Current Market Conditions Case Shiller May Report: Housing Prices Turn UP
Which Cities Will Recover First
For
the fourth consecutive month, there was modest improvement in home
prices in May. The index of 20 metropolitan areas had an annual decline
of 17.1 percent in May from the same month in 2008, an improvement over
April’s 18.1 percent fall. The Federal Housing Finance Agency notes
that some cities will recover sooner based on the degree of their
participation in the bubble.
Home prices sky rocketed and
economic wealth was largely created by a real estate bubble. Fresno,
Modesto, Salinas, Bakersfield, Stockton and Los Angeles saw home prices
rise to unsustainable levels and then collapse and along with it jobs.
In these cities unemployment rose to 10% and still rising.
The
study shows the how a cities economic make-up determines its well
being. Manufacturing areas, hurt by historical changes such as mega
shifts of manufacturing jobs overseas were already battered even before
the recession. Detroit and Flint or Youngstown Ohio will not see much
recovery until the economy is restructured. Cities with high-tech
capabilities like Seattle, Huntsville, Ala., or Boulder will fair
better. Cities with strong financial centers will also see slower
recoveries than those with robust technology sectors.
