By Kevin Chiu
Starting today Housing Predictor debuts a new real estate index. Housing markets that make the new “Watch List” are being monitored closely for changing economic conditions in the near future as a result of at least two improving economic trends. Some of the markets on the list have already been forecast to experience real estate appreciation in 2011. Others show the likelihood of moving in that direction.
Employment is the key to the nation’s economic recovery, and regions of the U.S. that experience higher job growth are more likely to enter a recovery phase sooner than others. However, destabilizing factors including high mortgage defaults coupled with lay-offs in government services undermine recoveries in many areas of the country.
Growth in job hiring in Maryland, Washington, D.C., Tennessee, parts of California and Texas are demonstrating changes in local markets and that signs of progress are developing in some cities. Dallas and San Jose are witnessing an increase in commercial leases in preparation for more hiring. Washington, D.C., Bethesda, Maryland and Baltimore are already seeing employers hire back workers in at least two areas of their local economy, including government related workers.
In historic terms, real estate markets lead nations out of economic depressions and recessions. Financial markets have always been a secondary factor following residential and commercial real estate collapses because of their tangible values. Stock markets have a history of erratic patterns in recoveries with major ups and downs. However, this economic recovery like the crash that led to its downturn has vastly different components that are leading its recovery.
Not surprisingly, housing markets in many improving areas appear to have bottomed out or are near bottoming out. Pittsburgh has experienced improving trends for sometime. Houston may be near its bottom and Austin, bolstered by its high-tech hub is recovering from its comparatively slight downturn.
Pockets of the U.S. are showing not only improving conditions developing, but that the state of regional economies may be moving in a more stabilized direction less dependent on national influences. Nashville, Tennessee is a prime example. The self-proclaimed “Music City” capital of the world is leasing out more office space to new tenants and beginning to hire more workers in a variety of fields.