10 Housing Markets Where Prices Have Gone Up

yahoo Kiplinger.com ^ | Dec 16th, 2009 | Pat Esswein,

[BenLurkin]

The housing market is showing some signs of recovery. Sales are up and prices have stabilized after falling for three years. The ten metro areas that enjoyed the greatest home-price increases over the past year (through June 30, 2009) largely missed the housing boom and didn't indulge in subprime-lending excesses.

With no boom, these cities had no need to bust. Instead, their housing markets have plugged along at 4% annual price appreciation, below the national average of 6% annually between 1968 and 2008, according to the National Association of Realtors. Most of these areas are relatively small, with populations less than 200,000.

The number-one spot for home-price appreciation over the past year was Elmira, N.Y., where the economy puttered along through 2008 and avoided the recession longer than the rest of the country.

Texas makes a strong showing, with six cities in the top ten, reflecting the state's population and job growth in recent years, much of it related to strong energy prices.

All of these cities had a rate of unemployment less than the national average of 9.5% in October '09, according to the Bureau of Labor Statistics. Unemployment is one of the factors, along with affordability (the ratio of median home price to median household income), that Fiserv Lending Solutions factors into its home-price forecasts. Fiserv expects that home prices in these cities will flatten or grow only slightly through mid 2010, reflecting the shakiness of the larger, national economy.

1. Elmira, New York

2. Texarkana, Texas-Arkansas

3. Lake Charles, Louisiana

4. Odessa, Texas

5. Florence-Muscle Shoals, Alabama

6. Abilene, Texas

7. Waco, Texas

8. College-Station-Bryan, Texas

9. San Angelo, Texas

10. Great Falls, Montana

[jazminerose]

The increased demand in Texas makes sense as it’s becoming a huge refugee camp for Californians and other hi tax escapees.

But overall, don’t fall for it. We are seeing some price creep & a lot of sales activity in my area as well but it’s just another bubble triggered by the steep fall due to foreclosures & extension of the homebuyer tax credits.

Inventory is temporarily low in some markets so prices have crept up. In CA, lenders can’t foreclose anymore without jumping through an extra 90 days of hoops.

The next foreclosure tsumani is on its way & will drag the market down further: too many buyers are using FHA loans with looser standards & 3% down (mostly paid by sellers); strategic foreclosures as borrowers who could pay walk away when they figure out they’re well over 50% upside down & more unemployment foreclosures.

[G Larry]

Wouldn’t trade my place in the Denver suburbs for any house in any of those places!

[Ditter]

Waco is a nice town, not sure I’d want to live in those Texas towns that are farther west.

[McLynnan]

Abilene seems okay, several institutes of higher learning plus the air force base. I sold my home in a Waco suburb last June for my asking price without a realtor. It was only on the market three weeks before it went under contract. You don’t see big jumps in value here, rather slow and steady increases. All in all I was happy with about a 20% increase over a five year period.

[Ditter]

I am a Houston native and have only passed through those other cities. West Texas is bleak and depressing no matter if the towns are nice. I love the Texas hill country and Big Bend but everything in between is awful to look at.