As a seasoned real estate investor, one who has felt the pain with the 2008 downturn, I found this article very interest and timely. Many of my older RE cronies feel the same way. Only time will tell. None the less a very interesting and perhaps insightful article from marketwatch.com. Notice the ominous position Phoenix has in the rankings as well as California and Florida.
What does this mean? Be conservative on what you buy. Watch the LTV(Loan To Value) and ITV(Investment To Value) PLUS other DUE DILIGENCE FACTORS. CLICK HERE FOR WHAT TO CONSIDER
If investors have flocked to your town, keep a close eye on home prices.
Some housing markets haven’t seen the notable price increases that others have in recent years — and that could be a good thing when the next recessions rolls around.
The Federal Reserve may not be currently forecasting a recession, but sooner or later the U.S. economy’s fortunes will turn for the worse.
And when that happens, home owners in Rochester, N.Y., can rest easy.
A new study from Redfin ranked Rochester as the city least at risk of a housing downturn during the next recession. Redfin RDFN, +3.83% computed the downturn risk for the 50 largest cities across the country using the following metrics:
• Median home sale price-to-household income ratio
- Average loan-to-value ratio of homes sold in 2018
- Home price volatility based on the standard deviation of home prices year-to-year• Share of home sales that are flips, i.e. sold twice within 12 months for a different price• Diversity of local employment based on the likelihood that two randomly selected workers are in the same field• Share of the local economy dependent on exports• Share of local households headed by someone age 65 or olderThese factors were all weighted differently, based on how likely each attribute was to contribute to a real-estate market downturn, to produce an overall score.
Rochester had the lowest score of any city studied at 30.4%, followed by Buffalo, N.Y. (31.9%) and Hartford, Ct. (33.9%). Overall, the top 10 cities that were least likely to see a recession-fueled housing downturn were all located east of the Mississippi River. (NOTE: PHOENIX, VEGAS AND MANY CALIFORNIA cities are where they were in THE GREAT RECESSION)
| Rank | Metro area | Average home loan-to-value ratio | Home price volatility | Flips share of sales | Exports share of GDP | Overall score |
| 1 | Riverside, Calif. | 65.3% | 17.9% | 6.3% | 5.6% | 72.8% |
| 2 | Phoenix, Ariz. | 64.8% | 17.7% | 8.1% | 5.4% | 69.8% |
| 3 | Miami, Fla. | 50.4% | 15.2% | 7.5% | 10.1% | 69.5% |
| 4 | San Diego, Calif. | 65.6% | 16.9% | 5.9% | 8.0% | 68.2% |
| 5 | Providence, R.I. | 70.6% | 16.8% | 4.4% | 8.6% | 67.1% |
| 6 | Tampa, Fla. | 59.2% | 17.1% | 7.5% | 4.3% | 66.8% |
| 7 | Las Vegas, Nev. | 61.0% | 16.7% | 8.3% | 2.4% | 64.6% |
| 8 | Los Angeles, Calif. | 62.6% | 15.7% | 7.7% | 6.1% | 63.7% |
| 9 | San Antonio, Texas | N/A | 15.7% | 5.8% | 7.1% | 63.2% |
| 10 | Orlando, Fla. | 61.2% | 16.0% | 6.1% | 2.4% | 59.1% |