Housing Markets in Small Towns See Activity

September 27, 2012 / Russell Legato, Residential Property Analyst

Small towns with large markets are usually bedroom communities. Advantages to living there are good public schools and short commuting time. These are places where prosperous people want move into a home of their own and put their children in a good school in a good location.

Housing Markets in Small Towns See Activity

These markets are soaring now, but have they returned to the levels that existed prior to the housing crisis? Experts opine they are moving towards those levels, but, still have a way to go. These communities do show strong signs of prosperity, however.

Nielsen’s Demand Institute is a provider of consumer behavior information. Senior vice president, Louise Keely, expects activity to level out. National price increases on homes for sale will move up again to those previous levels before the crisis occurred. It will not, however, happen overnight.

Professor Mark Stapp, a teacher at Arizona State claims the recovery rate is not clear. The real estate industry saw such a sharp depletion in prices during the crisis that any increases taking place now are a small step toward previous levels. It isn’t, in his opinion, a sustainable rate of growth. According to him, prices are not going to go down.

One West Virginia town close to the Ohio River is an example of coming prosperity. This small town is the third-largest in size in this state. In this town are historic buildings that constitute tourist attractions. There is the likelihood of new federal jobs that will be available soon. Local realtors expect property sales to increase as a result. There was an increase in house listing prices of 6.3 percent.

Those prices were low to begin with, however. The median price of $71,400 is only half the median price nationally, which is $152,100. In addition, the demand is diminished because additional housing is still available for sale. Ten towns with populations of 30,000 to 50,000 were evaluated by 24/7 Wall St. The resulting statistics have been interpreted in several ways by several organizations.

It is possible to examine the results from various points of view and the results can be expressed as either A or B depending on the desired numbers. Small towns with large markets are going to be more prosperous and homes purchased for higher prices. The prices depend on many factors, including population, job growth and proximity to employment for numerous potential homeowners.

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