Markets With Largest Price Jumps May be Most at Risk

July 11, 2012 | Comments Off on Markets With Largest Price Jumps May be Most at Risk

For-sale homes nationwide are posting increases in asking prices, but in markets posting some of the largest gains those increases may be temporary due to foreclosure backlogs, a new report from Trulia warns. 

Markets like Phoenix, Miami, and Detroit have had some of the largest price increases lately. But these markets also have clogged foreclosure pipelines that could threaten price appreciation and lead to a decline in the coming months.

“The huge price gains we’ve seen in Miami and Phoenix are not built to last,” says Jed Kolko, Trulia’s chief economist. “These increases will shrink or reverse as the backlogged foreclosures in these metros hit the market.” 

However, other markets — notably Denver, Pittsburgh, San Jose, and Austin — have also seen gains in price appreciation, but without the foreclosure overhang, those price gains are at less risk, Kolko notes. 

Seven of the 10 markets posting the largest price gains likely will see the appreciation as temporary until the foreclosure backlogs are behind them, according to the report. According to Trulia, the metros with the largest price gains are: 

  1. Phoenix: 18.9% increase in asking prices from June 2011 to June 2012
  2. Miami: 16.1%
  3. Cape Coral-Fort Myers, Fla.: 14.9%
  4. West Palm Beach, Fla.: 9.6%
  5. Denver: 7.2%
  6. Orlando, Fla.: 6.8%
  7. Warren-Troy-Farmington Hills, Mich.: 6.5%
  8. San Jose, Calif.: 6.2%
  9. Detroit: 5.2%
  10. Pittsburgh: 5.1%

Source: “Home Price Gains at Risk in Distressed Markets,” Inman News (July 10, 2012)


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