Although the national housing market is still treading water, rural states appear to be faring a little better, according to economic forecasters.
Certain states such as Alaska, Iowa, North Dakota and South Dakota have economies which are dependent on sectors which are performing more strongly, such as energy, agriculture or industry. Although house prices here didn’t rise as steeply during the boom years, they haven’t fallen as steeply during the subsequent crash. Unemployment rates in these states also tend to be lower than the national average.
Jim Diffley, regional housing economist for IHS Global Insight says “Housing is a mess all over the place, but it’s less of a mess in some places.”
Jonathan Smoke, executive director for Housing IntelligencePro, which tracks real estate in 800 markets throughout the US thinks that several of the smaller Midwestern states seem to be on their way to recovering.
Housing IntelligencePro compared sales of homes in the 12 months ending to March with sales in 2006, but excluded distressed sales. This enabled them to have a clearer picture of how a normal market would look. Figures showed that sales in North Dakota, Wyoming and Iowa have rebounded the most strongly, while sales in North Dakota were actually up when compared with 2006 levels.
The figures showed that sales in Wyoming and Iowa were at around 70% of their 2006 levels, while in 34 of the 47 states surveyed, sales volumes were less than 50% of their 2006 levels. Property in Alaska and South Dakota appeared to be the least likely to suffer any further price falls, as the local economies here are relatively strong, according to Capital economics economist Paul Dales.
Prices in Alaska rose by 2.7% year on year, according to the Federal Housing Finance Agency, while nationally they fell by 5.5%. According to Moody’s Analytics, no US region will see stable house prices until later on in the year.