Real Estate: Is the party over?
Exclusive forecasts for the 100 largest markets.
December 16, 2005
By Ellen Florian Kratz, FORTUNE
|
 |
| 1. |
|
| 2. |
|
| 3. |
|
| 4. |
|
|
|
|
NEW YORK (FORTUNE) -- Everybody from Los Angeles to Boston -- your mom, your doctor, your dry cleaner -- is puzzling over which way the nation's real estate market is headed. Up or down? Bubble or not?
It's a debate that's been raging for years, and recently that there have been clear signs of a slowdown. It's unlikely, however, that the housing market will come to a screeching halt.
To get a clearer picture of how things may play out, FORTUNE turned to Moody's Economy.com and home property-valuation service Fiserv CSW.
The researchers crunched numbers on the 100 largest metropolitan regions in the country, and the results of their analysis appear in the table below.
Nationally, the overall outlook seems reasonable: 7 percent appreciation for 2006 and flat for 2007. But markets that have seen the greatest appreciation over the past five years appear to be vulnerable.
Indeed, at some point in the next two years, according to the forecast, a third of the nation's 100 largest metro areas (accounting for 60 percent of the U.S. population) are expected to see modestly falling house prices.
Real estate bear markets often come in the form of steady declines over many years, rather than sudden sharp drops.
As inflation gradually gnaws away at the value of nominal home prices, regular folks might not take much notice. But in the long run the loss of wealth becomes all too real. From 1989 to 1997, for instance, Los Angeles residential real estate dropped more than 40 percent in inflation-adjusted terms.
The nation's most perilous regional market, according to the forecast data: Las Vegas, a speculator-infested hot spot. Prices there are projected to deflate by 7.9 percent next year, the year after by another 5 percent. For newcomers to the market and those with low-money-down deals who may have overleveraged themselves with adjustable-rate mortgages, even a modest downturn could mean financial jeopardy.
| 83 |
San Francisco-San Mateo-Redwood City |
CA |
$766,000 |
0.10% |
-2.90% |
| 88 |
San Jose-Sunnyvale-Santa Clara |
CA |
$720,900 |
-0.40% |
-3.90% |
| 98 |
Santa Ana-Anaheim-Irvine |
CA |
$682,300 |
-3.10% |
-6.10% |
| 90 |
Oakland-Fremont-Hayward |
CA |
$651,300 |
-0.70% |
-4.40% |
| 99 |
San Diego-Carlsbad-San Marcos |
CA |
$598,700 |
-3.40% |
-5.70% |
| 54 |
Honolulu |
HI |
$570,400 |
4.00% |
-1.00% |
| 82 |
New York City-White Plains-Wayne |
NY/NJ |
$504,800 |
0.10% |
-3.50% |
| 89 |
Oxnard-Thousand Oaks-Ventura |
CA |
$480,300 |
-0.70% |
-5.00% |
| 81 |
Bridgeport-Stamford-Norwalk |
CT |
$472,500 |
0.40% |
-1.30% |
| 96 |
Nassau-Suffolk counties |
NY |
$461,300 |
-2.00% |
-4.20% |
| 79 |
Cambridge-Newton-Framingham |
MA |
$448,800 |
0.80% |
0.00% |
| 84 |
Bethesda-Gaithersburg-Frederick |
MD |
$444,500 |
0.00% |
-0.50% |
| 87 |
Stockton |
CA |
$423,100 |
-0.30% |
-5.90% |
| 85 |
Boston-Quincy |
MA |
$422,900 |
-0.10% |
-1.40% |
| 95 |
Los Angeles-Long Beach-Glendale |
CA |
$412,900 |
-1.60% |
-6.30% |
| 74 |
Newark-Union |
NJ |
$407,000 |
1.50% |
-1.80% |
| 70 |
Washington-Arlington-Alexandria |
DC/VA |
$404,900 |
1.80% |
-3.40% |
| 77 |
Edison |
NJ |
$387,900 |
1.20% |
-2.90% |
| 67 |
W. Palm Beach-Boca Raton-Boynton Beach |
FL |
$386,200 |
2.10% |
-3.90% |
| 86 |
Essex County |
MA |
$380,600 |
-0.20% |
-0.70% |
| 94 |
Sacramento-Arden-Arcade-Roseville |
CA |
$372,900 |
-1.20% |
-5.10% |
| 97 |
Riverside-San Bernardino-Ontario |
CA |
$362,800 |
-2.60% |
-6.80% |
| 57 |
Fort Lauderdale-Pompano Beach-Deerfield Beach |
FL |
$356,600 |
3.10% |
-4.50% |
| 72 |
Miami-Miami Beach-Kendall |
FL |
$343,700 |
1.80% |
-5.50% |
| 91 |
Fresno |
CA |
$340,800 |
-0.80% |
-2.80% |
| 65 |
Seattle-Bellevue-Everett |
WA |
$335,500 |
2.50% |
1.00% |
| 30 |
Sarasota-Bradenton-Venice |
FL |
$314,300 |
5.60% |
-3.60% |
| 100 |
Las Vegas-Paradise |
NV |
$296,000 |
-7.90% |
-5.00% |
| 93 |
Providence-Fall River-New Bedford |
RI/MA |
$292,800 |
-1.10% |
-2.20% |
| 76 |
Worcester |
MA |
$287,800 |
1.30% |
-0.30% |
| 92 |
Bakersfield |
CA |
$286,300 |
-0.80% |
-3.00% |
| 75 |
New Haven-Milford |
CT |
$280,300 |
1.40% |
0.60% |
| 47 |
Poughkeepsie-Newburgh-Middletown |
NY |
$265,000 |
4.60% |
0.80% |
| 78 |
Chicago-Naperville-Joliet |
IL |
$264,900 |
1.10% |
0.20% |
| 52 |
Lake County, Kenosha County |
IL/WI |
$259,100 |
4.20% |
1.90% |
| 71 |
Hartford-West Hartford-East Hartford |
CT |
$257,600 |
1.80% |
0.60% |
| 60 |
Baltimore-Towson |
MD |
$249,100 |
2.90% |
-0.80% |
| 11 |
Allentown-Bethlehem-Easton |
PA |
$247,400 |
6.90% |
1.20% |
| 63 |
Denver-Aurora |
CO |
$244,800 |
2.60% |
2.50% |
| 68 |
Phoenix-Mesa-Scottsdale |
AZ |
$238,100 |
2.00% |
-3.70% |
| 59 |
Portland-Beaverton-Vancouver |
OR/WA |
$234,600 |
3.00% |
-0.70% |
| 80 |
Minneapolis-St. Paul-Bloomington |
MN |
$234,600 |
0.70% |
0.70% |
| 64 |
Wilmington |
DE |
$231,000 |
2.50% |
1.70% |
| 55 |
Orlando-Kissimmee |
FL |
$226,400 |
3.80% |
-0.50% |
| 66 |
Tacoma |
WA |
$222,700 |
2.30% |
0.60% |
| 61 |
Tucson |
AZ |
$220,900 |
2.90% |
-4.00% |
| 43 |
Milwaukee-Waukesha-West Allis |
WI |
$210,900 |
4.80% |
2.50% |
| 62 |
Camden |
NJ |
$210,800 |
2.70% |
0.80% |
| 40 |
Philadelphia |
PA |
$199,400 |
5.10% |
0.50% |
| 58 |
Springfield |
MA |
$197,900 |
3.00% |
1.20% |
| 69 |
Warren-Farmington Hills-Troy |
MI |
$196,000 |
1.90% |
0.80% |
| 44 |
Tampa-St. Petersburg-Clearwater |
FL |
$193,700 |
4.80% |
-0.50% |
| 7 |
Virginia Beach-Norfolk-Newport News |
VA |
$193,100 |
7.30% |
1.00% |
| 6 |
Richmond |
VA |
$191,800 |
7.40% |
3.30% |
| 39 |
Raleigh-Cary |
NC |
$183,100 |
5.20% |
5.10% |
| 25 |
Albany-Schenectady-Troy |
NY |
$176,700 |
6.00% |
4.50% |
| 41 |
Charlotte-Gastonia-Concord |
NC |
$172,800 |
5.10% |
5.50% |
| 14 |
Albuquerque |
NM |
$166,700 |
6.50% |
6.10% |
| 20 |
Salt Lake City |
UT |
$165,700 |
6.10% |
3.40% |
| 53 |
Atlanta-Sandy Springs-Marietta |
GA |
$165,300 |
4.20% |
4.00% |
| 2 |
Jacksonville |
FL |
$164,700 |
8.10% |
2.50% |
| 21 |
Austin-Round Rock |
TX |
$161,800 |
6.10% |
5.00% |
| 8 |
Nashville-Davidson-Newport News |
TN |
$157,300 |
7.10% |
6.70% |
| 26 |
Dallas-Plano-Irving |
TX |
$155,500 |
5.90% |
6.30% |
| 46 |
Kansas City |
MO/KS |
$154,600 |
4.70% |
4.10% |
| 13 |
Birmingham-Hoover |
AL |
$152,500 |
6.90% |
5.40% |
| 33 |
Columbus |
OH |
$150,700 |
5.50% |
6.00% |
| 37 |
New Orleans-Metairie-Kenner |
LA |
$149,100 |
5.40% |
6.60% |
| 10 |
Memphis |
TN |
$147,600 |
7.00% |
6.50% |
| 24 |
Cincinnati-Middletown |
OH |
$146,200 |
6.00% |
6.60% |
| 45 |
Greensboro-High Point |
NC |
$145,100 |
4.80% |
5.50% |
| 50 |
Cleveland-Elyria-Mentor |
OH |
$142,800 |
4.30% |
5.10% |
| 29 |
Greenville |
SC |
$141,300 |
5.70% |
5.00% |
| 36 |
Knoxville |
TN |
$140,100 |
5.40% |
5.20% |
| 9 |
Houston-Sugar Land-Baytown |
TX |
$139,800 |
7.00% |
6.60% |
| 56 |
Grand Rapids |
MI |
$137,300 |
3.60% |
2.90% |
| 51 |
Omaha-Council Bluffs |
NE |
$136,100 |
4.30% |
4.10% |
| 27 |
St. Louis |
MO |
$134,900 |
5.80% |
4.10% |
| 42 |
Louisville |
KY |
$134,800 |
5.00% |
4.60% |
| 5 |
Baton Rouge |
LA |
$133,800 |
7.60% |
3.80% |
| 15 |
Columbia |
SC |
$133,200 |
6.40% |
5.40% |
| 1 |
San Antonio |
TX |
$129,900 |
8.30% |
7.00% |
| 49 |
Gary |
IN |
$127,300 |
4.40% |
3.40% |
| 16 |
Fort Worth-Arlington |
TX |
$125,700 |
6.30% |
5.00% |
| 31 |
Indianapolis |
IN |
$121,700 |
5.60% |
5.40% |
| 73 |
Detroit-Livonia-Dearborn |
MI |
$120,100 |
1.60% |
2.00% |
| 34 |
Akron |
OH |
$117,600 |
5.40% |
5.30% |
| 12 |
Oklahoma City |
OK |
$116,900 |
6.90% |
6.00% |
| 22 |
Tulsa |
OK |
$116,600 |
6.10% |
6.20% |
| 18 |
Dayton |
OH |
$116,500 |
6.10% |
5.60% |
| 28 |
Toledo |
OH |
$116,400 |
5.70% |
5.00% |
| 4 |
Little Rock-North Little Rock |
AR |
$115,700 |
7.80% |
7.20% |
| 23 |
Pittsburgh |
PA |
$113,000 |
6.00% |
5.00% |
| 38 |
Rochester |
NY |
$111,200 |
5.30% |
6.80% |
| 17 |
Syracuse |
NY |
$109,400 |
6.20% |
5.40% |
| 32 |
Wichita |
KS |
$107,200 |
5.50% |
4.80% |
| 3 |
El Paso |
TX |
$107,100 |
8.10% |
7.10% |
| 35 |
Buffalo-Niagara Falls |
NY |
$96,400 |
5.40% |
5.30% |
| 48 |
Youngstown-Warren-Boardman |
OH |
$83,400 |
4.50% |
5.30% |
| 19 |
McAllen-Edinburg-Mission |
TX |
$71,000 |
6.10% |
6.20% |
|
|
|
|
|
