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Is There a National Real Estate Recovery?

This article is more than 10 years old.

Is American real estate in full recovery?  Or something closer to half recovery? New data compiled from multiple listing services across the country suggest it’s the latter. Though they get relatively little public attention, the stark fact is that more than half (75 out of 146) of the top metropolitan real estate markets surveyed by Realtor.com in its latest monthly study are not seeing anything like a recovery.

Their median list prices have either declined during the past 12 months or stayed flat, and their houses can take exceptionally long times to sell.  The number 75 is significant: It’s up from 69 just a month ago, so the lackluster performance phenomenon could be spreading, despite record low mortgage rates and modest growth in the overall national economy.

On the flip side of this sobering picture, of course, are the 71 major real estate markets that are seeing undeniable recoveries: fast rising prices, declining inventories of homes available for sale, and quick median turnaround times from listing to sale. Among the standouts in the price recovery category are:

--Sacramento, Calif., where median list prices in October were 31 percent higher than they were in October of 2011 and where houses sell in a median 32 days after listing, one third the national median of 97 days.

--Phoenix, where prices are up 26 percent year-over-year and houses sell in a median 47 days.

--San Francisco, where the October median price of $750,000 is 17.4 percent higher than 12 months earlier, and the median list-to-sale time span is just 44 days.

--Seattle (12.5 percent median list price increase, 53 median days to sell; )

--Washington D.C. metro (prices up 11 percent, 49 days from listing to sale;)

Add to these cities like Miami (prices up 11.6 percent), Las Vegas (prices up 12.4 percent) and Atlanta (prices up 13.1 percent) and you begin to get a sense of what it’s like in the fast lane of the recovery. Some of them have actually gone from price boom to price bust to boom again, all within the span of a decade.

Contrast these numbers with what’s going on in the less vigorous markets, some of them among the largest and most prominent cities in the country. Though Chicago’s 5.9 percent median list price decline is not the worst – that dubious distinction is held by Peoria, also in Illinois, where prices in October were 11.5 percent lower than the year before – but it is certainly the most populous and most economically significant city on the downgrade. Chicago houses now take a median 101 days to sell after listing.  Philadelphia is another in this category: prices down 2.2 percent, 105 days median time to sell, and the inventory of homes on the market up by 6.4 percent – never a good sign for future price movements.

Though areas with negative median prices are heavily concentrated in the central states -- where local economies have been struggling for years and may not have ever emerged from the recession -- a number are also in the northeast and along the Atlantic coast.  They include Hartford, Conn. (-1.4 percent), Newark, N.J. (-2.9 percent), Norfolk-Virginia Beach, Virginia (-5 percent), Myrtle Beach, S.C. (-3.1 percent), Harrisburg, Pa. (-3.4 percent), Charleston, W.V. (-9.7 percent) and Reading, Pa. (-7.8 percent).  Not all of them are concentrated in the eastern half of the country, however, witness regional outliers such as Salem, Ore., where prices are down 4.6 percent over the year.

The takeaway here: Not only is there no “national” real estate market, there’s also no “national” real estate recovery. And until local economies do what they have to do to support vibrant real estate markets – produce new employment, sustain net new household growth and resolve deep-rooted fiscal problems – there likely won’t be local real estate recoveries either.

Ken Harney writes a nationally syndicated column on housing and mortgage issues, the Nation’s Housing, and has won numerous “Best Column – All Media” awards from the National Association of Real Estate Editors, along with the Consumer Federation of America’s prestigious “Media Service Award,” for lifetime contributions to consumer interests in housing. He served a three year term on the Federal Reserve Board’s Consumer Advisory Council and is the author of two books on real estate and mortgage finance.