This morning on Forbes.com, I read an article about the cities in America that are most likely to weather this real estate market, and be a great long term investment. Forbes listed the top ten as:
10. Atlanta, Georgia
9. Portland Oregon
8: Cincinnati, Ohio
7. Philadelphia, Pennsylvania
6. St. Louis, Missouri
5. New York, New York
4. Minneapolis, Minnesota
3. San Antonio, Texas
2. Washington, D.C.
1. Seattle, Washington
Living in the Pacific Northwest (Well, south west to those of us in Victoria, BC, Canada), Seattle was not a surprise at number one. However, I found some of the cities on the list to be quite surprising, such as New York, where housing has been so horrifically over priced for some time – Or a Midwest city like Minneapolis, where one would assume businesses are feeling the crunch, which would be reflected in the property prices.
However, looking at this list in detail, it is possible to see that these cities all share things in common that make them more likely to ride the current crisis, and therefore great places to buy real estate. I am not suggesting that you pack up your belongings and hot-foot it to Cincinnati. However, what we should be doing is looking at where we want to buy, and seeing if the area has similar characteristics which may make it a good deal. Smart buying is the new way to buy in this market.
Do you live somewhere where everyone wants to live? I live in Victoria, British Columbia, and while it was one of the most expensive places to live in Canada at the height of the boom, I am not quite throwing myself off my third floor condo just yet. Why? Because Victoria is well known for being the place where people want to retire to in Canada. The city is beautiful, the weather is usually excellent, (note: we are currently having freak winter temperatures of -4°c. This is not normal….bbrrrr…) and it’s an all round great place to live. Whatever happens, these things will not change, and people will still want to move here. So if you live in an area that is growing in terms of incoming population, you might just make it through the next few years.
Taking care of Business?
Minneapolis may be in the Midwest, but unlike other failing Midwestern cities, Minneapolis has less of a manufacturing base, and has diversified in the way that has kept it going through current hard times. A number of corporations are based in and around Minneapolis, such as Target, General Mills and PepsiAmericas inc.
Look at the companies in your town. While nowadays it’s very hard to guess which companies are going to survive, and which won’t, if there are a number of stable corporations, you should be safe. Also, if like Minneapolis, your town has diversified, and doesn’t depend on just one industry (such as forestry or automobiles); this is also a good indication of a ‘safe’ place to buy.
Low unemployment is also an important factor. If the number of ‘positions vacant’ signs are larger than the amount of ‘for sale’ signs, you’re on to a winner.
No.place else to go!
Sprawling cities such as Sacramento allowed developers to build build build. However, New York and San Francisco are both places where there isn’t really any space to build extensively - which means that property still sells because people have to live somewhere, and less housing = more people who want to buy your condo.
Conservative building practices
While everyone may have been frustrated about strict building codes and practices in the past…you should now be running over to those city officials and kissing them all over. Why? Because cities with strict building codes will be more likely to recover from this recession. For the same reason as the space point above, people have to live somewhere, and if there are less places to buy, those that are for sale, sell.
A little note about foreclosures…
While foreclosures are more of a symptom, rather than a cause, the disease metaphor works because if your city is riddled with unemployment, a bad economy, and a lack of people moving to the area, you’ll see more foreclosures. So, unless you are looking to buy a foreclosed property (and there are plenty of good reasons for that), you might want to avoid areas with a high level of foreclosures.
In the end, we’re all trying to look for hope in this market. However, buying in areas where these things occur is always going to be a safer and more sensible way to buy real estate in the current market. Most of these points are common sense – but that may be the way in which we come out of this market – slow and steady wins the race. So buy smartly – which will help you to sell smartly in the future.
The views expressed on the blog portion of this site represent only the opinions of the author and may not necessarily be the opinions of Realestock.com