What Downturn? Some U.S. Markets Show Steady Growth
See? The housing market news isn’t all grim.
Even as home mortgage activity sags and prices sink nationwide, there are several cities in the country where home values are climbing smartly.
Portland, Ore.; Boise, Idaho; Seattle; Salt Lake City; Houston; Austin, Texas; and Charlotte and Raleigh, N.C., are among the cities bucking the national trend.
Homes’ appreciation there between the fourth quarters of 2005 and 2006 far exceeded the national average of 5.9 percent, according to the Office of Federal Housing Enterprise Oversight (OFHEO).
In some markets, like the Boise and Seattle housing market, the appreciation jumped well into the double digits.
In the same period, by comparison, many metro markets in Florida have sagged. Florida mortgage declines and real estate losses, in fact, helped fuel a number of the housing markets showing an upswing.
“All real estate is local, despite the headlines,” says Lawrence Yun, the senior economist for the National Association of Realtors.
Nationwide, the median existing-home price fell 1.3 percent, to $212, 800 in February from $215, 700 in February 2006, according to NAR statistics.
There’s no single secret of these cities’ apparent success, but many of them missed the boom of the past five years. From 2001-2005, annual appreciation in these cities was between 2-5 percent.
That’s far slower than the 7-12 percent national average, according to OFHEO. Now, home loan activity remains strong and home prices are catching up.
Most of the cities also have one or more strong industries driving the economy: Colleges and technology in Raleigh, banks in Charlotte, energy in Houston and aerospace in Seattle.
And all have education levels above the national average.
So many Northeasterners who moved to Florida in search of warm weather and cheaper home mortgages have resettled in the Charlotte area in recent years - both workers and retirees - that Henry Scala and others in Charlotte refer to them as “halfbacks.”
The influx may have helped Scala when he moved across town in January.
“I was faced with selling this house in theoretically a down market,” the 36-year resident of Charlotte says. “But there was never a down market in Charlotte.”
Today’s declining prices nationwide are in part the result of an earlier explosion of short-term investors in Florida, California and other booming markets.
Recently, both investors and long-term mortgage holders have been cashing in or cutting losses in formerly hot markets and settling in areas that avoided the boom, such as the Carolinas, parts of Georgia and Tennessee, areas of Texas, the Western mountain states and the Pacific Northwest.
The growth of Portland, Salt Lake City, Boise and Seattle can be attributed in part to an influx of former Californians and people opting out of the slumping Las Vegas or Phoenix housing market.
The trend may have created smaller echo booms - especially in Boise and Salt Lake City - which have slowed in the past several months, with each city experiencing a slow winter.
Other areas, too, have experienced faster-than-average appreciation, including the New York City borough of Manhattan and New Orleans.
SOURCE: St. Petersburg Times