Morgan Brennan, Forbes Staff
Since Standard & Poor’s downgradedthe United States’ credit rating, the financial markets have ping ponged hundreds of points per day, dropping to 2008 levels only to inch back up. The July jobs report highlights a national unemployment rate still stubbornly fixed above 9%. Housing continues to flounder and millions of homeowners watch their home equity shrink further each month. None of this is reassuring news for Americans.
Yet a smattering of cities have managed to wrangle up the modest beginnings of a real estate rebound this year. Take Bay City, Mich., for example. It lands on our list of Recession-Resistant Cities For Real Estate. Despite a 9.9% unemployment rate, according to the Bureau of Labor Statistics, the Great Lakes Bay area has logged seven consecutive months of rising home values. The median home price for the area is $80,100 – an inexpensive price tag that also recently helped land Bay City on Forbes’ Best Places to Live Cheaply list.
“The Bay City market has stabilized and increased slightly over the past year,” explains Renee Harvey, a Saginaw, Mich.-based real estate broker with Keller Williams Realty. She says the average Bay City sale price last summer was $68,976; this year it was $69,108. Harvey chalks up the slight uptick to the local presence of corporate giants like Dow Chemical Company and the fact that lenders and Realtors in the area have been more effectively mitigating distressed properties: “We are selling more traditional properties and much fewer distressed properties.”
Bay City isn’t the only small- to mid-sized metropolis with a hopeful housing market. It’s joined by fellow Michigan metropolis, Battle Creek, with a 0.6% price gain in the first quarter and a 5.2% gain in the second; Pueblo, Colo., with a 2.5% price gain in the first quarter and a 5.5% price gain in the second; and Champaign-Urbana, Ill., with a 0.5% rise in the first quarter and a 1.2% rise in the second.
The folks at Zillow.com, a Seattle-based real estate data company, helped us compile this Recession-Resistant list. It reflects the 25 cities welcoming steady home price gains each consecutive month since the start of 2011. These are not places where the economy as a whole is necessarily rebounding; they are places where, regardless of unemployment rates and other economic woes, real estate markets are showing some positive improvement.
To calculate home prices in these cities, Zillow crunched numbers for 154 U.S. metro areas, accounting for home values on local single-family houses, condos, and apartments, at all price points. Using data through June of this year, median home prices, list prices vs. final sale prices on homes sold, price cuts on for-sale homes, tax assessment records, and local rental prices were all assessed for this list. Both homes that have graced the market in recent years and homes that have not were included. Foreclosure activity and its effect on non-distressed home values was noted, but foreclosures and bank-owned properties themselves were not included in the calculations.
There are some surprising results. Florida, one of the states to suffer most from the real estate boom and bust, contributes six cities to our list – more than any other state. “The Florida metro areas have really paid their dues, coming off quite a lot since 2006 in terms of home values,” explains Svenja Gudell, an economist at Zillow. “We are finally seeing those numbers start to stabilize.”
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