In the wake of the real estate bubble burst, a number of metropolitan areas experienced price declines of up to 30 percent during the course of a few years. However, for many of these cities, recovery may occur just as quickly.
Phoenix is one particular city demonstrating these trends, according to a report from Clear Capital. During the course of September, the local housing market experienced annual growth of 27.7 percent, the strongest in the country.
"As this low price point market continues to rise, it will eventually price out some of the current demand pool," the company said. "But at this point, it continues to offer attractive potential to buyers. Should the forecast be realized, Phoenix's future median price of $174,000 would remain 33.3 percent below the peak of $262,000."
Meanwhile, Las Vegas, which was one of the hardest-hit areas following the housing market collapse, may follow a recovery pattern similar to Phoenix's. Home prices in the area appreciated 8 percent so far this year and could increase an additional 9.5 percent during the next six months, the report said.
Property data indicates Las Vegas currently has the highest saturation rate of real estate-owned properties in the country, at 35.7 percent. However, this trend may prove to be positive, as a large presence of distressed homes could provide entry-level buyers with affordable options to own property.
Real estate investors have also been active throughout Las Vegas. In order to cut the vacancy rate in the local marketplace, these buyers have purchased many of these distressed properties, including foreclosed houses, in bulk and converted them in affordable rental units. This practice has been beneficial for both investors and the local housing market.
Some markets still struggle
Unfortunately, not all local housing markets appear to be in recovery mode. While Las Vegas is expected to follow the same path as Phoenix into positive territory, experts from Clear Capital expect Memphis to become the next Atlanta.
At the end of September, property values in Memphis were down 48.3 percent from peak levels, the report said. In addition, the REO saturation rate increased 8.6 percent from a year earlier and there's no indication this activity might slow in the near future.