Eight Hot Housing Markets That Are Cooling Down

Print Email

8. Bakersfield, Calif.
> Median home price: $174,900 (57th lowest)
> Quarter-over-quarter change: 1.7% (54th highest)
> Year-over-year change: 24.9% (14th highest)
> Median days in inventory: 51 (tied for 11th lowest)

Based on figures from June and July of this year, the Bakersfield Californian observed signs of cooling within the local housing market, which, until recently, had been a leader in the housing recovery. According to the Californian, rising mortgage rates and less activity by investors are contributing to the cool down. Between the beginning of 2012 and the start of this year, home prices were up more than 20%. Between the first and second quarters of this year, home prices climbed an additional 11%. Since then, however, the median list price has leveled off, increasing by only 1.7%. At the start of the year, demand for homes in the area was high, with half of all properties selling in fewer than 20 days, the fifth shortest time of all large housing markets. As of the third quarter, the time needed to finalize a home sale had risen to 51 days.

7. Tampa-St. Petersburg-Clearwater, Fla.
> Median home price: $164,000 (43rd lowest)
> Quarter-over-quarter change: 2.5% (33rd highest)
> Year-over-year change: 17.2% (19th highest)
> Median days in inventory: 81 (64th highest)

As of the first quarter of 2013, the Tampa-St. Petersburg-Clearwater area’s inventory was shrinking, with the number of homes on the market dropping nearly 20% from the year before. The number of homes for sale increased slightly in the second quarter, then jumped considerably in the third quarter, up from 16,459 to more than 18,000. Compared with the beginning of the year, when half of all homes in the area sold in less than a month, it took more than twice that long to finalize a sale in the third quarter. There are other signs that Tampa Bay is seeing a drop in home demand. SunTrust, a bank holding company, as well as J.P. Morgan Chase, recently announced layoffs in the region due to decreased demand for mortgages.

6. Sarasota-Bradenton, Fla.
> Median home price: $239,900 (40th highest)
> Quarter-over-quarter change: -2.1% (23rd lowest)
> Year-over-year change: 9.6% (48th highest)
> Median days in inventory: 91 (39th highest)

Between the beginning of 2012 and the start of this year, median home price in the Sarasota area rose by more than 30%, among the largest increases of any major metropolitan area. Prices continued to climb over the first half of the year, but by the end of the third quarter, the median list price actually dropped — from $245,000 in the second quarter to $239,900. According to the Florida Association of Realtors, about half of the foreclosed homes in the Sarasota area are not for sale because the previous owners are still living there. These homes can distort inventory numbers and drag down prices.

5. Lakeland-Winter Haven, Fla.
> Median home price: $139,000 (14th lowest)
> Quarter-over-quarter change: 3.0% (27th highest)
> Year-over-year change: 15.8% (24th highest)
> Median days in inventory: 92 (34th highest)

As of the first quarter of this year, home inventory in the Lakeland-Winter Haven area was down 84.8% from the year before — one of the biggest declines in the country. Since the end of the third quarter, however, the number of homes on the market has risen by more than 15%, suggesting a cool down in buyer demand. Further, the median time it took to finalize a home sale has nearly tripled — from about one month in the first quarter of this year to more than 90 days in the third quarter.