There's no doubt that the great real estate bust of 2008 has left a dent on the way America does business. Today, however, the housing market is not entirely in shambles. Economists across the country have reported steady increases in market activity. Here at Manhattist, where we specialize in foreign investment in real estate, we've been working with scores of new international clients, most of whom have taken interest in New York property after the market seemed to have bottomed out. On the heels of my last blog-post about compelling reasons why you should invest in real-estate, I'll present to you today a few regions across the nation you should watch out for. It's important to keep updated on market trends and the rise and fall of prices. According to Moody's Analytics, these areas are the slowest appreciating markets in the nation. The projections are based on the relative growth in income, employment and population over the next decade.
1. Virginia Beach, VA: With its low crime rate, strong school system and famous shoreline, it's no wonder U.S. News in 2009 named Virginia Beach one of the best places to grow up. The area may be a less enticing place for investors or new home-owners, however. According to Moody's Analytics, real estate values in Virginia Beach will increase an average of 1.1 percent a year from 2010 to 2020, significantly below the national average. Why? Blame the wonders of economics. Though home prices in the area were popular during the housing boom, the market didn't actually experience a subsequent crash.Since prices didn't plummet, the market won't get the rebound that harder-hit areas will experience in about 10 years.
2. Miami, FL: During the housing boom, sunny Florida became a destination for the masses. Easy credit and competing investor demands led to housing prices doubling between 2002 to 2006. But Miami, where the majority of activity occurred, took one of the biggest blows of the crisis, causing homes to drop to even about 48% of their peak values. The problem? The market there shows no sign of bottoming out until about 2012, so recovery must wait until after then. Even if the area does rebound, economists project a slow 1.1 percent growth in appreciation values from 2010 to 2020, again, well below the national average.
3. Nashville, TN: During the housing boom in the earlier part of the decade, Nashville's rate of appreciation was comparatively slower than its peer cities. While this means that it's decline won't be terribly deep or dramatic, it also means that its rebound won't be either. Its 10 year annualized growth rate is projected to be 1.2 percent according to Moody Analytics.
4. Austin, TX: Austin suffers from the same fate as Nashville. Because its home-prices didn't surge during the boom, it will ride the bust but will be unable to appreciate strongly. Real estate values are expected to increase about 1.3 percent per year.
5. San Antonio, TX: Like the other southern cities on this list, San Antonio did not suffer too great of a price increase or price bust, which means that there's not much momentum for a rebound. It is expected to appreciate about 1.4 percent per year.
The projected national average growth is expected to be 3.1 percent annually.
--Raj Persaud
[Moody's Analytics, Chicago Tribune]
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