Convention cities reflect contrast in housing market's recovery

Convention cities Tampa, Fla., and Charlotte, N.C., provide a stark contrast of the housing market's ragged recovery while putting the spotlight on the sector's absence from the election-year dialogue. 

The North Carolina and Florida cities, like most other metro areas around the country, have experienced their own housing booms and busts, but the two are "light years apart" in how they weathered the crisis, according to an analysis released Tuesday by Trulia, a firm that tracks real estate trends.

Tampa, home of last week's Republican convention, has been particularly hard hit and is taking much longer to mount a recovery, while Charlotte is experiencing rising housing prices and and solids gains in residential construction. 

"Through this lens, Charlotte and Tampa look like odd choices for the parties’ respective conventions," said Jed Kolko, Trulia's chief economist, as Democrats begin their convention Tuesday night. 

"Last week at the Republican convention, [Mitt] Romney and [Paul] Ryan both referred to how Americans are suffering the housing crisis without proposing specific policies," he said. 

"But if you’re going to hold a political convention in hard-hit Tampa in 2012, you should really have some fresh new ideas about housing."

While the parties outlined housing policies in their party platforms, neither has made the sector's health a central focus of their economic messages, nor provided much detail into how they would kick-start the sector despite its link to economic growth. 

The omission has left housing experts, including homebuilders, perplexed about the lack of ideas emerging from the campaigns. 

North Carolina and Florida are swing states that contenders President Obama and GOP nominee Mitt Romney will need to secure a victory in November. 

Kolko thinks Democrats are gearing up to talk about housing policy this week at their convention even though Charlotte's housing market "isn’t in enough pain to be a particularly compelling setting to rally people around housing policies."

The Obama administration and other Democrats have pushed for more mortgage principal reduction and refinancing for homeowners, while Romney's campaign has focused on reducing the government's role in the mortgage finance market. 

In looking at the two cities, Charlotte’s post-bubble price drop of 16 percent was less than national average, and the city has moved up to seventh among the 100 largest metros in construction activity this year. 

By contrast, Tampa experienced a peak-to-trough price decline of 42 percent and continues to face some of the worst foreclosure and vacancy rates in the country, mostly exacerbated by Florida’s slow foreclosure process, which is handled through the court system. 

Tampa also has half the construction activity of Charlotte, with almost twice as many vacancies and more than twice as many foreclosures.

Making the situation look even worse, while other struggling housing markets like Phoenix and Miami have recently seen prices rise above 10 percent in the last year, Tampa hasn’t been that lucky.  

In July, Trulia reported that asking prices in Tampa rose just 1.2 percent year over year — slightly behind Charlotte’s 1.5 percent.

In a separate report on Tuesday, CoreLogic said national home prices jumped 3.8 percent in the 12 months ending in July, the largest year-over-year increase in six years.

Price also rose 1.3 percent in July from June, the fifth straight increase for the monthly and annual indexes. 

Prices were up in 77 out of 100 large cities tracked by CoreLogic, four more than June. 

Still, prices remain 27 percent below their April 2006 peak.

Overall, Florida was one of the hardest-hit states in the nation during the housing crisis, second only to California in completed foreclosures for the 12 months ending in July at 92,000, according to CoreLogic. The top five states account for nearly half of all completed foreclosures nationally.

The Sunshine State also is top in the country for the highest foreclosure inventory as a percentage of all mortgaged homes, at 11.2 percent.