Filed under: News
The grass is always greener on the other side - even if said yard is located in one of the states hit hardest by the foreclosure crisis.A new report by listings company Trulia Inc. reveals that one in three home searches cross state lines, and seven out of 10 of the most popular real estate markets perused by out-of-towners are in Florida.
The study looked at listing search data between Oct. 1 and Dec. 31 that compared incoming property searches from out-of-towners against the number of outgoing searches by locals. The results were narrowed to include only listing views from at least 100 miles away from a property.
Florida Dominates Most-Desired-Properties List
In the most popular market for out-of-towners, the metro area of Palm Bay-Melbourne-Titusville, Fla., there were nearly nine times more inbound searches than outbound. This may be surprising to locals, who are intimately more familiar with the area's housing woes. One in every 205 homes in Palm Bay received a foreclosure filing in Dec. 2011, according to RealtyTrac Inc. -- more than triple the national rate of 1 in 634 foreclosure filings.
But it's not the foreclosures that are attracting house-hunters, but the price declines that they signal, said Jed Kolko, chief economist for Trulia.
Kolko told AOL Real Estate that "Florida has the worst of both worlds -- big price declines, and a slow judicial process for foreclosures" which further delays the local housing recovery.
Foreclosures in the third quarter of 2011 sold for an average 34 percent cheaper than conventional sales, according to RealtyTrac. Couple steep discounts with snowbirds' perennial quest for sunnier, happier places to live, and Florida's dominance in the report makes perfect sense.
Furthermore, because of both the huge backlog of homes in some stage of mortgage default and the slow judicial process used to mediate foreclosures in the state, Florida's home prices aren't likely to rise to anywhere near the pre-boom peak for many years. From start to finish, foreclosures take 806 days to complete in Florida, according to RealtyTrac. The national average is 348.
Popular metros outside the Sunshine State include Tulsa, Okla., the Riverside-San Bernadino-Ontario area of California, and South Carolina's Charleston-North Charleston-Summerville region.
Where Homeowners Want Out
On the flip side, Trulia calculated the top metro areas where locals are looking elsewhere for real estate. By calculating the ratio of outbound listing views to local listings, they arrived at a list of mostly bigger (and comparatively more expensive) cities where residents are searching for a way out.
Topping the list is the area of Newark, N.J, and Union, Pa., where more than three times as many outbound listings were viewed than local ones. San Jose, Calif., Washington, D.C., Philadelphia and Bethesda, Md., rounded out the top five.
But whether prospective homebuyers are looking to buy in or get out, what's driving their search behavior is affordability, Kolko observed. That said, today's looky-loos may not necessary become tomorrow's buyers -- tight credit and larger down-payment requirements may stop many house-hunters in their tracks. When the economy begins to shift, however, expect many of these markets to reap the benefits of pent-up demand.
CORRECTION: A previous version of this article referenced Palm Beach as part of the Melbourne-Titusville, Fla., metro area. It should have identified that city as Palm Bay.
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See also:
Foreclosure Action at Lowest Level Since 2007
Foreclosure Discount Capitals: Where They're Worth It