Unheralded Outperformers: 10 Metro Markets That Are Leading the Housing Recovery
February 4th, 2013 | Forbes, Places & Spaces
Call them the unheralded outperformers that get almost no attention in the national media: Real estate markets where median home prices are affordable and rising much faster than the nation as a whole and where inventories of available homes listed for sale continue to plunge.
Iowa City, Iowa; Nashville, Tenn.; Boise, Idaho; Tulsa, Okla.; and Shreveport, La., aren’t exactly names that come to mind as leaders in the housing recovery, but they are. Sure, Detroit gets some press, but that’s probably because the city fell so hard and deep during the housing bust and is now clawing its way back.
Yet all the 10 metropolitan markets profiled below are statistical outperformers. They’re not as glamorous or glitzy as Chicago or New York City, but then again, median list prices in both of those cities have actually been falling.
So here are the unheralded top 10, based on data from the latest survey of conditions in 146 major markets by Realtor.com. For perspective, keep this in mind: For the past 12 months through December, median list prices in the US. were essentially flat (down 0.05 percent.)
1.Detroit. Just as it once was the foreclosure poster child of the bust and recession, Detroit is now the poster child of the rebound. List prices were up an extraordinary 12.37 percent year over year in December, according to Realtor.com. They were also the lowest of any major metropolitan area — just short of $90,000. Though the city is still struggling with a persistent unemployment problem — 11.4 percent — foreclosures are down by 31 percent for the year. People and jobs are moving back into the city, and it’s now experiencing a shortage of available listings — down 23.85 percent for the year. As a result, it takes just 70 days to sell a house after listing, far below the national median of 111 days.
2.Iowa City. A university town that describes itself as offering “big city amenities with small town hospitality,” Iowa City’s median list price for a home jumped by 11.8 percent in the past 12 months. Almost certainly that is linked to the city’s low unemployment rate of 3.6 percent and the fact that its top employers include major Fortune 500 companies such as Procter & Gamble, Lear and Pearson, the publishing and media giant best known for Penguin books and the Financial Times news group.
3.Boise. As Idaho’s capital city, Boise’s median prices are up 9.1 percent for the year, houses sell in a median 79 days, and they’re affordable— a $169,000 median price. Like other outperformers, unemployment is well below national norms — 6.2 percent — and the city is home for major employers, including Boise-Cascade wood and paper products, Morrison Knudsen engineering and Micron Technology.
4.Tulsa. Known for its low cost of living, Tulsa has a solid local economy based on aviation, manufacturing and transportation, plus an unemployment rate of 5.3 percent. The median house costs $148,900, up 6.47 percent during the past year.
5.Ann Arbor, Mich. A quintessential university town, Ann Arbor is the home of the University of Michigan, which employs roughly 30,000 local residents — 10 percent of the work force. Unemployment is just 5.1 percent. Median list home prices jumped by 6.25 percent last year, but are still affordable — $169,900.
6.Nashville. Though it’s best known as “the home of country music” and has many entertainment-based employers, Nashville’s real economic base is health care. About 250 healthcare-related companies are based in the city, including the largest private owner of hospitals in the world, HCA. Median list price was $194,900 in December — a 5.35 percent increase compared with the previous year.
7.Pensacola, Fla. Home base for the Pensacola Naval Air Station, this Panhandle city by the Gulf saw median list prices jump by 3.84 percent during the past year to $183,800. A diversified local economy beyond the military includes International Paper Co. and Gulf Power, among others. Unemployment is 7.8 percent.
8.Oklahoma City, Okla. Another university town with a super low (4.6 percent) unemployment rate, the metropolitan area’s median list price was just $155,000 in December, up 3.4 percent for the year. Major local employers include Chesapeake Energy, Dell and the Federal Aviation Administration.
9.Corpus Christi, Texas. This Gulf city’s relatively low cost of living, low unemployment (6.1 percent) and moderate housing prices ($165,000) have helped it grow real estate appreciation — up 3.18 percent during the past year.
10.Shreveport. Like all the other unheralded outperformers, Shreveport is affordable, has strong job growth (unemployment rate of 5.5 percent) and has seen its median list price for houses jump by nearly 3 percent during the past 12 months. The city forecasts another 1,500 new jobs to be added to the economy in 2013 — a good sign that the real estate market should remain vibrant.
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Ken Harney writes a nationally syndicated column on housing and mortgage issues, the Nation’s Housing, and has won numerous “Best Column – All Media” awards from the National Association of Real Estate Editors, along with the Consumer Federation of America’s prestigious “Media Service Award,” for lifetime contributions to consumer interests in housing. He served a three-year term on the Federal Reserve Board’s Consumer Advisory Council and is the author of two books on real estate and mortgage finance.