For most, having the ability to go back in time would be a dream. For real Estate however, it’s a nightmare. As of January, 2009 (see chart 1) we are now officially back to 2004 home prices. Any gains made during the housing bubble were given back in the last two years. Areas defined as the Sun Belt – Arizona, California, Florida and Nevada – that had the largest run-up in prices since 2000 have also been the hardest hit in the downturn. While also in decline, other regions have fared far better on a relative basis. New York and Washington DC, are two metro areas that, while experiencing fairly healthy growth during 2004-2006, have not given back nearly as much as the Sun Belt. Markets such as Boston, Charlotte, Cleveland, Dallas, and Denver that never saw the large double-digit price increases during the same 2004-2006 time period, are not currently experiencing double-digit declines.
“It’s the economy, stupid” and for builders in the SunBelt 2008 was a painful year. Adding insult to injury the SunBelt, the epicenters of the housing bubble, are also the markets whose job markets also saw the largest declines in 2008. According to the Milken Institute who ranks U.S. metropolitan areas by how well they are at creating and sustaining jobs and economic growth. The top five “best performing cities” were- Provo UT, Raleigh NC, Salt Lake UT, Austin-Round TX, and Huntsville AL. On the plus side for the SunBelt Orlando Florida was ranked 11th. Other best performing Florida metros include: Ocala, Pensacola, Gainesville, and Jacksonville. Panama City and Fort Walton were listed as the top two small metros.
By: Brian Kennedy
