Forbes just published an article about top ten most recession-proof American cities.
The selections are based primarily on low unemployment, home prices that continue to rise, and the likelihood that the local economy will continue to grow.
By all three of those criteria, it’s no surprise to me that Austin came in at #3.
But what I find strange is the inclusion of San Jose and Seattle in the list. Home prices in those cities may have continued to rise, but as I understand it, those are among the cities hardest hit by the hyperinflation in home prices. In fact, the article mentions that the median home price in San Jose is over $830,000.
Perhaps the economy in those cities is healthy enough that it will continue to attract enough people to support those ridiculous prices, but from what I’ve read, the cities with home prices that have been speculated into the stratosphere will be hit hard by the building recession. It won’t take many job losses in those locations for that house of cards to come tumbling down.
Of course, this is Forbes, which seems to operate in a different reality than I do. The only mention made in the article to the possible severity of the recession is this: “In his statements to Congress’ Joint Economic Committee earlier this month, Federal Reserve Chairman Ben Bernanke predicted the economy would possibly move into recession in the first half of 2008 but begin to rebound in the second half.”
I guess America’s Relatively Recession-resistant Cities wouldn’t have made nearly as catchy a title.
Categories: Economics