Posted October 24, 200717 yr America's Most Stable Housing Markets Matt Woolsey, 10.01.07, 4:00 PM ET Nationwide, home prices are falling, sales are sluggish and the number of foreclosures is mounting. Ask any economist and you'll hear that things are bad, and likely to get worse. Unless you live in Seattle, where the market is slowing but fundamentals remain strong. More below: http://www.forbes.com/realestate/2007/10/01/property-stable-homes-forbeslife-cx_mw_1001realestate.html TOP 10 STABLE HOUSING MARKETS 1. Seattle, Wash. Median home price: $395,000 Annual price change from 2006: 8.9% Projected price change to 2008: 3.09% Seattle continually bucks national housing trends. Price appreciation in the Emerald City has been strong over the last six quarters. Besides a very low unsold housing inventory and a strong sales rate, there are very few non-conforming loans, which lessens the chance of widespread foreclosures and delinquencies. While the market is slowing, the strong lending situation and sales rate bode well for the market. 2. Pittsburgh, Pa. Median home price: $123,500 Annual price change from 2006: 2.7% Projected price change to 2008: 3.37% Pittsburgh's growth has been steady over the last year, and with low foreclosure projections based on the state of the local lending market, very affordable housing stock and relatively low inventory, it can overcome the fact that its sales rate is 30th out of the 40 markets measured. 3. Columbus, Ohio Median home price: $153,900 Annual price change from 2006: -1.2% Projected price change to 2008: 3.49% Columbus, like many other cities in Ohio, has witnessed a deteriorating subprime lending situation. While things aren't going to turn around instantly--projections list Columbus as the 17th worst market for delinquencies (out of 40)--the city's sales rate is picking up. Based on Moody's Economy.com calculations, next year Columbus should boast the eighth-fastest sales rate of the 40 markets examined. 4. Dallas, Texas Median home price: $156,500 Annual price change from 2006: 1.7% Projected price change to 2008: 5.45% Just a few years ago, a 5.45% price increase wasn't especially remarkable, but in today's climate that return looks pretty good. Dallas also benefits from strong job and population growth; an abundance of affordable housing stock makes the market very price-inelastic, helping to shield Dallas from the nationwide bust. 5. St. Louis, Mo. Median home price: $157,200 Annual price change from 2006: 2.7% Projected price change to 2008: 3.01% Because area returns have never been high, St. Louis's housing market generally flies underneath the national radar. Its strongest characteristic: a supply-and-demand dynamic slightly slanted toward the seller. Overexpansion has not hit St. Louis in the same way as other large markets, and its sales rate based on the number of households in the city is strong. 6. Cincinnati, Ohio Median home price: $146,200 Annual price change from 2006: -1.9% Projected price change to 2008: 2.65% That Cincinnati performed so well in our calculations is truly a sign of the times. The market has been feeling subprime fallout over the past year, but as it didn't grow much during the boom, it doesn't have too far to fall. Delinquency rates are expected to be in the middle of the pack nationally, but the signs for an accelerating sales rate suggest that the market's inventory problems might soon be resolved. 7. Atlanta, Ga. Median home price: $175,500 Annual price change from 2006: 0.9% Projected price change to 2008: 4.4% Affordable markets like Atlanta don't feel the extreme swings of higher-priced markets. The city's migration and job creation spikes have made Atlanta one of the fastest-growing cities in America. Its current problems are the result of a bloated inventory, especially condos in the beltway, but other fundamentals, including a fast sales rate and a low proportion of non-conforming mortgages, suggest it can burn off its supply glut. 8. San Antonio, Texas Median home price: $154,300 Annual price change from 2006: 6.6% Projected price change to 2008: 5.35% In rapidly growing San Antonio, housing supply and new construction is keeping up with demand; the sales rate next year is expected to be the sixth highest in the country on a per-capita basis. However, San Antonio has a subprime problem that will dampen the success most of the market has enjoyed. Only Detroit is expected to have a higher delinquency rate than San Antonio's 4.5%. 9. San Francisco, Calif. Median home price: $846,800 Annual price change from 2006: 7.6% Projected price change to 2008: 2.5% When it comes to the non-conforming loan market, San Francisco's biggest worry is the very high rate of jumbo loans--those priced over $417,000 and therefore not eligible for Fannie Mae securitization. That's because the median home price is more than double Freddie and Fannie's price limit. Housing prices continue to climb in San Fran, but affordability problems and lending problems in the jumbo market should put a drag on price growth. 10. Fort Worth, Texas Median home price: $156,500* Annual price change from 2006: 1.7%* Projected price change to 2008: 3.09% Fort Worth is often lumped in with Dallas, though the two cities tied together by a metro area perform a bit differently. Fort Worth's price-growth prospects aren't as strong as Dallas' despite similar sales rates and delinquency rates. The critical differences are in the arenas of job creation, where Dallas outpaces Forth Worth, and that Fort Worth's supply-and-demand dynamic isn't as slanted toward sellers as Dallas.' *National Association of Realtors considers Fort Worth a part of the Dallas Metro area, though for this study we considered them to be separate markets.
October 24, 200717 yr Everyone knows I hate lists! But this one seems pretty fair; I'm not just saying that as a Cincinnati booster but the reasoning behind it seems pretty accurate. That space needle thing adds a nice touch to Seattle's skyline. Couldn't help but notice that in the pic.
October 24, 200717 yr The million-dollar question is ... would Evergrey post this list if P-burgh weren't ranked higher than Cbus and Cincy??? ;)
October 24, 200717 yr I think its more like--he woudn't have cared about the list to begin with if Pittsburgh didn't make the list.
October 24, 200717 yr That picture of Cincinnati looks very livable. In the mean time, Cbus got screwed with their accompanying photo.
October 24, 200717 yr I don't agree with Columbus' ranking at all. Many, many neighborhoods in Franklin County aren't appreciating, with some depreciating. In fact, sprawl and white flight are so rampant that I wouldn't invest in real estate in most areas close to, or outside of, 270 except up north. Far East Side, West Side, Southwest Side, South Side, Grove City, Hillard, Whitehall, Obetz, Gahanna and Reynoldsburg are going nowhere fast and some of those areas are even depreciating. Everybody from those areas are moving to new developments in Pickerington, Ashville, Commercial Point, Lancaster and random unincorporated areas. So many of those types of people buy brand new houses every five years further and further away from civilization (unless you call houses strung along county roads every three acres civilization). They have no loyalty to their location and have no clue that their all vinyl/cheap trim/painted drywall/no tile/garage in your face/immature tree houses are in bad taste. On the commercial side, look at how many strip malls/big box areas that were brand new 12 years ago are in horrible shape. Look at the enclosed malls in 1995 vs. 2007. Look at what has happened to office space in that time. I want to go out on a limb and say that besides the central city, parts of the North Side and inner-ring burbs, Columbus' real estate market is AWFUL. That is, unless you are a new home builder.
October 24, 200717 yr That picture of Cincinnati looks very livable. In the mean time, Cbus got screwed with their accompanying photo. lol ... that's true ... "Hey, while you're here checking out our hott housing market, you need to check out where we toss the bodies of murdered victims."
October 24, 200717 yr "That Cincinnati performed so well in our calculations is truly a sign of the times" What exactly does this mean? Isn't the housing market always stable in the cincy area?
October 24, 200717 yr I think they meant performed well on one of their lists. Cincinnati has traditionally been lambasted by Forbes.
October 24, 200717 yr The prices on existing homes might not be declining compared to other parts of the country, but new construction of single family homes has practically stopped. Butler County (northern suburb of Cincy) Building Department had a day last week, with not a single building permit application. New home permits have slowed to a trickle, and the lumber stores eg: Remier Lumber are laying-off staff. Weird how two years ago homebuilders were being limited on how much drywall they could buy because the manufacturer's couldn't keep up. Commercial construction and residential rehab though seem to be strong.
October 24, 200717 yr I don't agree with Columbus' ranking at all. Many, many neighborhoods in Franklin County aren't appreciating, with some depreciating. In fact, sprawl and white flight are so rampant that I wouldn't invest in real estate in most areas close to, or outside of, 270 except up north. Far East Side, West Side, Southwest Side, South Side, Grove City, Hillard, Whitehall, Obetz, Gahanna and Reynoldsburg are going nowhere fast and some of those areas are even depreciating. Everybody from those areas are moving to new developments in Pickerington, Ashville, Commercial Point, Lancaster and random unincorporated areas. So many of those types of people buy brand new houses every five years further and further away from civilization (unless you call houses strung along county roads every three acres civilization). They have no loyalty to their location and have no clue that their all vinyl/cheap trim/painted drywall/no tile/garage in your face/immature tree houses are in bad taste. On the commercial side, look at how many strip malls/big box areas that were brand new 12 years ago are in horrible shape. Look at the enclosed malls in 1995 vs. 2007. Look at what has happened to office space in that time. I want to go out on a limb and say that besides the central city, parts of the North Side and inner-ring burbs, Columbus' real estate market is AWFUL. That is, unless you are a new home builder. I can vouch for that. I had the misfortune of staying on the far west side in Galloway over the summer and there are so many forclosures. All you have to do is look at the forclosure signs in the front yards of 3 year old construction and so many people with SUVs for sale in their front yard. It's a strong visual statement. I don't know how Columbus truely compares overall but those areas you mentioned are screwed! Yet it seems like Dominion is still building in the same area. It makes no sense.
October 24, 200717 yr Even as bad as all that is, many areas were experiencing many times over during the boom. Head to NOVA or Miami or the far out 'burbs of Chicago to see what the stable areas are compared to. Yeah there was froth in Butler Cty and over building C-bus but nothing like the areas that are collapsing.
October 24, 200717 yr I saw it happening before it did. The weakest link suffers most. Galloway offers nothing. The houses brand new are in the 170k range, meaning new homeowners that are getting into something they shouldn't. The houses are built very cheaply, minimum architectural details and no amenities nearby. Developers looking for a quick buck. Considering their overhead, they have to.
October 25, 200717 yr Even as bad as all that is, many areas were experiencing many times over during the boom. Head to NOVA or Miami or the far out 'burbs of Chicago to see what the stable areas are compared to. Yeah there was froth in Butler Cty and over building C-bus but nothing like the areas that are collapsing. Yes, I lived in NOVA for a while and there were quite a few big box meltdown areas and dying malls (Landmark Mall comes to mind), which is kind of strange because land is much more expensive there.
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