Dennis Norman
By: Dennis Norman
I would love to say I have a definitive answer to the question the title of this post poses but I think I’ll leave that to the economists and analysts that track the real estate market and get paid to make such predictions.
One such company that does just that is Local Market Monitor, a company that uses a proprietary formula called the “Equilibrium Home Price” to determine if real estate is currently over or under valued in the over 300 US local markets they track. They produce a 12-month home-price forecast, from which they rank markets that they expect to have the best as well as worst performance over the next 12 months. They also publish the same results for the 215 smaller metro areas they cover as well.
The large metro areas (over 600,000 population) with the bestprojected performance over the next twelve months, according to the report are:
- Baton Rouge, LA
- Buffalo-Niagara Falls, NY
- Dallas-Plano-Irving, TX
- Fort Worth-Arlington, TX
- Houston-Sugar Land-Baytown, TX
- Little Rock-North Little Rock-Conway, AR
- Omaha-Council Bluffs, NE-IA
- Pittsburgh, PA
- San Antonio, TX
- Syracuse, NY
- Wichita Falls, TX
These top markets, where home values are expected to remain level, are among those markets that did not have a big housing boom and have had relatively small job losses over the past year. Home prices in these areas are generally below the US average and reflect where the recession has so far had a relatively mild impact. Dallas, San Antonio and Omaha have all experienced a 1.6 percent job loss over the past year, and jobs have actually increased in Baton Rouge.
“While home building activity nationally is down 35 percent from last year, some of our top markets are doing relatively better,” said Ingo Winzer, president of Local Market Monitor. “Building permits were off only 20 percent in San Antonio and Omaha, and they were up 10 percent in Buffalo.”
The large metro areas (over 600,000 population) with the worstprojected performance over the next twelve months, according to the report are:
- Fresno, CA
- Las Vegas-Paradise, NV
- Miami-Miami Beach-Kendall, FL
- Orlando-Kissimmee, FL
- Phoenix-Mesa-Scottsdale, AZ
- Portland-Vancouver-Beaverton, OR-WA
- San Jose-Sunnyvale-Santa Clara, CA
- Stockton, CA
- Tacoma, WA
- Tucson, AZ
- West Palm Beach-Boca Raton-Boynton Beach, FL
These markets, which are expected to have the largest declines in home values over the next year, are also among those that previously had the biggest price booms. This was attributed in large part to speculative buying, including the repercussions of inflated housing construction on the local job market and investor portfolios.
“Right now, a good market is still one where home prices aren’t going down,” said Ingo Winzer. “However, this will change as the recession eases. Next year we’ll see good price increases in many markets.”
The small metro areas (under 600,000 population) with the best projected performance over the next twelve months, according to the report are:
- Abilene, TX
- Altoona, PA
- Amarillo, TX
- Bismarck, ND
- Brownsville-Harlingen, TX
- College Station-Bryan, TX
- Corpus Christi, TX
- Fargo, ND-MN
- Florence-Muscle Shoals, AL
- Fort Smith, AR-OK
- Grand Forks, ND-MN
- Greeley, CO
- Iowa City, IA
- Kennewick-Pasco-Richland, WA
- Killeen-Temple-Fort Hood, TX
- Lafayette, IN
- Lafayette, LA
- Lake Charles, LA
- Laredo, TX
- Lubbock, TX
- Monroe, LA
- Morgantown, WV
- Muncie, IN
- Sioux City, IA-NE-SD
- St. Joseph, MO-KS
- State College, PA
- Texarkana, TX-Texarkana, AR
- Topeka, KS
- Waco, TX
- Williamsport, PA
These top markets, where home values are expected to remain level, are among those markets that did not have a big housing boom and have had relatively small job losses over the past year. Home prices in these areas are generally below the US average and reflect where the recession has so far had a relatively mild impact.
The small metro areas (under 600,000 population) with the worstprojected performance over the next twelve months, according to the report are:
- Bend, OR
- Boise City-Nampa, ID
- Cape Coral-Fort Myers, FL
- Deltona-Daytona Beach-Ormond, FL
- Modesto, CA
- Naples-Marco Island, FL
- Port St. Lucie, FL
- Prescott, AZ
- Reno-Sparks, NV
- St. George, UT
- Vallejo-Fairfield, CA
These markets, which are expected to have the largest declines in home values over the next year, are also among those that previously had the biggest price booms. This was attributed in large part to speculative buying, including the repercussions of inflated housing construction on the local job market and investor portfolios.
OK, so there you have it: you have numerous locations from which to choose to buy property and expect better performance from the local real estate market than other areas (provided, of course Local Market Monitor has nailed it). One thing to remember though, it’s all relative; the list of markets that are going to perform the best don’t guarantee great returns or appreciation….just better than the other markets. So the real question is just how bad are the “worst’ markets going to do?
Check back with me in a year and I’ll have the answer.
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