Everybody has read the headlines: Home sales are down 11 percent across the country over the last 12 months, median home prices are down, and inventories of unsold homes are bulging.
But look more closely at the numbers. In the latest quarterly study conducted by the National Association of Realtors, about two thirds of the 149 markets surveyed registered price gains year to year. Some of those increases were exceptional, thanks to strong local economic growth and affordable housing prices.
Counter-trend patterns can be found inside large metropolitan areas as well, where select micro-markets neighborhoods and entire Zip codes defy national, regional and state downcycles. For example, in the Washington D.C. area, two contiguous Zip code areas – 20815 (Chevy Chase/Bethesda, Maryland) and 20015 (portions of Northwest D.C.) – have been relatively unscathed by the softness that plagues the regional market.
In the Miami-South Dade metropolitan area, close-in areas such as Coral Gables are far outperforming the overall market’s well-publicized reverses.Similar patterns can be found in the Los Angeles and San Francisco areas, according to local brokers. In San Francisco, highly-regarded, close-in neighborhoods such as Pacific Heights and the Marina are little affected by the credit crunch and mortgage problems.
As a general rule, oasis micro-markets are characterized by: higher than median household incomes; convenience to employment centers and cultural attractions; excellent school reputations and household educational attainments that are well-above metropolitan norms. The key, however, is that the underlying metropolitan economic fundamentals must be strong, with plenty of job creation, especially jobs with above-average compensation.