What do Honolulu and West Palm Beach have in common besides being warm, beautiful vacation spots? They made it to the top of RealtyPin’s 2012 most surprising real estate markets—for reasons that could not be more different.
Lenders pay close attention to increased home values and area sales, and Honolulu leads the pack as “a magnet for sales,” most of which have been driven by international buyers.
It has been attracting Asian buyers, followed by Canadians who represent a large number of Honolulu's buyers this year, says James Paffrath, co-CEO of RealtyPin.com, a New York-based provider of listings and customized real estate market data analytics for homebuyers and sellers.
The Honolulu news may come as a surprise to lenders because data about the current strength of this local market during the crisis were mostly overshadowed by foreclosure problems elsewhere in the country.
In fact, RealtyPin.com reports, the number of Honolulu foreclosures in the first half of 2012 was 49% lower than what it was in the first half of 2011. Apparently this was not lost to these international buyers who saw the benefits of a market with very low foreclosure rates.
By contrast, data from West Palm Beach, another sunny place with warm temperatures and sandy white beaches, are among the most unpleasant surprises in real estate for 2012, according to RealtyPin.
While the number of local home sales was up in July, the median sales price dropped 15% compared to the previous month, down to $217,500. In addition, the West Palm Beach foreclosure rate during the same month was one out of every 349 houses.
Another real estate surprise came from Minneapolis/St. Paul where home builders are excited about the future of the Twin Cities “as evidenced by the number of building permits that have been approved lately,” Paffrath noted.
In March the number of permits was at 400, but by June it increased to 766 and by July jumped to almost 1,100. Even better news for homeowners and lenders in the area, according to the FHFA Home Price Index, was that home values have increased by nearly 6% since the start of 2012.
The fourth biggest real estate surprise of the year according to RealtyPin.com is Austin, Texas, which during the past few years has turned into a preferred destination for new startups and business expansions, including among others, a new home for Facebook.
While following a trend, “2012 has been even better than expected,” the data provider notes.
For example, by July the year-over-year median sales price increased by more than 4%. Plus, the amount of time it takes to sell a home “is getting smaller and smaller.” And as shown by the latest statistics, homes priced at less than $200,000 will likely take less than three months to sell.
These buyer advantages however do not benefit renters. On the contrary, rents have skyrocketed, executives said.
The other market that made the top five most surprising real estate markets is Richmond, Va., which has differentiated itself from the very high foreclosure rate markets across Virginia to see recent gains, according to local experts.
Pending sales went up 20% in July and the median asking price is up close to $210,000, Paffrath said, but there is a problem: that price is what Richmond sellers were getting in the mid-1990s.
So while “it is nice to see that people are getting more excited about real estate in Richmond,” he argues, “when you look at the numbers, their enthusiasm is a little surprising.”