The single most important determinate of real estate prices in an area is employment opportunity nearby, Schiller says. Without that, a neighborhood is at risk of taking a free fall in real estate values.
"How convenient is this to a lot of high-paying jobs? That is the most important thing for value," he says. "Over the long term, the places that are less at risk, even if they're not the nicest, fanciest neighborhoods, are going to be the places that are convenient to get to high-paying jobs, period."
There are a few telltale signs of areas with long-term opportunities for jobs, Schiller says.
- Low unemployment.
- High household income.
- Seats of federal or state government.
- Creative industries (music, television, design, publishing or advertising).
- Research facilities.
- Large or prominent colleges and universities.
Schiller says the Bureau of Labor Statistics has a wealth of information that can help you assess an area's employment picture. One key bureau feature is the Local Area Unemployment Statistics map, which can give unemployment information by metro area and county. Another data set called Current Employment Statistics can tell you how many people are employed in different sectors of the economy in a given metro area.