Posted by Rob Minton
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It seems times have been tough for "Joe Six-Pack" during this recession in the United States, but Joe apparently has done better than some of the wine-and-cheese types in at least one area.
His house.
Maybe you missed it -- heck, the doom-and-gloom media let these types of reports fly under the radar often -- but there was a CNN/Money.com article with the headline "What Housing Bust?" that paints a much different picture of real estate in America than you're probably used to reading.
The article points to an analysis done by financial data firm Fiserv that revealed that in 23 states, home values in nearly all metropolitan areas have risen over the past three years. Yes, you read that correctly. Risen.
Leading the way, apparently, is Texas. The Lone Star state showed gains in ALL of the 26 metro markets in the state over the past three years, ranging from Dallas's 2.8-percent rise to Odessa's incredible 32.5-percent jump, according to the article.
According to the report, states in the South, the Plains and in the non-coastal areas of the West have had price gains in most metro areas. "Middle America," some might call it. Or the "Heartlands."
The logic is that because those areas did not see home values shoot up in value during the real estate boom as much as other areas did, they have not seen the dramatic downside when the bubble burst.
So, except in "middle America" states where industry has suffered -- Detroit, for example -- and unemployment is high -- Ohio -- Joe Six-Pack has not seen the price of his home fall the way more cosmopolitan New Yorkers or sun-basking Miamians have.
According to the report, states that have a lot of undeveloped land did not have the run-up in prices during the boom that tighter areas had. For example, Odessa, Tex., had room to grow, so property values never went crazy even during the run-up. Manhattan, meanwhile, and places like Santa Monica, Calif., Portland, Ore., and Chicago had no room to add much more housing, which meant the existing housing became valuable.
Chicago -- more accurately, Illinois -- is a good example of this whole phenomenon. In its biggest city, land is tight, but in other parts of the state, there is plenty of undeveloped land. That meant that during the boom, prices in Chicago sky-rocketed but in other areas they didn't. And what went up faster and higher has come down faster and harder.
So the areas of the country that have the least volatility are doing OK right now, contrary to what you may hear and read every day.
This is another perfect example of "All real estate is local." There is no "national market." The national median price of a home really means nothing to you. You cannot let reports of the "national" real estate market affect your decisions regarding -- or your confidence in -- your own market.
Especially if you're Joe Six-Pack.
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