Yesterday’s Foreclosure Hotbeds are Today’s Turnaround Towns


Markets that once topped RealtyTrac’s lists for leading the nation in foreclosure starts now are topping’s quarterly ranking of towns that have lowered their inventories and raised median home values enough to qualify as top turnaround towns.

Detroit, Santa Barbara, Calif. and Reno, Nev. led the the nation in recovery in the third quarter of this year, as nationwide inventories of homes for sale shrunk and median list prices rose, according to the latest analysis from

Q3 2013 Ten Top Turnaround Towns

Q3 2013 Rank

(Metropolitan Statistical Area)

Qtrly Year/Year   Median List Price

Qtrly Year/Year   Median Age of Inventory

Qtrly Year/Year   Inventory


Detroit, MI





Santa Barbara-Santa   Maria-Lompoc, CA





Reno, NV





Fort Lauderdale, FL





Ann Arbor, MI





Dallas, TX





West Palm Beach-Boca   Raton, FL





Boston-Wrcstr-Lwrnce-Lowll-Brcktn,   MA-NH





Boulder-Longmont, CO





Las Vegas, NV-AZ





The third quarter of 2013, July through September, witnessed some of the fastest rising prices ever seen on’s database of nearly two million listings.  The size and breadth of price appreciation across the 150 markets follows made an indisputable statement: the long awaited recovery has arrived at last.

A mirror of the diversity and scope of the recovery, this quarter’s Top Ten Turnaround Towns are a mix of housing hot spots and heartland markets, high tech and heavy metal economies, seaside resorts and gritty manufacturing centers.  From Detroit to West Palm Beach, the list is surprising and also an affirmation of the strength of the nation’s real estate economy.

Only three of the markets that made the list of Top Ten Turnaround Tows were on it last quarter; another sign of how thoroughly the recovery bringing about change to the real estate economy. Detroit, Santa Barbara and Reno all made the top ten list again and improved their performance despite stiff competition from improving markets across the nation.  Detroit rose to first in the nation from seventh place; Santa Barbara improved one spot, rising from third to second and Reno moved up to the third spot from tenth in the second quarter.  Markets like Oakland, San Jose, San Diego and Los Angeles that have made headlines for being hot markets were out-performed by newcomers that did well in all the categories important to the listing such as inventory trends, age of inventory and list-to-price ratio.

Detroit MI

Once the poster child for America’s ailing auto industry, Detroit has turned around its housing markets as the auto companies regained their economic standing and prestige.  Instead of sinking when the city of Detroit had just filed for bankruptcy, its housing markets were in the process of a renaissance.  Last quarter it made seventh place in the second quarter ranking of top turnaround towns.  Not only has repeated on the list this quarter, it has moved up to take the top spot.  Perhaps never has a city achieved such a dramatic turnaround.

Santa Barbara-Santa Maria-Lompoc CA

Despite some tough competition by other hot markets, Santa Barbara moved up to second place due to the young age of its inventory, ranking sixth nationwide for the quarter and the decline in its inventory, tenth best in the nation.  Calling itself the million dollar city when median home prices hit $1,250,000 in 2005, happy times may be here again.   The median sale price for the 114 houses sold in June was $1,048,000, according to the Santa Barbara Association of Realtors.

Reno NV

Reno may have a difficult time protecting its place on the turnaround list.  According to the Reno-Sparks Association, September experienced a sales drop of 21%.  With a decline in pending sales last month and an increase in interest rates, along with typical seasonal trends, the decline is not unexpected. “We continue to see a leveling in median sales price after the trending appreciation that had taken place in the prior 16 months. This may be due to the beginning of the seasonal softening of median sales price along with recent increase in interest rates,” said the association.

Fort Lauderdale FL

Fifty years ago, Fort Lauderdale was where the boys were.  Today’s it’s where the inventory isn’t.   Down 22 percent on the year, Lauderdale’s inventory shortfall has lit a fire under prices; the median price of a single-family home in Miami-Dade County leaped 20.5 percent in August according to the Miami Association of Realtors.  A 3.1 percent increase in inventories of single-family homes listed for sale in Miami-Dade amounted to just a 4.9-month supply of homes on the market, down from a 5.7-month supply a year earlier.

Ann Arbor MI

Known primarily as home to the University of Michigan, how did this smaller market come out of nowhere to land on the top ten list?  Ann Arbor scored in the top twenties among 150 markets in three critical areas:  size inventory, price gain and age of inventory.  Together, these metrics define a market’s turnaround potential.

Ann Arbor real estate is stabilizing and with the current low interest rates and strong real estate values.  One measure of the area’s growing stability is the shrinking gap between the asking prices and sold prices.  Median prices of those homes for sale this fall are down 1.1 percent and those sold are up 5 percent when comparing this May to last year.  Sales, listings and prices are all showing positive gains over last year, according to the Ann Arbor Area Board of Realtors. Residential sales for September were up 22 percent at 338 units, over 278 last year. There were 420 new residential listings in September, a gain of 24 percent over last year when there were 339 listings in September 2012according to the Ann Arbor Area Board of Realtors.

Dallas TX

Another newcomer to the top ten, Dallas is one of those markets that didn’t rise much during the housing boom and didn’t fall very far—only about 6 percent–when the bottom dropped out in 2007.  Its path to recovery hasn’t been very steep at all.  Dallas has rebounded and then some.

Behind the healthy growth of the Dallas-Fort Worth housing market is one of the strongest local economies in the nation.  Payroll jobs rose by 111,800 for the 12 months ending in July and the July unemployment rate was 6.4%, down from 7.2% one year ago.

West Palm Beach-Boca Raton FL

Even though they are two of the wealthiest resorts in America, West Palm and Boca have had their share of challenges during the housing crash and Florida’s struggles with foreclosures.  However, the West Palm-Boca market has taken the critical first step.  It has cut inventory deeply at a rate of 17.73% and age of inventory, though 116 days in September has been falling quickly.  Now it ranks in the top ten national for two of the three most important metrics that determine the turnaround towns:  inventory decline, age of inventory decline and change in list price.  Its prices, at 49 of the 150 markets tracked by, are holding West Palm back from rising even higher.

Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH (MA)

The greater Boston market is a mainstay of the nation’s real estate economy, a market that, like Dallas and Boulder was not seriously hampered by the housing crash.  With a median price of $334,900, Boston is one of the wealthier markets in the nation. However, like many markets that suffered greatly at the hands of foreclosures, Boston cut its inventory deeply over have past two years, earning fourth place in terms of inventory reduction during the third quarter.

Boulder-Longmont, CO

Tight inventory is also Boulder’s secret to landing on the ten top turnaround towns list.  It trimmed its inventory of homes for sale by 25.96% compared to last year and ranked 7th on the top turnaround town list for inventory decline.  Lack of new construction helped cut supply as did homeowners deciding not to move.
Photo Credit: david_shankbone

About Author

Steve Cook is the editor of Real Estate Economy Watch and writes for a several leading outlets in addition to BiggerPockets, including Equifax and Total Mortgage. He also provides communications consulting services to leading real estate companies. Previously he was vice president of public affairs for the National Association of Realtors.


  1. I live near Detroit and the excitement about the city is sure growing but part of the reason the inventory has shrank is because organizations are demolishing dilapidated houses all over Detroit. Millions of dollars are being spent to ‘shrink’ the inventory so part of the numbers are artificial.

    • Jason, those houses are abandoned, gutted, and burned out. Most of them are sitting in tax foreclosure inventories and have not been for sale for years.

      Prices hit rock bottom in Detroit and are recovering. As someone who wants to buy more rental houses, I wish they would slow down for me.

  2. Insightful article. Guessing there is still upside in a lot of these markets for savvy investors (with the exception of Dallas).

    According to the Case-Schiller home price median index, Detroit is still down 27% from market highs, Miami is down 39% and Las Vegas is still down over 47% from 2006/07 highs. Home prices in Dallas are currently higher now than in 2006/07.

  3. Reno , NV is fool’s gold.
    one company here was better much buying everything top dollar early in the year, and flipped the house with the worst paint/carpet ever,lol. that company killed it with over 100-200 flips during jan-sept this year. i feel sorry for people who purchased a house from them.
    sprinkle that in with the latest ” gotta buy now, interest rates going up” really was a perfect storm during the 2nd/3rd quarters. houses are touching into the 2004-2005 price range around here. a year ago this time, house prices where around late 90’s zone. too big of a jump in less then 9 months.
    there hasn’t been much in job growth, if any. no new business also. more business seem to close then open around here.the average income hasn’t got up either. crazy.

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