The Best Housing Markets for 2013
10. Louisville, Ky.-Ind.
> Job growth: 2.7%
> Vacancy rate: 3.0%
> Construction permits: 5.8 per 1,000 homes
Employment growth is the main reason behind the optimism for the Louisville housing market. Jobs in the area grew by 2.7% in the first 10 months of the year, which is among the top growth rates of the 100 largest housing markets. There has been a disproportionately strong growth in manufacturing, especially for automobiles. The Louisville housing market fared better than most during the economic downturn, with prices falling just 4.7% from peak to trough. Despite this, construction has still been relatively slow, at just 51% of the area’s historical normal rate in the first eight months of 2012.
9. Fort Worth, Tex.
> Job growth: 2.6%
> Vacancy rate: 3.0%
> Construction permits: 8.1 per 1,000 homes
The housing market in the Fort Worth area has improved in 2012. Jobs in the mining, logging and construction sector grew by 9.4% from October 2011 to October 2012. Meanwhile, jobs in both the education and health services and professional services, the two largest nongovernment sectors, grew by 5.7%. Houses in the Fort Worth are generally cheap compared to most large metro areas. The median asking price per square foot from November 2011 to November 2012 was just $77.70, which was the 10th lowest among the 100 largest housing markets. Nearby Dallas had a median asking price of $89.72 per square foot, while Austin, about a three-hour drive away, had a median asking price of $107.35.
8. Peabody, Mass.
> Job growth: 2.5%
> Vacancy rate: 2.4%
> Construction permits: 2.5 per 1,000 homes
The median asking price per square foot for homes in the Peabody area was $189.47 for the 12 months through November. While this was more than most major home markets, it was much less than in Boston itself, where the median asking price per square foot was more than $220. Unlike many of next year’s top markets, construction remained slow in Peabody. There were just 2.5 construction permits per 1,000 units between January and October, fewer than most markets. According to Trulia’s Kolko, in Peabody, “[they are] more reliant on higher end professional services and haven’t been held back by a lot of manufacturing. [They] had very little overbuilding during the bubble.” Last month, the Boston Globe reported that year-to-date single family home sales through October for the Commonwealth of Massachusetts were up almost 22% from the year before.
7. Omaha, Neb.-Iowa
> Job growth: 2.5%
> Vacancy rate: 3.3%
> Construction permits: 8.7 per 1,000 homes
Omaha’s housing market weathered the storm better than most housing markets, as home prices only fell by 4.3% from peak-to-trough. The economy of Omaha has been particularly strong. As of October 2012, the unemployment rate in the Omaha metro area was just 3.9%, about half that of the national unemployment rate that month. Job growth in the first 10 months of the year was at 2.5%, which was among the top quintile of all metro areas. The median asking price per square foot in the first eight months of 2012 was a modest $79.96, which was the 14th lowest out of 100 metro areas.
6. Seattle, Wash.
> Job growth: 3.1%
> Vacancy rate:2.4%
> Construction permits: 11.1 per 1,000 homes
In the last year, asking prices on homes in Seattle rose by 8.8%, more than most of the nation’s largest housing markets. This increase coincided with high levels of construction — there were 11.1 construction permits per 1,000 units, more than all but a few markets nationwide. Despite this growth in demand, Seattle remained affordable relative to areas such as San Francisco and San Jose where the median price per square foot was more than twice as high as that in Seattle. None of next year’s top markets had home prices fall as much during the recession as Seattle, where prices fell by nearly 26% from their peak-to-trough.