Mobile Housing Market Tops National List
Wednesday, Jun 01, 2011
- Friday, Jun 01, 2012
Housing Markets That Will Rise Most This Year
Housing has dropped more than 50% in many areas in the US, and there are few regions where prices are off less than 25%. Most housing experts do not believe the market will recover this year. Almost a quarter of all mortgages are underwater. People cannot sell the homes tethered to them without paying money to their banks at closing. The mortgage default rates in many states continue to rise, degrading the value of the homes near those seized by banks. Banks have a “shadow inventory” of foreclosed homes which they have not put on the market. When they do, they will be offered at steep discounts to get them off bank balance sheets. And the blight of unemployment has and will continue to keep the housing market weak.
24/7 Wall St. looked at data from Fiserv Case-Shiller which gathers and analyzes housing information. We looked at the drop in home prices by metropolitan area, when home prices reached their lows, vacancy rates, the median income and unemployment rates for each metro area, and how much Case-Shiller projects prices will rise this year and next. Thirty-seven metro areas have home prices that are expected to increase more than 1% this year – a modest number compared to the 385 markets.
Read The Housing Markets That Will Rise Most This Year
The twelve cities in which home prices will rise the most in 2011 are divided into two categories. The first are cities in the Northwest which have largely white populations, stable middle classes, and one or two industries that dominate employment. Some of these cities are remote, but large for their regions such as Idaho Falls, Cheyenne and Spokane. They are business and agricultural hubs for thinly populated areas which may stretch several hundred miles. This means that most have large distribution centers, universities, and research and medical centers which serve very large geographic areas. If Cheyenne were near Chicago, most of its major businesses would relocate downtown. The other factor that is common among many of these Northwest cities is that they have large military bases or defense contractors. These cities are prized by their residents for stability, homogeneity, and that they are dominated by a few industries which have been healthy over the last few years.
Four other cities on our list have been less fortunate economically. They are examples of what Case-Shiller describes as a change in the ability of people to buy homes. “The slide in prices has greatly improved home affordability: relative to household income, affordability is at or close to pre-bubble levels in nearly every metro area across the U.S,” the research firm says. A fine example is Madera-Chowchilla which is at the heart of the unemployment Bermuda Triangle in California which includes Stockton and Modesto. Parts of this region have had unemployment rates above 15% and some cases 20% brought on by the collapse of the housing market. Home prices in some parts of this area have halved, and, in the process, they have slowly become affordable for the limited number of people who can afford them. Home prices have started to rebound from ludicrously low levels.
If the 24/7 Wall St. review of The Housing Market The Will Rise The Most This Year shows anything, it is that two kinds of real estate markets are rebounding. The first of these was always stable, but was hurt by the recession. New jobs in these regions have brought renewed buying. The second, wild cards of the real estate recovery–a very different group–will recover because the collapse of prices has been so severe that the cost to buy a home is at decades-low levels.
And ranked #1.....
1. Mobile, Alabama
> Projected Price Increase Through 2011: +8.4%
> Unemployment Rate: 10.4%
> Median Family Income: $50,800
> Vacancy Rate: 11.1%
> Drop From Peak: 23.6%
Founded in 1702, Mobile is a major regional center for art, and features an opera, a ballet, and several art museums. The city has a long-standing, stable population, which will make room for an easier recovery than cities with migratory populations. Mobile is the largest city in the gulf region between St. Petersburg, Florida, and New Orleans. It saw some of the worst effects of both Hurricane Katrina and the BP Oil spill. As the impacts of both these disasters begin to subside, housing values have started to recover, and are projected to improve 8.4%, the fastest growth of any region in the country, by 2011. Home prices are projected to rise the following year an additional 7%, above the expected national average of 1.8%.
Read more: Housing Markets That Will Rise Most This Year - 24/7 Wall St. http://247wallst.com/2011/05/11/housing-markets-that-will-rise-most-this-year/#ixzz1O33Z3zb7