Market tracker HousingPredictor.com forecasts a 3.9% drop in median home prices nationwide this year, but its annual Best 25 Housing Markets study actually foresees values rising in dozens of locales.
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Study author Mike Colpittts says most areas with increasing prices have economies that focus on food or energy production, two sectors that are booming amid today's generally rising commodities values."Energy rich states like North Dakota, South Dakota and Texas are doing better on the whole and make up a good number of cities in the best 25 markets," Colpitts says. "The Midwest is [also] doing much better because of farming."Here's a look at the five cities HousingPredictor.com believes will enjoy the biggest gains in median home prices this year:
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A June flood along the Moose River damaged some 4,000 local homes, though, cutting Minot's housing stock just as demand was rising. As a result, HousingPredictor.com expects the city's median home price to rise 4.2% this year, to $88,670."[Minot] is experiencing higher demand for housing as a result of the [energy] boom and the flooding that devastated homes last summer, reducing the supply," Colpitts says.Located some 100 miles north of Bismarck, N.D., and 50 miles south of the U.S.-Canadian border, Minot also hosts Minot Air Force Base and Minot State University. Both bolster the local economy and the area's real estate market.
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Traditionally an energy and agricultural powerhouse, the city has diversified its economy over the years. Fortune 500 companies Devon Energy(DVN) and Chesapeake Energy(CHK) call Oklahoma City home, as does the Sonic(SONC) drive-in restaurant chain.The 1.2-million-person metro area also hosts Tinker Air Force Base and three major schools -- the University of Oklahoma, University of Central Oklahoma and Oklahoma Christian University.All of that adds up to a 5.8% jobless rate, which has HousingPredictor.com estimating that Oklahoma City's median home prices will rise 4.3% this year, to $105,343.
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"West Virginia has known hard economic times for decades, but lower home prices are a magnet for newcomers -- especially retirees seeking a lower cost of living," Colpitts says.In addition to hosting lots of state agencies, Charleston is home to Appalachian Power, Mountaineer Gas Co. and other large companies.The 304,000-person metro area also counts the University of Charleston and West Virginia State University as major employers, helping to give Greater Charleston a 6.8% jobless rate -- well below the national average.
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Goodyear Tire(GT) operates a large factory in the 230,000-person metro area, as does dog- and cat-food maker Hills Pet Nutrition and some other manufacturers. Topeka also hosts Washburn University, which has some 7,300 graduate and undergraduate students."The economy is already enjoying the best times in decades, [and] low unemployment is pushing Topeka into a recovery," Colpitts says.HomePredictor.com forecasts Topeka's median home prices will climb 4.7% in 2012 to hit $127,734.
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That's boosting real estate in 145,000-person Kansas City, where HomePredictor.com expects median prices to hit $142,830 by year's end -- a 5.8% increase.Colpitts says Kansas City's existing-home sales "are rising, and are projected to remain that way through 2012 as foreclosures are reduced by higher home prices."Kansas City is home to the 3,900-worker General Motors(GM) Fairfax Assembly Plant, which builds Chevrolet Malibus and Buick LaCrosses. The community is also home to Associated Wholesale Grocers and the Kansas City Steak Co.All told, the latest local figures show that the Kansas City, Kan./Kansas City, Mo., metro area had 7.8% joblessness in October -- 1.2 percentage points below the nation's overall rate that month.RELATED STORIES: >>5 U.S. Housing Booms in 2011>>6 Best Cities for Starting Over in 2012>>Best Gadgets for 2012 (Kitchen Edition)Follow TheStreet on Twitter and become a fan on Facebook.
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