25 Markets to Watch

By Camilla McLaughlin

Like everyone else, including the White House, we’ve been keenly watching indices that measure changes in home prices and sales this year. We’re taking a cue from these charts, mixing some of the largest metros in the country with traditional luxury hot spots to compile our annual list of Markets to Watch. Rather than highlighting the best and the worst, this year we paint a picture of real estate in the U.S. and internationally, using snapshots of 25 key markets that many will be keeping an eye on throughout 2010.

Chicago Atlanta — Solid month-to-month gains improve prices here. Still 2009 is off 10 percent compared to 2008. Good values can be found in condos, particularly along Peachtree Road. An influx of new residents bodes well for future demand, as do young professionals and empty nesters moving closer to urban hubs.

Austin — One of the best bets to come through the recession unscathed and a perennial on “best of” lists. Prices are up over 2008 and a diverse local economy places this city solidly out of recession territory.

Beverly Hills/Bel Air — Inventories are stable in these two locales that symbolize luxury for the entire world. Prices remain steady if not on the rise. The value of the dollar has brought an influx of foreign buyers. Bargain hunters might be disappointed since many sellers can sit tight.

Boston — In Red Sox country, real estate has turned a corner. Sales picked up beginning spring 2009. Price increases are small, but gaining momentum, and Moody’s has Cambridge and the western suburbs in recovering territory.

Chicago — Fall brought a new energy to real estate here. Buyers are coming off the sidelines. Well-priced properties are selling, sometimes at full price. The best even receive multiple bids. An oversupply of condos translates into buying opportunities.

Dallas — Receiving top marks in Brookings Institute’s Metro Monitor, the Big D is a perennial on top market rankings. Still, developers and the city have scaled down ambitious plans. Prices are holding their own. Biggest constraint on sales is relocating buyers with homes to sell elsewhere.

Denver — The mile-high city is working hard to enhance the city center. The city is also getting a boost from the green companies locating there. The housing market is still struggling. Prices in 2009 have crept up to August 2008 levels but still haven’t perked through all the price brackets.

Fairfield, Conn. — The outlook is positive for these leafy Manhattan bedroom communities. Local agents say the worst might be behind them. Strong sales in late summer and fall combined with the rebound on Wall Street have local agents thinking the worst might be behind them.Hong Kong

Hong Kong — Luxury prices here soared this year, up 28 percent in the first nine months. An October sale of a 6,158-square-foot duplex for $56.6 million set a record price per square foot. Bubble worries are beginning to float to the surface here.

Lake Tahoe — Single-family sales are up 12 percent in 2009 in Tahoe, and 35 percent in Reno over 2008. Price declines in 2009 of an additional 18 percent in Tahoe and 28 percent in Reno/Sparks translate into almost the best buying opportunities of the century. Best positive sign for 2010 is lower inventories.

London — A sharp rebound means price gains in what is one of the strongest luxury markets globally. The news going into fall was a scarcity of prime luxury properties.

Miami — Upscale properties that are well priced in premium locations are winners in one of the hardest hit metros in the country. Sales of homes priced $1 million or more rose to 179 in September, a 13.3 percent increase over August. International buyers are back in South Florida and Miami should benefit.

Minneapolis — This city is one of the stars in terms of price appreciation. Prices here have been growing at 3 percent or more. A diverse economy will bolster the road back.

Naples — Although luxury sales are off compared to 2008, all other indicators are positive. Overall pending sales in October were 1,014 compared to 570 in October 2008. Inquiries to local real estate agents have tripled over 2008.

New York — Not as hard hit as expected, Manhattan seems to be on the rebound. Strong sales in the Hamptons are good testimony to the city’s strength. The Big Apple’s international luster shines brighter than ever.

Newport Beach, Calif. — A huge upswing in sales in September and increasing prices are a good sign that maybe this market has passed the bottom. Prime locations still reign as top performers in what is one of the most expensive areas of the country.

Portland, Ore. — Luxury home sales are close to par with last year with properties in the $750,000-and-up range accounting for 2.1 percent of total sales, compared to 2.5 percent in September 2008. Prices have been on a slow rise this year but are still off by 12.5 percent compared to 2008. The recession has been hard to shake off here.

San Diego — Location is important to the strength of a market and San Diego has all the pluses. Real estate seems to be on the upswing. Year-to-year prices are still off, but showing signs of gradual improvement.

San FranciscoSan Francisco — Sales in the high-end really started to bounce back this summer. Buyers looking for absolute value are willing to pay a premium for the best of the market. Like everywhere, “money is getting smarter here.” On most charts, San Francisco gets high marks.

Seattle — Sales have improved over 2008 with modest increases in prices. Luxury home sales still struggle, offering great opportunities for buyers. The region is still feeling aftershocks from bank woes and businesses trimming back.

Singapore — Ranked as one of the most expensive cities outside the U.S., Singapore had its share of price adjustments during the downturn. But, like most of Asia, demand is back here and so is appreciation. Prices for private homes were up 15.8 percent in the third quarter over the second.

Tampa — A long slow climb back is underway here. Finding favor with buyers are condos in established buildings. Condos in new buildings are still in oversupply, but single-family homes, priced right, are selling. Prices are down by 11 percent over September 2008, which is a much smaller reduction than many other Florida locales.

Toronto — Urban living is popular in one of North America’s biggest condominium markets. A new sales tax adding 8 percent to the cost of new homes over $400,000 is expected to boost the resale market.

TorontoVancouver — With the downturn over in Canada and the Olympics only weeks away, real estate in British Columbia is in demand. Vancouver has the highest prices in Canada and is a perennial high performer. Some question what the aftermath of the Olympics will bring.

Washington, D.C. — Recovery is underway in the District of Columbia, and, according to Moody’s, the recession is over here. Expect growing sales to creep into nearby suburbs. Prices are still off 2008 but have shown steady increases this year. This has been one of the 20 strongest performing metros during the recession.

Sources: Jennifer Ames, Jennifer Ames Chicago, Coldwell Banker Residential Brokerage; Case Shiller Home Price Index; Abby Lee, Vice President Brand Marketing, RE/MAX International Inc.; LuxuryRealEstate.com; Mark McLaughlin, CEO Pacific Union International, San Francisco; Metropolitan Policy Program, Brookings Institution; Joyce Rey, Coldwell Banker Previews International, Los Angeles; Sharon Simms, Alva International Real Estate in St. Petersburg, Fla.; Urban Land Institute, “Emerging Trends in Real Estate 2010.”

2 Responses to “25 Markets to Watch”

  1. Camilla – it’s very interesting to compare the market conditions in the various markets. You should do a followup on international markets, since many people are buying second homes outside the US.

  2. [...] 25 Markets to Watch Like everyone else, including the White House, we’ve been keenly watching indices that measure changes in home prices and sales this year. This year we paint a picture of real estate in the U.S. and internationally, using snapshots of 25 key markets that many will be keeping an eye on throughout 2010.By Camilla McLaughlin [...]

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