Realestock Blog

About a year ago, we posted about an interesting article from Forbes.com. The article predicted which US metropolitan areas would be the strongest long-term housing markets that could stand up in the recession. You can read the entire blog post on the subject here. The following ten cities were listed in the top ten:

Now, admittedly these predictions are for long-term value over ten years, but it is never too soon to check back and get a progress report.

So how well have the predictions held up? According to the latest statistics from the National Association of Realtors, it is the smaller municipalities and the suburbs that have had the real estate bust pass them by.

Austin, Texas as well as Rochester, NY saw their housing market fall by only 0.1% between the second quarter of 2008 and the second quarter of 2009. In an entirely different region, Bloomington, Indiana saw their housing market rise 0.1% between the second quarter of 2008 and the second quarter of 2009.

However, the biggest winners, according to the National Association of Realtors, as well as Zillow.com’s Home Value Index, are Cumberland, Missouri and two metropolitan areas in North Carolina; Fayetteville and Burlington. Cumberland’s housing market rose 9.4% between 2008 and 2009, with the median price at $ 84,000. Both Fayetteville and Burlington reported even higher increases between 2008 and the second quarter of 2009- with Fayetteville’s increases at 11.9% and a median housing price at $122,900; while Burlington had a whopping 14.5%, with its median housing price at $135,100.

As you may notice, none of the ten cities from the Forbes list appear amongst the early market leaders. When you consider that the recovery thus far has been concentrated in the Midwest and smaller areas rather than the major urban metropolises, this is not too much of a shock. The Forbes writers can at least take some solace in the fact that none of these ten areas were amongst the biggest losers in the past year. Las Vegas saw its housing market fall by 31.2% to $139,400 in the last year. Large metropolitan areas like Detroit and Orlando suffered massive losses in their housing markets, with Detroit being down 23% to $ 99,400 and Orlando down 24.5% to $139,100. Fort Myers, Florida and Phoenix, Arizona also saw their housing markets fall nearly 30% as well in the last year.

So how did the ten cities on the list itself fair? Surprisingly, number one on the list, Seattle, was hit the hardest with its housing market down 9% from the previous year. Minneapolis, number four on the list was the next hardest hit; with its housing market down 8.4% from 2008 at $194,200. Portland’s numbers went down 7.3% and New York’s dropped 6.7%. Washington was close behind at 6.2% and Philadelphia and Atlanta came in at a 5.4% and 5.2% loss in their housing markets. The winner, out of all of the cities on the list was St. Louis, which saw their market drop 4.3%, nearly half the amount that Seattle’s market dropped.

What have we learned from these predictions that were made right in the midst of the housing crisis? First of all, we can see that while all of these predictions were based off of sound data and research, the regions still had their home values drop further than predicted. So is this a bad time to get into the real estate market? No. But like anything else in an economy that is recovering from a worldwide recession- smart buying is still the way to go. Gone are the days of reckless investment, but smart investors? They can still come out ahead because in this day and age, timing is everything. If anything this Top Ten prediction list has proven, it’s that predictions are hard to make and sometimes we just can’t be sure how things will turn out. Trust that little gut feeling we commonly ignore, and you just may come out of this ahead in the long run.