A Brand Called "Weston"

By Venessa Wong , Bloomberg Businessweek

October 24, 2011

Want to know how bad the real estate market is? Just drive down almost any street in the U.S. and you’re likely to see “for sale” signs lining the road. Come back a month later, it’s a good bet the same signs are still there—and quite possibly a few new ones, too. But while there’s a lot of housing pain, there’s also some good news. That’s because in some markets across the country not only have home values improved, a few have even seen double-digit growth.

So where is this miracle occurring? Believe it or not, the city that has seen the biggest increase in home value is in Florida. That’s right—the state that has seen home values plummet 52.3 percent from 2006 peak levels. Nearly 96,000 loans were modified in Florida through August 2011 under President Obama’s Making Home Affordable program. Joblessness, foreclosures, and high inventory hamper recovery in nearly every corner of the state, with rare exceptions. In this case, the rare exception is Weston, a high-income city of more than 65,000 people near Fort Lauderdale where the median home value has risen 15.1 percent to $280,000 from February 2009 to August 2011.

A survey of the 1,000 largest cities nationwide by online real estate marketplace Zillow for Businessweek.com identified the markets with the biggest gains and losses in home value, ranking Weston the best-performing city since Obama took office. In contrast, the U.S. median home value fell by 9.9 percent over the same period.

What’s behind Weston’s success? Ines Garcia, an agent for EWM Realtors in Weston, describes the city as “Broward County’s cul-de-sac.” “It’s like driving into a gated community: the landscaping, the manicuring all around the city,” she says. “We were very lucky. Weston was one of the last communities to fall and one of the first to recover.”

Other winners: Arlington, Mass., where the median home value increased by 14.8 percent since February 2009; Brookline, Mass., at 13.6 percent; and the D.C. suburbs of Burke, Va., at 13.5 percent, and Vienna, Va., at 12.8 percent, Zillow data indicate.

Of course, the winners are far outnumbered by the losers. The city with the worst-performing market in the survey is only 50 miles from Weston in Homestead, Fla., where the median home value dropped by 48.8 percent since February 2009. Rounding out the bottom worst-performing markets: former manufacturing city Pontiac, Mich., with a 47.4 percent decrease, and New Jersey capital Trenton, at 46 percent.

While those in depressed housing markets hope for solutions from the White House, “I don’t see how any President is responsible for the housing market in a particular area,” says Steven Blitz, director and senior economist at ITG Investment Research in New York. The federal government and national housing policies have a limited impact on a local level.

According to Zillow Senior Economist Svenja Gudell, under current conditions the median U.S. home value will likely fall another 3 percent to 5 percent and not reach trough until 2012 at the earliest. The Obama years have been bad ones for housing, yet government was not alone in breaking the housing market—and it cannot be alone to fix it.

Here's America's five best housing markets:

No. 5 - Vienna, VA

Percent change: +12.8

MSA: Washington, D.C.

Population: 15,687

One of the gems of Fairfax County, Vienna is home to such attractions as the Meadowlark Botanical Gardens and the rolling greens of the private Westwood Country Club. According to the Zillow Home Value Index, the median home value in the city was $638,500 in August, and the median sale price was $ 645,400 as of Aug. 31.

No. 4 - Burke, VA

Percent change: +13.5

MSA: Washington, D.C.

Population: 41,055

A green area of parks, cul-de-sacs, and community centers with pools on the outskirts of the greater Washington, D.C., area, Burke is an affluent community within Fairfax County. The median home value in the city was $434,200 in August, according to the Zillow Home Value Index, and the median sale price as of Aug. 31 was $427,300.

No. 3 - Brookline, MA

Percent change: +13.6

MSA: Boston

Population: 58,732

The affluent suburb of Brookline shares a border with Boston but has a unique feel, with upscale stores and cute restaurants. The town is mostly residential, with historic houses that hearken back to the Revolutionary War. It is also the site of the Country Club, the oldest country club in the U.S., which was founded in 1882. The median home value in the city was $506,900 in August, according to the Zillow Home Value Index, and the median sale price was $513,200 as of July 31.

No. 2 - Arlington, MA

Percent change: 14.8

MSA: Boston

Population: 42,844

Settled in 1635 as Menotomy Village, an Algonquin word for rapids or swift water, and later named Arlington, the area has a rich history that includes part of Paul Revere's famous ride. The town has a high level of median income, great schools, and green parks. Home sales in this Boston suburb have increased for the last four years, according to Boston.com. The median home value in the city was $475,800 in August, according to the Zillow Home Value Index, and the median sale price was $468,200 as of July 31.

No. 1 - Weston, FL

Percent change: 15.1

MSA: Miami-Fort Lauderdale, FL

Population: 65,333

The country's top-performing housing market since President Obama took office: Weston, a luxury community near the Everglades in the Fort Lauderdale area. The city has been home to such pro athletes as former White Sox player José Canseco and the Florida Marlins' Hanley Ramirez, according to real estate news site blockshopper.com. From April 2008 to April 2011, the population grew about 5 percent, estimates the University of Florida Bureau of Economics & Business Research. In 2006 Businessweek.com ranked Weston one of "The Best Affordable Suburbs" in the U.S. The median home value in the city was $280,000 in August, according to the Zillow Home Value Index, and as of Aug. 31, the median sale price was $335,000.

Here's America's five worst housing markets:

No. 5 - Altamonte Springs, FL

Percentage change: -41.3

MSA: Orlando

Population: 41,496

The fortunes of Altamonte Springs, like those of Orlando, have risen and fallen with the economic boom and bust. The median home value in the city is $86,300, according to the Zillow Home Value Index, and on Sept. 30 the median sale price was $66,900.

No. 4 - Lehigh Acres, FL

Percentage change: -42.2

MSA: Fort Myers

Population: 86,784

Lehigh Acres is a "census-designated place" in the Fort Myers MSA. The area experienced a boom in new housing in the first years of the century, peaking at more than 7,500 new homes built in 2006, according to the New York Times. In 2009, sale prices of homes in Lehigh Acres were 80 percent off their peaks. Foreclosures have soared in the area, and unemployment in the county rose to 9.8 percent, from 3.5 percent in 2007. The median home value in the city is $63,700, as measured by the Zillow Home Value Index, and the median sale price as of Aug. 31 was $65,200.

No. 3 - Trenton, N.J.

Percentage change: -46.0

MSA: Trenton

Population: 84,913

Like many former industrial cities, Trenton has seen its economic base dwindle dramatically since the end of World War II. Despite being the capital of New Jersey, the city fell on hard times as manufacturing jobs declined and many residents relocated to the suburbs. Crime has been a persistent problem. In 2005, it was cited as the fourth most-dangerous city in the U.S. with a population between 75,000 and 99,000. The median home value in the city is $60,700, according to the Zillow Home Value Index, and the median sale price at the end of July was $38,000.

No. 2 - Pontiac, MI

Percentage change: -47.4

MSA: Detroit

Population: 59,515

Falling within the Detroit metropolitan area, Pontiac is a former manufacturing city whose the economic base eroded along with the decline of the U.S. auto industry. Once the home of General Motors' (GM) primary truck factory and the now-defunct Pontiac brand, the city entered into receivership in 2009. From 1970 to 2010, the city's population shrank 30 percent, to 59,575, according to the 2010 Census. The Zillow Home Value Index puts the city's median home value at $33,800, and the median sale price as of Aug. 31 was $24,000.

No. 1 - Homestead, FL

Percentage change: -48.8

MSA: Miami-Fort Lauderdale

Population: 60,512

At first glance, Homestead is a typical working-class Florida community that experienced a huge housing boom in recent years. Unfortunately, it is also typical in that many of those new houses are either unfinished, behind on their mortgages, in foreclosure, or abandoned. Homestead is unlike other Florida communities, however, in that it has seen the biggest deterioration in home values in this already economically-damaged state. Even worse, with a percentage drop of 48.8 percent, Homestead has the worst decline in home values in the U.S. The city was badly damaged by Hurricane Andrew in 1992 and never really recovered. Crime is also an issue: The crime rate remains above the state average. According to the Zillow Home Value Index, the median home value in the city is $76,000, and the median sale price was $96,400 as of Aug. 31.