real estate, as you might have heard, location is everything. Itâ€™s relatively straightforward to figure out which neighborhood in a particular town is the
right location, location, location for your needs - schools, character,
proximity to amenities and things like crime rates and commutability
render a given neighborhood more or less of a good fit for a given home owner.
But how can you tell which cities you should feel optimistic about in the coming year? Â
Itâ€™s all about the fundamentals, folks.
sat down with Truliaâ€™s Economist, Jed Kolko, and asked him for his
short list of spots across the country that he projects will be the
healthiest housing markets in 2013, and for his rationale behind picking
the cities that made the list. Kolko explained: â€œThe
healthy markets that made the list have strong job growth (Bureau of
Labor Statistics), which bodes well for housing demand; low vacancy
rates (U.S. Postal Service)â€“low enough to encourage new construction,
but not so low that inventory and sales are restrained; and low
foreclosure inventory (RealtyTrac), since foreclosures tend to hold back
that Peabody MA refers to the Essex County metropolitan division, which
includes the suburbs north of Boston, with a population of 740,000.
Kolko elaborated: â€œOf these 10,four
are in Texas (Houston, San Antonio, Austin, and Fort Worth); two are on
the West Coast (San Francisco and Seattle); two are northeastern
suburban metros (Bethesda, next toWashington DC; and Peabody MA, north of Boston);
and Omaha and Louisville round out the list. These arenâ€™t necessarily
the markets with huge price gains going into 2013, but they have strong
fundamentals. For instance:
Interestingly enough, Kolko went on, â€œrising prices were not included as part of our definition of healthy local housing markets. Many of the markets with the largest price gains in 2012 were rebounding from huge price declines during the bust, but they still have weak fundamentals, such as high vacancy rates, large foreclosure inventories, or slow job growth. For instance, Las Vegas and Phoenix both have high vacancy rates and large foreclosure inventories going into 2013, despite having year-over-year asking-price increases of 14% and 27%, respectively, according to the November Trulia Price Monitor. And Detroit has a sky-high vacancy rate and is suffering job losses, even though asking prices in Detroit rose 10% year-over-year."
"Just as losing lots of weight might be part of an unhealthy cycle of yo-yo dieting, big price gains arenâ€™t necessarily a sign of a healthy housing market if theyâ€™re being driven by a post-crash rebound, rather than solid fundamentals. Thatâ€™s why Las Vegas, Phoenix, and Detroit arenâ€™t on the healthiest-markets list for 2013.â€ And
he didnâ€™t stop there - Kolko went on to call out a whole list of what
will be IN and OUT in real estate in 2013. Get up to speed on this year's predictions, here.Â ALL:Â What do you hope to see happen in the housing markets this year? What about in your local market?