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| The Prospects Are Bright Deep in the Heart of Texas |
| Written by Jonathan Smoke | |
| 08.04.2008 | |
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Discuss this article on the forums. (0 posts) We’ve updated our Prospects Index calculations based on the latest historical data and forecasts for key housing metrics, including market equilibrium, economic outlook, home price risk, and long-term home price appreciation. As to the best markets for future prospects, I wouldn’t bet against Texas. Before we get into the list, it’s important to note our emphasis on prospects. Our index calculations are meant to give a picture of what we expect these markets to be like in 3-5 years. While the market equilibrium is current, the other variables are based on the most recent forecasts out for five years. The indices are relative so they score the markets against one another. Using the 363 largest markets in the country (all 363 metropolitan statistical areas as defined by the Census and the White House/Office of Management and Budget), the best markets for housing are in Texas and other markets with energy or agricultural strength: 1. Tyler, TX 2. Victoria, TX 3. Longview, TX 4. Sherman-Denison, TX 5. Bowling Green, KY 6. Odessa, TX 7. Fort Collins-Loveland, CO 8. Brownsville-Harlingen, TX 9. Midland, TX 10. Morgantown, WV 11. McAllen-Edinburg-Mission, TX 12. Billings, MT 13. Texarkana, TX-Texarkana, AR 14. Jonesboro, AR 15. Lubbock, TX 16. Owensboro, KY 17. Abilene, TX 18. Laredo, TX 19. Columbus, IN 20. Pueblo, CO Looking back against our April report, six markets dropped off the top 20 list: Hinesville-Fort Stewart, GA; Boulder, CO; Longview, WA; Dallas-Fort Worth-Arlington, TX; Santa Fe, NM; and Rome, GA. Boulder, Dallas, and Santa Fe didn’t fall much in the rankings, but the other three did. Hinesville-Fort Stewart, GA took a big fall as a result of a significant decline in the current housing market equilibrium as well as declined economic prospects and greater risk of home price declines. Longview, WA had a significant decline in its economic forecast while home price risk increased. Rome, GA had a significant decline in the economic forecast while the current housing market equilibrium also declined. Four of the six newcomers were from Texas, bringing up the Texas portion of the top 20 markets to 55%. Joining the top 20 were McAllen-Edinburg-Mission, TX; Billings, MT; Jonesboro, AR; Lubbock, TX, Abilene, TX; and Laredo, TX. Later this week I will profile the bottom 20 markets, or the markets with the worst relative prospects for future housing performance. I will give you a hint—Texas is not represented in the bottom. National subscribers can access two different versions of our latest Housing Prospects reports, one focused on the 363 metropolitan statistical areas, and one covering all 939 market areas, which includes the metropolitan and micropolitan statistical areas. 
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