But not all cities across the U.S. are in a bubble. Some – the 5 CITIES that will SURVIVE the CRASH – have underlying real estate fundamentals that still look strong. Appreciation in these markets has been low, while wage growth has been high.
We know from the 2007 Housing Crash that it was these type of cities – low appreciation, high wage growth – that performed the best during the crash. Back then it was the likes of Austin, Buffalo, Pittsburgh, and Oklahoma City which held their value.
Meanwhile, markets like Phoenix, Las Vegas, Los Angeles, and Orlando got crushed, losing 40-50% of their value in the last crash. Why did these markets do so poorly? Because they appreciated so much prior to the crash.
Simply put – the highest appreciation markets from 2001-07 had the biggest crash from 2007-12. The relationship between appreciation before the crash and deprecation after is extremely strong. Even stronger than the levels of subprime loans across markets.
Ultimately the criteria that determines which markets are the safest investments in 2021 comes down to:
1) Low Appreciation from 2015-21
2) High Wage Growth from 2015-21
3) Population Size 500k+
4) Stable Economy
Markets which meet these criteria include: Albany, Buffalo, Milwaukee, Omaha, Oklahoma City. And potentially Greenville, Huntsville, and Birmingham – however, these markets are a bit frothy right now.
Zillow Data: https://www.zillow.com/research/data/
BLS Data: https://www.bls.gov/sae/data/
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0:00 The 5 Survival Markets
3:17 500 Different Housing Markets
5:14 The Last Housing Crash (2007-12)
8:31 Appreciation Leads to Depreciation
12:06 Real Estate is VOLATILE Asset
14:15 Wages/Income = Long-Term Prices
16:20 Boise v. Baltimore
19:00 Survival Market Characteristics
21:06 Here are the Cities!!!
24:25 For Sale: Albany, NY
26:52 For Sale: Buffalo, NY
29:07 For Sale: Omaha, NE
30:37 Can Still Find Value in 2021!
#HousingMarket #HousingCrash #HousingBubble2021