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Bypassing the Bust: The Stability of Upstate New York's Housing Markets During the Recession

Date: Dec 31, 2009
Author(s): Richard Deitz, Jaison Abel
Topic(s): Data / Demographics / History: Demographics and Data, Housing / Neighborhoods: General
Type: Report

The United States experienced a sizeable boom in real estate activity between 1998 and 2006, followed by a sharp contraction.  Home prices rose over 8 percent per year, on average, between 2000 and 2006, but have been sinking at an average annual rate of 4 percent more recently.  Indeed, headlines in places such as California, Arizona, and Florida paint a stark picture of the boom-bust cycle experienced in many parts of the country.  For example, home prices have plunged by more than half since 2006 in places such as Merced, Stockton, and Modesto in California.  Perhaps somewhat surprisingly, though, many parts of the country are not experiencing such dramatic declines in housing prices, with many places registering price increases during the national downturn.  The metropolitan areas of upstate New York epitomize this trend.  Despite long-term weak economic growth and population loss in Buffalo, for example, home prices have risen in the metropolitan area continually over the past several years, without decline, and this housing market ranks in the top 10 percent of metropolitan areas in terms of home price appreciation so far in 2009.