Top Cities Unaffected By Recession

November 24, 2009

Some U.S. cities with stable housing and diversified employment have been virtually untouched by the Great Recession.

Analysts say cities that are most likely to leave the recession in the same or better condition than they started it are those where home prices didn’t fluctuate wildly, which spared them the devastating effects of foreclosure, lost jobs, and lost productivity.

If there is a lesson to be learned, experts say, it is that families looking for long-term economic stability should settle in locales with diverse employment and minimal shifts in housing values.

To identify these cities, Forbes magazine ranked the 100 largest Metropolitan Statistical Areas by employment rates, the conventional mortgage home price index, and the average days on the market for properties currently for sale.

The top cities on Forbes list were:

Omaha/Council Bluffs, Neb.
San Antonio, Texas
Austin-Round Rock, Texas
Pittsburgh, Pa.
Harrisburg/Carlisle, Pa.
Dallas/Fort Worth, Texas
Rochester, N.Y.
Houston, Texas
Raleigh/Cary, N.C.
Baton Rouge, La.

Lone Star Luck
In No. 2 city San Antonio, home to four military bases, and Austin, our third-ranked city and the state seat of government, municipal jobs supplement Texas’ robust energy sector. In Dallas (No. 6), it’s a thriving tech industry that buffers it from energy highs and lows. Although Houston No. 8 is invested mostly in oil, it has diversified its energy industry beyond oil rigs into refining and chemicals manufacturing.

What’s more, the state’s housing prices never ascended to the unsustainable levels the rest of the country hit at the peak of the housing bubble. Thus, it didn’t crash as hard. These factors have toughened the local economy against a recession that is inextricably tied to real estate.

“Texas didn’t have as big of a boom,” says James P. Gaines, research economist at the Real Estate Center at Texas A&M University. “So we’re not having anywhere near the kind of bust.”