This has been the worst financial crisis since the Great Depression, with $4 trillion in home equity wiped out and millions of Americans losing their homes to foreclosure. But the market has stabilized except for the foreclosure rate, and in some places is rebounding. According to USA Today, you can breathe a sigh of relief. The worst is over. Where are the areas in the US with the best showing?
Northeast
In the Northeastern region, Pittsburgh has the strongest showing. The city saw less of a real estate bubble, so home values here did not plummet as fast or as far as in other areas. Pittsburgh also enjoys a lower unemployment rate of 7.7%.
While construction and sales are expected to rise, prices should remain pretty stable due to the number of foreclosures still pending. The Northeast, in particular Manhattan, suffered huge job losses and therefore a large number of foreclosures.
South
In the Southern region, the oil rich cities of Texas, Arkansas and Oklahoma suffered little in the housing bust. The rest of the region is making a very slow recovery.
Midwest
North and South Dakota, Iowa and Nebraska are leading the recovery in the Midwest. In Detroit, you can buy a house for less than a new car. But the rest of the region that is not so dependent on the auto industry is doing pretty well. Sales of new homes rose 38% in the first half of the year, and construction rose 86%. However, resale of homes has lagged behind. Unemployment remains a problem, and few unemployed people are going to be buying houses.
West
In the West, Las Vegas, very hard hit in the bust, is now booming again. Clark County saw 1 in 11 homeowners receiving foreclosure notices, and the market glut of deeply discounted foreclosures has resulted in a hot housing market. The same scenario prevails in California’s Riverside, San Joaquin and San Bernardino counties. The Northwest and Utah did not experience the steep decline seen elsewhere. And the Southwest was already in decline when the real estate crisis hit, so did not fall as much as other areas.
Whether the housing market continues to recover in the Western region depends primarily on employment. If more jobs are lost, the number of foreclosures will rise and the market will suffer.
Top five cities
In addition, the following 5 cities that were very hard hit in the real estate crash are expected to rebound within the next 3-5 years. These cities home prices fell 25%. or more Tacoma, Washington, just 32 miles from Seattle, enjoys a diverse economy with military, government jobs, and an international deep water port. Housing prices fell 24% to very affordable levels, and are expected to recover by 22% by the first quarter of 2012.
San Diego experienced a 42% drop in home values. With the strong tech and hospitality market and the incomparable climate, a 12% recovery is expected by 2012, and 25% by 2014. San Francisco, where prices fell 29%. This city is expected to pull out of the recession faster than the rest of the country because of strong job and population growth, and higher paying jobs.
Memphis, TN is positioned as a strong transportation hub. Though home prices fell 23% due to a large number of sub-prime mortgages, the foreclosure rate has slowed and those homes are being reabsorbed into the market. Prices are expected to rise about 9% by 2012. Worcester, MS also saw a 23% drop in prices but expects at least a 6% recovery by 2012 due to the economic benefit of several local colleges and medical schools, and a strong health services sector.
In these tough economic times, good news is certainly welcome. These markets show strong signs of recovery and new opportunities.
References and further information:
http://www.usatoday.com/money/economy/housing/2009-08-01-housingmarket_N.htm
http://realestate.yahoo.com/promo/10-hard-hit-housing-markets-that-are-ready-to-rebound.html