Some areas of the US have escaped the punishment inflicted by housing bust
Economic savants focused on the US housing bust tend to ignore one overriding fact: Some of the market is doing fine, benefiting from employment, population surges, and moderate increases in housing prices that are close to or below the national average.
Where are these hot spots? They certainly aren't in Arizona, Florida, Nevada, or Southern California. But they are worth considering if you are relocating, investing, or looking for a retirement haven or second home.
Many of these bubble-averse locales seem to be expanding or holding their own for employment and demographic reasons. Americans are getting older, want to move somewhere warmer, and need to find a smaller home for less money. Or younger workers are going where they can find decent jobs and affordable housing. Hint: You won't find these areas in coastal cities.
Population growth is another driver. While many cities in the Upper Midwest are depopulating due to manufacturing-job losses, employment is robust in the South, where white-collar occupations are growing.
As more than one economist has quipped, there really is no national real estate market. The tech-savvy Seattle area is a quantum leap from decaying Detroit. And mature Cleveland is light years away from the young, job-producing Salt Lake City corridor. Where jobs are leaving, a housing rebound will be slow. The Detroit area and Ohio cities will be among the riskiest markets for some time, according to a website that measures "collateral risk," or the likelihood you will lose equity in a given market (homesmartreports.com).
The most bountiful places for housing growth are where homes are reasonably priced and people are relocating because jobs are being created. Let's take the Dallas area. Not only is "Big D" one of the top producers of jobs - followed by the San Francisco Bay Area, and Seattle-Tacoma - it leads in the total number of people moving in, according to the most recent federal figures.
Although it's ringed by towns with multimillion-dollar homes, Dallas lagged behind the half-decade US home-appreciation rate through last year. Dallas homes gained an average of 16 percent, compared with the 41 percent national average through 2007.
Other top markets with low risk include Bethesda, Md.; Stamford-Norwalk, New Haven, and Hartford in Connecticut; Providence; the Boston-Worcester area; and Lexington, Ky., according to homesmartreports.com.
US population trends will continue to favor less-populous Southern and Western locations as Northern states become even more expensive and retirees continue to move to the Sunbelt.
The fastest-growing areas also often suffer from a lack of regional planning. These burgeoning, car-dependent sprawling urban areas will become increasingly unaffordable if energy prices remain high and infrastructure needs push up property taxes.
John F. Wasik is a Bloomberg News columnist. He can be reached at jwasik@bloomberg.net.
