listings in market.Late last spring we started to notice that several markets that have been ravaged by foreclosures and have lost 40 percent or more of the pre-bust equity were acting strangely. First inventories shrank as sellers waited for prices to improve and the flow of foreclosures turned into a trickle as lenders slowed processing in the wake of the Robosigning scandal. Then time in inventory fell like a stone, indicating that demand was picking up as investors sniffed out bargains. Finally median list prices rose as sellers responded to rising sale prices and owners/occupant buyers followed, their confidence in the market buoyed by the price turnaround, . Other economists have noted the same phenomenon (See Can Home Values and Foreclosures Live Happily Ever After? Our observation inspired a quarterly ranking of all 146 markets based on a formula of year-over-year median list price appreciation, declining time in inventory, declining inventory, unemployment rates, and search activity. The top markets were dubbed the Top Ten Turnaround Towns.