[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]
Some American cities are doing fine irrespective of falling home prices (at national level), rising unemployment and an economy with a slow growth(?). To find America's top 10 recession proof cities Forbes conducted a study. They examined the country's 50 largest metros and looked at several key measures:- Unemployment data for the year ending in February 2008 from U.S. Bureau of Labor Statistics. This helped them to see which areas were increasing or decreasing jobs.
- BLS data on job growth in non-farm payrolls, through February 2008. This included categories like construction, education and health services, financial activities, information, leisure and hospitality, manufacturing, natural resources and mining, professional and business services, trade, transportation and utilities, and the BLS's catch-all category, "other services."
- Median home price data from the National Association of Realtors — from the 4th quarter of 2006 to the 4h quarter of 2007. This brings areas with the largest annual gains to the forefront. However this data will not account for the impact of declining sales in the first several months of 2008.
- Forbes also used data from a November 2007 report, "U.S. Metro Economies: The Mortgage Crisis," by the U.S. Conference of Mayors which lists each city's estimated gross metropolitan product growth by projecting how rising foreclosures and falling home prices would affect overall levels of productivity in local economies.
| Rank | City | Median Home Price | Unemployment | Key Growth |
| 1 | Oklahoma City, OK | +8.2% | 3.5% (from 4.7% in Feb 2007) | Leisure & Hospitality: +6%, Construction: +11.5% from 2007 |
| 2 | San Antonio, TX | +7.9% | 4% (from 4.3%) | Construction: +6.3%, Leisure & Hospitality: +4.9% |
| 3 | Austin, TX | +6.4% | 3.6% (from 3.8%) | Natural Resources & Construction: +5.1%, Leisure & Hospitality: +5.3% |
| 4 | San Jose, CA | +11.2% | 5.2% (from 4.7%) | Information: +4.5% |
| 5 | Raleigh, NC | +4% | 4.2% (from 3.7%) | Professional & Business Services: +7.4%, Education & Health: +6% |
| 6 | Salt Lake City, UT | +2.5% | 3.1% (from 2.6%) | Education & Health: +5.5% |
| 7 | Houston, TX | +1.1% | 4.2% (from 4.5%) | Natural Resources: +5.9%, Construction: +4.7% |
| 8 | Seattle, WA | +1.2% | 4.2% (from 4.5%) | Natural Resources: +5.9%, Construction: +4.7% |
| 9 | Charlotte, NC | +3.3% | 5.4% (from 4.7%) | Professional & Business Services: +4.7%, Leisure & Hospitality: +4.2% |
| 10 | Dallas-Fort Worth, TX | +.5% | 4.3% (from 4.5%) | Education & Health: +5.6% |
Looks like if there is one state that is all poised to beat recession, it's Texas. It has four recession proof metros (San Antonio, Austin, Houston and Dallas-Fort Worth) in the top 10! Texans have benefited from historically lower home prices. Consequently homes in Texas have been affordable to a large segment of the population. It is to be noted that all four Texan metros have falling unemployment rates. A definite plus indeed!
Should we pack and move to Texas to beat recession? Or might it make sense to wait and watch the performance of the above metros till the end of the year. By then we'd know whether recession has kicked in officially or not.
Let's hope that the US economy does well so that we don't end up weathering another recession. We'll keep our fingers crossed and hope for the best.
Image Source(s): iStockPhoto
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