Thursday, October 23, 2008

Real estate to rebound in 10 markets

I am not the only one who is more sanguine on the outlook for the housing market. This is from Forbes:
Believe it or not, in the future people will be buying and selling homes. Some of them will even make a profit.

It's not so crazy an idea. Consider Albuquerque, N.M. The mid-sized Southwestern city has experienced housing price declines since a peak in the third quarter of 2007, job growth has been flat, and housing starts are expected to fade by 45% through the end of 2008. Nevertheless, it's a city that home builders and economists are bullish about for 2010 and beyond.

According to analysts at Moody's, Albuquerque's job growth through 2012 is projected at an average annual rate of 1.6%, fueled in large part by its low costs and local business expansion. Housing starts in the city are expected to reverse course in 2009, growing by 26.6%, according to the National Association of Home Builders (NAHB). This means builders have high hopes for 2010 and 2011, when those homes will be completed and on the market.

It's the same story in several other cities: more tough times to come in the short term, but potential for a recovery and a rise in prices in the long term.”
RW: Being bullish about a recovery means that prices had already stabilized by 2010 and are rising amid a stronger housing marker – a.k.a., a healthier market. All we need is a stabilization of home values prices, which are likely to occur mid 2009 or at least, “many months in the future,” from now (which could certainly be mid 2009) according to Alan Greenspan.

Forbes highlights bull opportunities for home building in 10 markets. If they are bullish about 10, then eventually, they will be bullish about 20, and then 30, etc. Housing will rebound, and there are signs out there that a stabilization will happen sooner than the well-reported later, 2010.

The 10 markets where home prices are likely to rise:

1. Albuquerque, New Mexico
2. Charlotte, North Carolina
3. San Antonio, Texas
4. Portland, Oregon
5. Austin, Texas
6. Salt Lake City, Utah
7. Colorado Springs, Colorado
8. Minneapolis, Minnesota
9. Atlanta, Georgia
10. Oklahoma City, Oklahoma

Rebecca Wilder


  1. Albuquerque is a fun place to live. There is affordable housing and someone in Rio Rancho used to have a camel in his back yard. aj

  2. Hi Aunt Jane,

    Love your anecdotes! They definitely didn't mention anything about camels in the Forbes article.


  3. He was an obstetrician if that has any bearing! aj

  4. Rebecca,

    I've been reading about Denver for some time now...that was one area where home prices never seemed to nose dive, and the housing market remained pretty healthy. Hmmm, no places in the North East huh? Interesting.

    I believe that the housing market will correct when home values correct (stop falling) and adjust to the movements in the market (unfortunately now most of all those movements have been bad). Unfortunately home prices have dropped drastically, but again it's dictated in correlation with the health and stability of other economic indicators. The only way I believe these housing markets will once again flourish is when other economic factors (jobs, consumer lending, spending, inflation) rebound as well.

    If Forbes is predicting these 10 housing markets will rebound, I'm willing to bet their other indicators will too.

  5. Hi nice to read it. can you send me detail about this?

  6. Hi Tim,

    Thanks for the comments! You said: “The only way I believe these housing markets will once again flourish is when other economic factors (jobs, consumer lending, spending, inflation) rebound as well.”

    I agree with you. A shrinking job market makes paying the mortgage (and obtaining a mortgage) more difficult. However, with the subprimers mostly already out of the market, one can only assume that foreclosure rates will start to decline in spite of falling incomes (since a large share of previous foreclosures were caused by delinquent subprime loans).

    Foreclosures are forcing fire-sale pricing and even with the building slack in the labor market, it seems that affordability is not the immediate problem – it’s the credit availability. But there is a huge stock of liquidity in the banking sector (the fed funds rate closed at 0.93% on Friday – well below the 1.5% target), and I do believe that those funds will find their way to potential homebuyers. And don’t forget members of Congress, who have made it their personal mission to mitigate foreclosure rates (and it will only grow after the election). This will help, too. Oh, you may like this related article:

    As always, thank you for your enlightening comments! Rebecca

    Hi property in Spain, you said “can you send me detail about this?”

    My information comes from the referred Forbes article, But continue to read Forbes because they are doing a lot of research in this area. For example, the produced a related article that may be of interest:

    Thanks for reading! Rebecca