Inman News examined housing, economic and demographic data for metropolitan areas nationwide in compiling a list of 10 housing markets that are showing signs of strength and may outperform other housing markets in 2011 in several key metrics. Inman News also asked a host of real estate search and data companies to share research and methodology to identify high-performing real estate markets across the U.S.
Real estate markets in the Midwest and Northeast dominated a list of 10 fast-rising real estate markets nationwide identified in the Inman News analysis, as many markets in the Sun Belt states are still struggling through the housing downturn.
The Midwest and Northeast U.S. accounted for eight of 10 markets on the list: Bismarck and Fargo, N.D.; Des Moines, Iowa; Bloomington-Normal, Ill.; Elmira and Buffalo-Niagara Falls, N.Y.; Portland-South Portland-Biddeford, Maine; and Burlington-South Burlington, Vt.
The other two markets on the list: Kennewick-Richland-Pasco, Wash.; and the Washington, D.C., metro area.
Nationwide, unemployment is high, home prices are flat and trending lower since the expiration of the federal homebuyer tax credits, and overall sales fell last year compared to the prior year.
Stan Humphries, chief economist for Zillow, said it’s unlikely that "substantial price appreciation" will occur "in any market nationwide in the near term." Rather, the company identified some "stabilizing" markets in a chart provided for this report.
"Nationally, I don’t think we’ll see a bottom in home prices until later this year and once they hit bottom we’re looking at a prolonged period of time where housing appreciation is below historical norms," Humphries said.
Nevertheless, Inman News identified some markets with significant price appreciation as well as a vibrant job market, a high level of home affordability, low foreclosure activity, and other indicators for a healthy housing market. Most have populations below 250,000. In addition, jobs in the health care industry and public sector, especially, buoyed employment in these areas.
To compile the list, Inman News considered markets with low unemployment rates, high median sales price growth, growth in the number of building permits issued, a rise in in-migration from other states, population growth, projected job growth, affordability, low foreclosure activity, median household income growth, fewer average days on market for for-sale properties, and growth in occupied housing units.
Among the findings in this report:
- Of the states represented in this list of market areas, North Dakota, Vermont, Iowa and, to a certain extent, New York, also shed fewer Realtors during the housing bust compared to other states.
- Two of the 10 markets on this list are state capitals and one is the nation’s capital — agents say government centers can lend job stability.
- Six of 10 markets had median sales prices below the national median in the fourth quarter of 2010, and seven out of 10 had median prices lower than the national median price for the full year in 2010.
- Where affordability rankings were available, the markets on the list had no less than 75 percent of homes affordable to those households earning the area’s median income.
- All had unemployment and foreclosure rates lower than the national average. None of the markets had unemployment rates higher than 8.2 percent.
- Only two of the markets had populations above 1 million. Six of 10 had populations below 250,000.
- Companies in the health care and medical industries were major employers in at least seven of the 10 markets.
- Seven out of 10 markets had some military presence. The Fargo, Burlington, Portland and Des Moines metro areas are each home to an Air National Guard base. The North Dakota National Guard Headquarters are in Bismarck. There’s an Air Reserve Station in the Buffalo market.
- Not surprisingly, the Washington, D.C., metro area had the largest military footprint of the 10 markets: the Pentagon, Bolling Air Force Base, Fort McNair, Walter Reed Medical Center, Marine Barracks and Washington Navy Yard are within its limits.
The 10 markets are ranked according to population, sales volume, and median sales price appreciation. Population was weighted most heavily in the rankings, followed by sales volume in proportion to population and rate of price appreciation.
1. Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.Va.
2. Buffalo-Niagara Falls, N.Y.
3. Des Moines, Iowa
4. Portland-South Portland-Biddeford, Maine
5. Kennewick-Richland-Pasco, Wash.
6. Fargo, N.D.-Minn.
7. Burlington-South Burlington, Vt.
8. Bloomington-Normal, Ill.
9. Bismarck, N.D.
10. Elmira, N.Y.
- 2010 top 10 most searched real estate markets (Realtor.com)
- Top 10 states with shortest days on site: for-sale properties (Realtor.com)
- Top 10 fastest-moving markets on site in 2010 (Realtor.com)
- Top 10 MSAs: Fastest-rising median list prices in 2010 (Realtor.com)
- Inventory counts: MSAs with the fastest falling inventory counts in 2010 (Realtor.com)
- 2010 fastest-rising median list prices (Realtor.com)
- Markets with low price-to-income ratios (Zillow.com)
- Markets with low delinquency rates: November 2010 (CoreLogic)
- Markets poised to outperform in 2011 (Altos Research)
- Sales volume per population, Q4 2010 (Onboard Informatics)
- Percent change in sales, Q3 2010-Q4 2010 (Onboard Informatics)
- Percent change in median price, Q3 2010-Q4 2010 (Onboard Informatics)
- Top 10 U.S. markets for buying and investing in 2011 (RealtyTrac)
- Top 10 cities to buy vs. rent (Trulia)
- Top 10 cities to rent vs. buy (Trulia)
- Fastest-moving for-sale markets, January 2011 (HotPads)
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