Ever wondered why some housing markets virtually disintegrated when the housing bubble burst, while others have survived quite well? This was the subject of a research report put out recently by the New York Federal Reserve Bank written by two of the Bank’s economists and researchers, Jaison R. Abel Richard Deitz. Deitz and Abel answer the question by focusing particularly on the upstate New York housing market.
During the housing boom of 2000 to 2006 home prices in upstate New York cities of Utica, Syracuse, Rochester and Buffalo did not appreciate rapidly like so much of the rest of the nation. Likewise, these metro areas have either fallen very slowly, or have actually continued to rise in home value gradually.
These New York cities have managed to sustain their housing market despite continuing weak employment and decline in population. Buffalo, Rochester, and Syracuse all ranked in the top 10% of housing markets across the country in home price appreciation in 2009.
Abel and Deitz pegged the area’s low dependence on sub-prime mortgages during the boom years, and higher than average performance of the existing sub-prime loans in these upstate New York communities as the reasons why this area has not suffered from steep declines in the housing market. No big boom means no big bust and a more stable housing market. In communities throughout the country where the housing market remained stable, the lack of sub-prime loans can be identified as a big reason.
Dave Rosenmarkle
Broker/Owner
Highland Realty
Arlington, VA 22207
703-538-2566
davidrose@mris.com
www.HighlandAgents.com
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