Francesca Levy, Forbes.com reports
Cities from McAllen, Texas (No. 7), to Greenville, S.C. (No. 20), and Chattanooga, Tenn. (No. 8), that have faced a host of economic problems, are now seeing a silver lining: Housing speculation stayed in check in these areas because there was little to draw buyers in the first place. As a result, housing is relatively stable, affordable, and positive employment trends hold promise for the future .
“These are sleepy little markets that have fallen under the radar screen in terms of turbulence in housing,” says Kermit Baker, a senior researcher at Harvard University’s Joint Center for Housing Studies. “They didn’t go through much of a boom or bust.”
In some Southeastern metros, buying and living there is affordable. South Carolina cities Columbia (No. 12) and Greenville (No. 20) make the top 20, as does Augusta, Ga. (No. 5). The home price speculators that ran up prices in nearby resort towns Hilton Head and Myrtle Beach largely stayed away from these metros, says William Harrison, a developer and professor of real estate at the University of South Carolina.
“Smart speculators are going to seek out places with a highly sought-after amenity, like an ocean or lake; or barriers to growth,” he says. “There was hardly any speculation here.”
Greenville is one of the few places that have been helped, not hurt, by an economic dependence on the auto industry. Luxury automaker BMW, whose plant is in the nearby city of Greer, generates jobs and helps keep its median household income at a healthy $56,820. Living there is manageable too–real estate taxes are only $771 per year. Government jobs and the Fort Jackson military base help prop up state capital Columbia’s economy, and in Augusta, the promise of jobs from nearby Fort Gordon military base and its state university contribute to a comparatively decent three-year job growth outlook: .03%. 
To find the cities that offer the most bang for the buck, we looked at the country’s 100 largest Metropolitan Statistical Areas–geographic entities defined by the U.S. Office of Management and Budget, for use in collecting statistics–across these measures: foreclosures as a percentage of home prices; vacancies; unemployment rates; a three-year job growth forecast; a three-year home price forecast; housing affordability; median real estate taxes; and median travel time to work.
To locate healthy housing markets, we looked at metros where foreclosures had most been flushed out of the market, allowing home values to increase and signaling a potential bottoming out. We also sought areas with low home vacancies, a sign of a stable supply of inventory. We examined the number of October foreclosures as a percentage of total housing units, using data from RealtyTrac, and the number of 2008 vacancies in each metro, using data from the U.S. Census.
To further indicate which markets were standing up best, we looked at cities with low unemployment rates relative to the rest of the country with data from the Bureau of Labor Statistics. We ranked September unemployment rates (the most recent available by metro). We then included in our analysis the three-year job growth forecast, from 2009 to 2012, from Moody’s Economy.com, and ranked them by metro.
For affordability and convenience, we included the Housing Affordability Index compiled by Moody’s for the second quarter of 2009, and the annual median real estate taxes paid and weekly travel time to work in 2008, using United States Census data. Finally, we looked at the markets economists thought would improve most in the near future, using the three-year forecast for the Case-Shiller Home Price Index from 2009 to 2012, created by Moody’s. We ranked metros in each of these measures, then averaged these scores to arrive at a final ranking.
posted by: Mike Owens Partner/Mortgage Planner with Horizon Financial, Inc. Mike can be reached at (864) 907 2678 or via e-mail at MOwens@HorizonFinancial.org
