NEW YORK (MainStreet) Where to buy right now? The answer is not what the blaring good news headlines of the past six months would have you believe. A housing rebound is in full swing but it is very uneven, with some towns on a rollercoaster ride to ever higher prices and many other cities seemingly stuck in neutral, with slim price bumps to show for the past year.
The other fact: parse the numbers and they clearly point to five towns that belong on any house shopper's list.
First, however, know this: many house markets are slowing as three factors come into play. Recent price jumps may mean bargains are fewer and so are buyers. In most cities, the inventory of foreclosed homes has dwindled, and the thinking is that there won't be a fresh dump of foreclosures anytime soon. Factor three: mortgage interest rates are edging up. 30-year fixed rate loans are going out on average around 4.5%, and that is up from 3.31% in November.
So contracts to buy previously owned homes actually fell 1.3% last month, according to the National Association of Realtors. Mortgage loan applications have tumbled 14% since May, according to the Mortgage Bankers Association.
Does this mean it's no longer a good time to buy? Absolutely not. In the right cities it may be an even better time to buy, because the herd has thinned.
You want names? Read on.
Las Vegas: It tops just about every list of rebounding home markets. Realty number-crunchers Case Shiller peg the year-on-year uptick at 24.9%.
Online real estate brokerage Redfin's numbers show a 39.1% year on year gain and an average home sales price of $175,000.
One of the hardest hit real estate markets, Las Vegas still finds its prices a way off from the highs. Dave Tina, president of the Greater Las Vegas Association of Realtors, pegged the 2005 to 2007 price of that $175,000 home at $315,000, in an interview with the Las Vegas Review Journal.
Do the math. Bargains are continuing to fuel this real estate market, as an improving global economy sends ever more visitors to the town to spend on gambling, hotels, fine dining and shopping. In Las Vegas, it really just looks like a can't-lose gamble for home buyers.
San Francisco: Forget the flowers in your hair. Show up in this town with dollars in your pocket, because, right now, this may be the nation's most sizzling real estate market with buyers stoked on social media and technology paychecks.
Redfin shows an average San Francisco home sale price of $715,000, and that is up 27.3% year on year. Even so, RealtyTrac says that 24% of the home sales in the San Francisco-Oakland metroplex are for cash.
Bidding wars - unheard of in most housing markets - are becoming matter of fact in San Francisco.
How high can this go? Experts point to the Facebook, Apple and Google market caps, which just keep surging. As long as they go up, so will housing in Babylon by the Bay.
Phoenix: Another Sand Belt casualty of the housing meltdown, prices in Phoenix plummeted from a 2006 median of $275,000. In 2011 that median was $122,500, according to the Arizona Republic's Valley Home Values Report. Today that number is north of $175,000 and it keeps climbing.
Redfin reports year on year growth of 26.2% in Phoenix which, incidentally, is the nation's sixth biggest city and, said experts, its diverse economy based on tourism, real estate, and increasingly also IT prepares it for a sustained rebound.
Rochester, NY: This upstate city - 335 miles north of New York City, near Lake Ontario and known as "The World's Image Center" because of hometown heavyweight Kodak-- tops the RealtyTrac rankings of rebounding cities.
The one grumble may be skepticism that there is any lift left in the local housing prices -- which now are at 93% of peak - but local boosters point what they claim is a very high quality of life as fuel for continued growth.
One fact: local prices are still very low compared to many other New York cities. Number crunching by HomeInsight pegs the median price at $94.074. The median in New York City is $380,062. The median in Albany, NY is $126,324.
That alone may make Rochester worth a look by bargain hunters.
Detroit. Forget the bankruptcy, this town may be primed for renewal. The median home sale price in Detroit was $13,556 in July 2013 and, yes, that's a price you may be able to put on a credit card.
That price is sharply up from $10,200 a year ago, according to numbers provided by REALCOMP, a multiple listing service.
Numbers from real estate data crunchers Case Shiller show a 16.4% year on year gain in Detroit.
Nobody expects further declines, because the bankruptcy permits a fresh deal that may let the city get its footing back.
House prices, meanwhile, are perhaps the lowest for a major metro. Search the inventory of HUD foreclosed homes, and dozens of government owned homes pop up with prices as low as $1,640 for a 721 sq-ft rancher built in 1941.
Once known as "the Paris of the West," Detroit unquestionably has a long and rough road to recovery ahead of it. But for gritty urban dwellers who want in on what may be the nation's grandest experiment in renewal, this is ground zero, and the entry fees are paltry.
Where not to buy - Baltimore: Charm City pulls up the rear in the RealtyTrac recovery forecast.
"Although home prices have risen 9% from the bottom in Baltimore, that is short of the 19% increase nationally," Case Shiller said. "Similarly, foreclosure activity was down 26% from its peak in Baltimore, but that decrease is well below the 65% decrease nationally."
--Written by Robert McGarvey for MainStreet