Despite a National Downturn, Some Markets That Missed the The Housing Boom Are Thriving; Fleeing Florida for Charlotte
The housing news isn't all grim. Even as prices sag nationwide, there are several cities in the country where home values are climbing smartly.
Portland, Ore., Boise, Idaho, Seattle, Salt Lake City, Houston, Austin, and Charlotte and Raleigh, N.C., are among the cities bucking the national trend. Homes' appreciation there between the fourth quarters of 2005 and 2006 far exceeded the national average of 5.9%, according to the Office of Federal Housing Enterprise Oversight. In some markets, like Boise and Seattle, the appreciation jumped well into the double digits.
Local
"All real estate is local, despite the headlines," says Lawrence Yun, the senior economist for the National Association of Realtors. Nationwide, the median existing-home price fell 1.3%, to $212,800 in February from $215,700 in February 2006, according to preliminary NAR statistics.
There's no single secret of these cities' apparent success, but many of them missed the housing boom of the past five years. From 2001 to 2005, annual appreciation in these cities was between 2% and 5%, far slower than the 7% to 12% national average, according to the Office of Federal Housing Enterprise Oversight. (OFHEO calculates appreciation based on repeat sales or refinancings of the same single-family properties.) Now, prices are playing catch-up.
Industry and Education
Most of the cities also have one or more strong industries to drive their economies -- colleges and technology in Raleigh, banks in Charlotte, energy in Houston and aerospace in Seattle. And all have education levels above the national average.
These cities emerged from the last recession later than most of the country for various reasons, including the lagging technology, aviation and energy industries, says Mark Zandi, CEO of Moody's Economy.com. Now, their economies are strong and housing prices are still perceived as affordable, luring buyers into the market. For instance, the median sales price for a single-family home in the area of Austin-Round Rock, Texas, is $173,700, according to the National Association of Realtors, compared with $371,200 in the Miami-Fort Lauderdale-Miami Beach area.
So many Northeasterners who moved to Florida have resettled in the Charlotte area in recent years -- both workers and retirees -- that Henry Scala and others in Charlotte refer to them as "halfbacks."
The influx may have helped Mr. Scala when he moved across town in January. "I was faced with selling this house in theoretically a down market," the 36-year resident of Charlotte says. "But there was no down market in Charlotte." Charlotte-area house prices grew 9.09% from the fourth quarter of 2005 to the fourth quarter of 2006 -- the fastest appreciation the metro area has seen since 1982, according to OFHEO. Mr. Scala got his $800,000 asking price in four days.
Today's declining prices nationwide are in part the result of an earlier explosion of short-term investors in Florida, California and other booming markets. Recently, both investors and long-term homeowners have been cashing in or cutting losses in formerly hot markets and settling in areas that avoided the boom, such as the Carolinas, parts of Georgia and Tennessee, areas of Texas, the Western mountain states and the Pacific Northwest.
"We're cutting and running," jokes Mark Hoover, 47 years old. Mr. Hoover and his wife, Melissa, 35, are both in the mortgage business, and they are moving from Florida to Austin to work for PRO-30, a mortgage lender based in Novato, Calif. But the Hoovers' move hasn't been easy. Their vacation home in Wellington, Fla., near West Palm Beach, has been on the market since October with a price tag of about $900,000, and their $1 million-to-$1.5 million primary home outside Fort Lauderdale, Fla., has sat since February.
