After all, it was only about a decade ago that the U.S. real estate market bubble burst, and millions of Americans lost their homes (and for many, life savings). And, as most of us recall all too well, plenty of others found themselves underwater on their mortgages, owing more than the homes were worth. But then came … the recovery. God bless the recovery! The housing market and economy have come roaring back. Some markets, in fact, are booming to historic levels. But many folks still have some serious housing PTSD when it comes to the prospect of buying. And isn’t a home supposed to make you feel safe and secure?
So let us put you at ease: What goes up doesn’t have to come crashing down. As we’ve said before, record-high prices alone do not make a bubble. Still, if playing it safe is your top priority, we’ve got you covered. Our data team at realtor.com® set out to find the real estate markets that are least likely to pop if the country heads toward another recession—metros where home prices are still rising at a healthy (versus dizzying) pace.
We also only included markets where the supply of homes for sale is still large enough that buyers are unlikely to be pulled into costly bidding wars.
“These are the Goldilocks of today’s housing market,” says Javier Vivas, manager of economic research for realtor.com. “Not too hot, and not too cold, these markets present the right balance of housing and economic conditions for buying and selling activity to evolve naturally.”
Of course, no market is completely bulletproof against another financial crisis. But these cities, with their strong and diversified industries, come pretty darn close. Plus, steadily rising price appreciation means that they’re likely to be solid investments for the long haul. And slow and steady wins the race, right?
“They have rising demand, and the corresponding supply to quench it,” Vivas says. “And they’re all relatively smaller metros, often with large nearby siblings eating up any potential irrational growth, which keeps them from overheating.”
To identify the 10 metros where you can buy a home and rest easy about it, we compared the 150 largest U.S. housing markets, using nine key metrics:
- Positive (but not out-of-control) price appreciation of between 4% and 12% in 2016
- An ample supply of homes for sale (between three and seven months available)
- Affordability, measured by the percentage of income needed to buy a home
- New home construction recovered from the recession
- Median number of days homes are on the market (the lower the better)
- Foreclosure rate
- Percentage of homes underwater
- Percentage of homes with price reduction (yep: Lower is better)
- Low unemployment rate
1. Fort Collins, CO
Median home price: $376,000
Annual price growth: 7%
Colorado State University and a robust high-tech scene, which includes Hewlett-Packard and Intel, contribute to an enviable unemployment rate of 2.9% in this city of 160,000, the state’s fourth biggest. Fort Collins also has a third line of defense against economic downturns: the beer industry. It is home to a major Anheuser-Busch facility and 22 craft breweries—and as the Prohibitionists found, the alcohol industry is awfully tough to kill.
“Largely due to its diverse economy, the Fort Collins market has been extremely stable,” says Realtor Larry Kendall of the Group. “During the recession, our home prices didn’t fall nearly as much as the rest of the country.”
Fort Collins is also very affordable—at least by Colorado standards. The median home price is about 25% less than in Denver and 40% less than in Boulder, CO, both of which are about an hour away.
Housing highlight: The city is home to River Rock Commons, a progressive cohousing development of nearly three dozen single-family homes set up around a common house, where residents can prepare communal meals they can enjoy with one another. Togetherness rules.
2. Madison, WI
3. Durham, NC
4. Honolulu, HI
5. Greenville, SC
6. Ann Arbor, MI
7. Manchester, NH
8. Salem, OR
9. Oklahoma City, OK
10. San Antonio, TX