RealtyTrac Logo RealtyTrac released its first-ever Housing Market Recovery Index (Housing MRI), which found one Florida metro area –Fort Myers & Cape Coral – leading the housing recovery.

Metro area markets leading the housing recovery according to the Housing MRI include upstate New York, Southwest Florida and the Bay area of Northern California. On the flip side, markets in northern Maryland, southeast Pennsylvania and downstate Illinois are lagging behind in the recovery.

“The U.S. housing market has clearly shifted to recovery mode over the past 18 months, with home prices consistently rising and foreclosures falling closer to pre-housing bubble levels,” says Daren Blomquist, vice president at RealtyTrac. “Still, symptoms of the distress that plagued the housing market over the past seven years continue to linger … This lingering distress is creating an uneven pace of recovery across different local markets.”

The index was calculated based on seven different factors relating to the health of the real estate market: unemployment rate, underwater loans percentage, foreclosure activity percent change from peak, distressed sales percent of total sales, institutional investors share of total sales, cash purchases share of total sales, and median home price percent change from bottom. Those seven factors were indexed for each market with national averages as a baseline, and all seven indexes were averaged to calculate a total recovery index.

RealtyTrac ranked 100 major U.S. metros based on this total recovery index, but data is available for more than 900 metro areas nationwide.

“Median home prices have bottomed and are now rising in all 100 ranked markets,” Blomquist says. “Likewise, foreclosure activity is past its peak in all 100 ranked markets – although foreclosure numbers have been rebounding recently in some areas where a more lengthy judicial process created a backlog of pent-up foreclosure activity.”

The Housing HMI reports says recovery in the Cape-Coral-Fort Myers market is being driven by strong home price increases, which are being fueled by a high percentage of cash and institutional investor purchases, along with sharp decreases in foreclosure activity.

The Cape Coral-Fort Myers ranked second on the list despite an above-average percentage of underwater homeowners and distressed sales.

No Florida cities ranked at the bottom of RealtyTrac’s rebounding list, though four made the list of 20 for slowest housing rebound: Pensacola-Ferry Bass-Brent, Tallahassee, Ocala, and Port St. Lucie.

All four cities had above-average percentages of underwater homeowners along with below-average participation by institutional investors.

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