The U.S. real estate rebound has been particularly strong in these four cities
San Francisco The Bay Area is one of the most sizzling real estate markets in the U.S. The combination of low unemployment and tight supply is driving prices higher at a rapid pace: In June, the median home price in the nine counties in and around San Francisco jumped 6.9 per cent from the previous month alone, according to DataQuick, a real estate tracking firm in California. In the year through June, its figures showed, the median price in the Bay Area increased a whopping 33 per cent. In one anecdote that illustrates how space is at an increasing premium in San Francisco, a parking spot in a sought-after neighbourhood sold last month for $82,000.
Miami There is no shortage of indications that Miami, after tanking during the housing collapse, is back in business. In and around Miami Beach, there is a flowering of new buildings aimed at attracting the ultra-wealthy, including one featuring “sky garages” – parking spots just outside the entrance to your high-rise unit, accessible by a car-sized elevator. But it’s not just the luxury segment that is surging. Miami also has the advantage of drawing a considerable number of international buyers – whether from Latin America, Russia or Canada. “Miami has really stepped up to be the hottest city in the world,” said Stephen Ross, chairman of Related Cos., a major New York developer.
Las Vegas During the housing boom, Las Vegas more than lived up to its “Sin City” nickname – only the peccadilloes in question were rampant speculation, loose lending and enthusiastic overbuilding. For most, the gamble paid off poorly: S&P/Case-Shiller figures show that home prices plunged 62 per cent between 2006 and 2012. Now the city’s battered real estate market has returned to life in dramatic fashion. The median price of a single-family home jumped 32 per cent in the twelve months through May, according to statistics from the Greater Las Vegas Association of Realtors. Investment buyers purchasing distressed properties in all-cash deals have played a major role in the upswing. So, too, it seems, has a state law passed in 2011 in response to shoddy foreclosure practices by banks. The law instituted strict new rules on the process, contributing to a tighter supply of housing inventory.
Phoenix Phoenix, once an emblem of the housing bust, is experiencing annual price increases in the double-digits: The median price of a single-family home jumped 26 per cent in the year through May, according to Michael Orr, who heads the Center for Real Estate Theory and Practice at Arizona State University. What is happening now in the city is the flip side of what occurred during the boom, Mr. Orr wrote in a recent report: Rather than free-flowing credit and unchecked construction, there is a combination of “very tight lending standards and an extended period of severe underbuilding” – producing a shortage in supply. Meanwhile, the flood of foreclosures that swamped the city finally appears to be ebbing. In May, foreclosures dropped 67 per cent from a year earlier, hitting a level that might best be described as “normal,” Mr. Orr noted.