While real estate markets in big business states like California and Arizona continue to crash and burn, it seems a few smaller states might just be leading the way in a recovery, say economists.
Rural states including North Dakota, as well as its near neighbor South Dakota and others have seen some of the strongest rebounds in the country so far, says the latest data from Housing Intelligence Pro.
The company took into account only the sales of residential homes that were not threatened with or foreclosed upon during the last 12 months to March 2011, and then compared these figures with sales figures in 2006, just before the crash. By excluding distressed properties, it enables investigators to get a much better picture of what the market for normal sales is like.
The figures showed that of all states in the US, North Dakota home sales were the only ones to actually rise above 2006 levels. Not far behind them meanwhile, were fellow rural states Iowa and Wyoming, which saw sales figures reaching 70% of their level in 2006.
Considering that 34 out of the 47 states for which data was available were wallowing at below half their 2006 levels, this is a staggering achievement for rural housing markets, says Jim Diffley of HIS Global Insight.
“Housing markets are still a mess, but in some places they are nowhere near as messy as others,” he said.
Housing IntelligencePro’s Jonathan Smoke was quick to draw the same conclusion, announcing that several smaller states in the Midwest “appear to be recovering”.
But why are rural states doing so much better? The answer would appear to lie in their local economies, which are based primarily on things like agriculture, industry and energy, areas that are performing much better than other sectors in the US these days.
Additionally, the real estate markets in these areas never saw the huge boom that took hold in most other parts of the country, and so they weren’t impacted by the following bust nearly as much.
Another factor is that unemployment rates in states like North Dakota are well below the national average.