Ah, prognostication. It's a time-honored
profession and one that's hard to beat in terms of job
security. In what other profession can you get it wrong
half the time and still be considered pretty good at
what you do? If "Bob in accounting" had that
kind of track record, he'd be out on the street before
the second-quarter earnings were revised. But prognosticators
can't possibly be faulted for not knowing what hasn't
All of this is a fitting introduction to our forecast
of the changing real estate market in the U.S. over
the next few years -- 10 markets where housing prices
and values will continue to remain strong, 10 markets
where appreciation will pretty much top out and the
10 markets that are most likely to experience a decline.
We talked to experts, studied public and private databases,
analyzed market trends and examined the analyses of
many others -- often contradictory.
The resulting lists are not intended to be numerical
rankings, which would result in lists of markets located
almost exclusively in California and Florida.
Nor are they intended to be be-all, end-all lists.
In a recent quarterly metro-area, single-family home
price report from the National Association of Realtors,
a record 72 markets had annual increases in the double
digits for median prices for existing, single-family
homes. Only six areas had price declines out of 145
metropolitan statistical areas surveyed.
Plus, many reports we reviewed noted strong housing
appreciation in the Gulf Coast areas impacted by the
2005 hurricanes. That's completely understandable. When
a significant portion of the housing stock has been
destroyed, the law of supply and demand dictates that
the remaining houses will dramatically increase in value.
We chose to leave those markets out because we felt
the gains didn't reflect normal market conditions and
would likely experience significant, unpredictable shifts
during the next two years.
Finally, these are the markets Bankrate feels are most
worth watching and are not intended to be lists on which
to base your investments or take to the bank in any
other sense. As Ingo Winzer, president of Local
Market Monitor, a Massachusetts-based real estate
analysis firm, says, "I thought that based on previous
observations on price cycles, (prices) would have peaked
two years ago, and they didn't. There is always some
factor that comes up that you hadn't anticipated. It
makes forecasting extremely difficult."
|Are you wishful
or wary about a real estate bubble? Check
these market groupings to see if your area
makes it onto any of our top 10 lists.
|30 housing markets to watch