The 2012 buying and selling season is well under way, and the housing market is finally showing signs of life. Agents are sharing stories of bidding wars in many markets as buyers are getting off the fence, ready to capitalize on still-record low levels of affordability.
So is now really a good time to buy? In many markets yes, and some places are better markets for buyers than others. Knowing that some people might still be wary of dipping their toes in the real estate market, we looked at the places where it makes a lot of sense to buy if you live there. To determine our Best Places to Buy in 2012 list, we gave equal weight to several factors including:
One caveat – just because your city didn't rise to the top of our list doesn't mean you shouldn't buy there. If you're planning to live in your home at least 5-7 years and have good credit, now can be a great time to buy in many markets. Grand Rapids, MI
- housing prices compared to local incomes
- home value trends (where home values have been stabilizing or rising over the past year and past quarter)
- unemployment rates and the change in unemployment rates over the past year>whether buying makes more sense than renting.
Home values are on the upswing in Grand Rapids, increasing on a monthly, quarterly and yearly basis according to Zillow's Home Value Index. Home values are up 4.8 percent from April last year. The median home value is $108,000, which compares favorably with median incomes in the area. The unemployment picture is also improving in Grand Rapids, falling nearly 2 percent this past year. Phoenix, AZ
Phoenix is a poster child for the housing recession. Home values have fallen a whopping 54 percent since the peak of market. The area is still working through high levels of foreclosure inventory; foreclosure re-sales made up 28 percent of all sales in April. This is actually good news, because it signals that investors are coming in droves to scoop up homes. All of this investor activity is starting to boost home values. Not only are Phoenix home values up, Zillow forecasts them to rise 6.5 percent this year. "Phoenix is probably the best example of a hard-hit market that is showing signs of recovery," according to Stan Humphries, Zillow's chief economist. Pittsburgh, PA
Home values in Pittsburgh have been rising for the past year, making it one of the better performing markets in the country. In fact, 87 percent of homes there sold for a gain in April – the highest rate in the country. Oklahoma City, OK
Home values rose 4.9 percent in Oklahoma City this past year and the unemployment rate is one of the lowest on our list at 5.1 percent and falling. While some markets on our list represent markets that are showing signs of life after suffering from years of falling home values, Oklahoma City stands out as a beacon of stability, 80 percent of homes in April sold for a gain. Rochester, NY
Rochester has been another steady performer throughout the housing crisis and while home values are down slightly for the year, values are rising on a monthly and quarterly basis. Rochester scored especially high in the price to rent category. It takes 7.3 years of rent to buy a similar home in Rochester, compared with the national average of 10.4. Buyers also have some negotiating room, 40 percent of listings had price cuts in April. 80% of homes sold for a gain in April. Dallas
Dallas made our list with a high score in the affordability category, home prices are 5 percent below their historical average, even though home values have performed much better than most of the country, falling 15 percent from their peak. Buyers in Dallas also get a good bang for their buck, the median value per square foot in Dallas is $65, compared with $92 for the nation. Memphis, TN
Couple stable home values with affordability, and it's good to be a buyer in Memphis. Buyers also get a lot of house for their money in Memphis – the median value per square foot is $60. For comparison's sake, the median value per square foot in Honolulu is $405 (granted you get to live in Hawaii, but still!) Dayton, OH
Home prices compare favorably to incomes in Dayton, and affordable homes mean buying makes more sense than renting. 38 percent of listings had a price cut in April so buyers also have some negotiation room as well.