Homebuyers who want moderate, steady price growth and equity can avoid the up-and-down cycles that plague some real estate markets by heading west, according to SmartAsset, a technology company that uses financial modeling to power advice on major financial decisions.
“Home appreciation is generally considered a good thing. It means more equity for homeowners, and a bigger payout when the time comes to sell,” SmartAsset said.
“But as we learned during the financial crisis, when home values grow too quickly, a boom can quickly turn into a bust. That can lead to vanishing equity, underwater mortgages, foreclosures and a lot of unwanted stress for everyone who owns a home.”
The company analyzed home price data from the Federal Housing Administration in 358 of the largest urban markets going back to 1990, and found that half of the top 10 housing markets with the most stable growth over the last quarter century are located in the West.
Colorado, Texas, North Dakota, Wyoming and Montana all ranked on SmartAsset’s top 10 list of the most stable housing markets.
The list’s leader, Boulder, Colorado, has experienced an average of 4 percent home price growth over the past 25 years, SmartAsset said. During that time, home prices have never once seen a decline of more than 5 percent in Boulder — not even during the national foreclosure crisis.
“That stability means homeowners in Boulder have been spared the stress of a plummeting market while still reaping the benefits of price appreciation,” SmartAsset said.
Also making the list were:
- Austin, Texas, where home prices have increased 242 percent since 1990.
- Bismarck, North Dakota, where the unemployment rate is under 3 percent, foreclosures are low, and price declines are minor and short-lived.
- Midland, Texas, an oil town that has managed to escape the boom-and-bust periods of other oil towns.
- Casper, Wyoming, which has experienced significant population and economic growth in the past 30 years.
- Anchorage, Alaska, which has remained largely untouched by housing market swings that have affected the lower 48 states.
- Billings, Montana, whose unemployment rate never exceeded 7 percent and homeowners had 0 percent odds of seeing their home value decline by 5 percent.
- Walla Walla, Washington, whose economy has been bolstered by the local winemaking industry and where home prices have grown nearly 30 percent since 2005.
- Odessa, Texas, where home prices are more than triple what they were in 1990.
- Houma-Thibodaux, Louisiana, where, despite suffering setbacks after Hurricane Katrina and the recession, home prices declined by just 2.5 percent from their peak at the beginning of the crisis to their low point.
Other cities in these states ranked on SmartAsset’s total list of 30 states with stable housing markets. Colorado, Louisiana, Alaska, Wyoming, Montana and Washington all reappeared on SmartAsset’s full list.
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