MSNBC.com recently reported that San Jose and Boston are among cities set for a real estate rebound.
"For real estate to do well you want to see two things: that incomes are growing rapidly... and that the growth in jobs attracts other people to that market."This is right in line with our post from January 18th about the Arlington real estate market, Slow and Steady Wins the Real Estate Race.
"Lots of local colleges = smart people = job growth = higher employment rates = stronger real estate market. That's a lot to digest all at once, but the bottom line is that strong employment and healthy real estate go hand-in-hand."
Another important factor mentioned in this article is that, "markets that lost less value in the housing bust have the potential to recover faster."
In other words, the bigger the boom, the harder the fall, the longer the climb back up. The Boston market is poised to rebound and make a faster comeback because it does not have as far to go to get there.
If you look at areas that had big housing booms (Florida, Nevada, areas in California) - there were significant investments in sub-developments and new construction built on specs. When the market went bust, these areas were left with a lot of supply, little demand and not enough business growth to keep people employed and paying their mortgages.