The Healthiest Housing Markets for 2009
February 17, 2009
With most economists and builders expecting a national market decline this year, this may not seem like the best time to be selecting the “healthiest” markets in the country. Virtually every market was down last year. But a close look at the numbers reveals that some markets have way outperformed others during the last four years and are likely to continue to do so this year.
When the housing market stages its official recovery, the markets listed on the following pages are likely to lead the parade. It may take a year or more for the weakest markets–where burgeoning foreclosure sales are still pounding new home values, making building and selling new homes an exercise in futility– to finally stage a turnaround. We’ll present that list next week.
The healthiest markets have many things in common. Most of them are great places to live, either close to the ocean, mountains, or major universities. Most of them didn’t have a huge run-up in prices during the boom and aren’t experiencing rampant deflation during the bust.
To compile these lists, we analyzed the top 75 housing markets in the country. We ranked them based on population trends and job growth, perennial drivers of housing demand. We also examined what’s happened with home prices; many of the healthiest markets have managed to hold the line on home values. And finally, we considered the rate building permits, which may be the single best ongoing indicator of builder confidence in a market. We combined all these metrics to produce a score for each market. Here are the top 15, in reverse order.
15. Myrtle Beach, S.C.
14. Wilmington, N.C.
13. Charlotte, N.C.
12. Denver, Col.
11. Nashville, Tenn.
10. Washington D.C.
9. Fayetteville, Ark.
8. Indianapolis, Ind.
7. Seattle, Wash.
6. Raleigh, N.C.
5. Dallas, Texas
4. San Antonio, Texas
2008 total building permits: 10,261
San Antonio is another Texas market that is still adding jobs, about 15,000 last year. A city of more than 2 million people now, its population is also growing, at a 2.8 percent annual clip through the third quarter of last year. Existing home prices are barely declining in San Antonio, down only 1.8 percent in the last year, leaving the median price of an existing single-family home at an affordable $154,400, 25 percent below the national average of $200,500, according to the National Association of Realtors. The upper end of the housing market was hurt recently when AT&T announced it would be moving its corporate headquarters to Dallas.
3. Fort Worth, Texas
2. Austin, Texas
1. Houston, Texas
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