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According to MSN.com

Only four southern regions are ranked among the top ten housing markets according to MSN.com.


10 bubble blowers -- appreciation should continue to grow


Boise, Idaho: Besides having a happy-sounding name, Boise is consistently mentioned as a small, but strong real estate market. Forbes magazine ranked it first on its 2005 list of the best places for business and a career; John Burns Real Estate Consulting puts it almost at the bottom of its list of markets headed for a potential housing bubble.

John Schleimer, a real estate market consultant to major builders, says that both Boise and parts of the Idaho Falls panhandle will "hold up very well" housing appreciation-wise.

"They're getting a migration of people fleeing the blue states," he says. Annual housing price increases have been a modest, but steady 4% to 6% over the past couple of years, with a significant -- but not out-of-proportion -- increase of 14% in the last quarter of 2005.

El Paso, Texas: Real estate market watchers have noted for some time now that Texas is a value buy. Local Market Monitor recently released a listing of overvalued and undervalued markets. Four of its 10 undervalued markets were in the Lone Star State, with El Paso the most undervalued market in the nation (the other undervalued Texas markets were McAllen, Dallas-Fort Worth and Houston).

"If I was an investor in real estate -- and I'm not -- I'd carefully consider Texas markets," Winzer says. "They had a big boom and bust about 10 years ago. They're at the end of that. They haven't been great markets for awhile, but quite likely, as economies improve there, people will move there, especially since prices are relatively modest."

Fortune ranked El Paso third on its list of markets set for strong appreciation in the next two years; another Texas market, San Antonio, was first.

Albuquerque, N.M.: This is another city at the bottom of John Burns Real Estate's Housing Cycle Barometer, a measurement of cities that are susceptible to a housing bubble. It's also high on Fortune's list of markets that should experience growth in the next two years and had a healthy increase (18% according to the NAR) in 2005. Locals say the area attracts Californians trying to escape high housing prices; once they discover the mild year-round weather, they don't want to leave.

Seattle, Wash./Portland, Ore: The overall news out of the Pacific Northwest isn't great. The area lost jobs in the tech bust and is still recouping. But in terms of housing price appreciation, the thing these cities have going for them is a restriction in supply. Tight controls on development have prevented the normal progress of builders going farther out from the city core to find cheap land in the suburbs. Hence, demand stays high for available units. (Forbes Magazine lists Seattle as the most overpriced place to live in the country; Portland was third on the list.)

"Portland and Seattle have really benefited from California's growth," says Richard Gollis, principal of San Francisco-based real estate consultants The Concord Group. "Portland is starting to see the next generation of housing product, which is large-scale, high-density projects in downtown. The same thing is happening in Seattle. People who moved there 20 years ago for the tech market are older now and have a different lifestyle."

Salt Lake City: Nothing drives housing like a stable economy and job growth. Salt Lake City has both. Job growth is up about 4%, unemployment is low, the housing costs-to-income ratio is moderate and Utah builders give buyers a lot of house for the money. Local Market Monitor reported an 11% increase in appreciation in the market between 2004 and third-quarter 2005, and Money magazine ranked it 20th on its list of 100 markets for growth over the next two years.

Raleigh, N.C.: This city is right in the middle of the region that appeals to what real estate market consultant Schleimer calls the "halfbacks." Those are people from northern states who moved to Florida, didn't like it and then moved back, but only halfway. The halfback region includes Georgia, the Carolinas, parts of Mississippi and Tennessee. The seasons are more like what they were used to up North, without the harsh winters, and they're closer to friends and family. John Burns Housing Cycle Barometer has Raleigh dead last on its list of markets that are susceptible to a housing bubble, and the NAR shows a healthy appreciation of 7.4% between 2004 and 2005. The median house price of $185,200 is well below the national average of $213,000, giving it nice room to grow. Fortune predicts the region will do just that, by about 5% per year over the next two years.

Philadelphia: Major northeastern cities may be the least expected on a list like this, so we were somewhat surprised to see Philadelphia show up in a favorable position on several reports. The NAR quarterly report showed a 12% increase in appreciation between 2004 and 2005, high enough to encourage people to buy homes, but not at such a dizzying rate as to spark panic purchases. The housing-cost-to-income ratio, at 31%, is quite favorable compared to other large northeastern cities (53% in Washington, D.C., and Newark, N.J., and 72% in New York City) and while job growth is small, it's moving in the right direction.

Atlanta: Home to several major corporations and the country's busiest airport, Atlanta also is the second-largest housing market in the nation. Housing prices have enjoyed steady appreciation without the skyrocketing increases that have pushed other large markets toward a bubble. Commuters who have tired of long commutes have sparked resurgence in in-town development close to transit; the mixed-use development Atlantic Station has gained national attention as a true urban village with easy accessibility to jobs and cultural activities in downtown. Fortune predicts about 4% growth in values for the next two years.

Little Rock, Ark.: Surprised to see Little Rock on this list? If so, join the club. It's not exactly on a lot of radar screens as a hot real estate market. But it popped up in a favorable way on just about every ranking related to housing appreciation, from the NAR's note of a very respectable 7.7% change from 2004 to 2005 to Fortune's prediction that that kind of increase should hold fairly steady for the next two years. Local Market Monitor positions it as one of the most undervalued markets in the country. At an average price of $155,900, housing there is running a good 17% below where it could be, Winzer says, making it a great value.

Cincinnati, Ohio, and Birmingham, Ala.: These two were too close to call. The NAR's median price appreciation list gave a clear nod to Birmingham (4% increase from 2004 to 2005, to Cincinnati's 0.7%), but Cincinnati kicked its butt on the Housing Cycle Barometer that predicts a market's susceptibility to a housing bubble. (Cincinnati was 30 spots lower on the risk assessment.) Pricing in both markets is running about 12% under what the experts say it should be, giving them both plenty of room for nice, steady growth. The forecasters see that in the future for both markets.
 

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Glad to see Raleigh moving forward at a normal pace. I would hate to see the bubble bursting because of overpriced real estate prices. I wish the condominiums built downtown could follow the same direction with the rest of the city, but I am afraid we'll have a few bumps there. Otherwise, I am happy for my place of residence :)
 

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i know, personally, a shitload of people buying houses here, in the 'Ham...and most of those houses are closer to the core city than the suburbs. yay us!!!

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p.s. even though i'm moving...hopefully they'll rennovate my place to the luxury condo it deserves to be :)
 
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