Trulia report highlights disparities across metro areas

Since housing prices hit rock bottom in 2012, the experiences of homeowners and renters have varied widely based on where they live, according to a recent Trulia report.

The report, “Turnaround Towns and Towns Stuck in the Downturn,” lists the best and worst places to buy or rent a home since the housing market bottomed out.

The lists take price into account and also incorporate related factors such as job prospects and wages, vacancy rates, home values and how much rent has increased in particular metro areas.

Data collection methods

To create the lists, Trulia pulled wage, covered employment and unemployment rate data from the Bureau of Labor and Statistics’ (BLS) Quarterly Census of Employment and Wages and Local Area Unemployment Statistics programs.

The four-quarter rolling average was taken for all the BLS metrics, and then each metro was ranked and scored based on the percent change from the first quarter of 2012 to the first quarter of 2015, the most recent data available.

The percent change in the U.S. Postal Service vacancy rate by metro was ranked and scored, and the percent change in the Zillow Home Value Index by metro was used to rank and score on price appreciation for the owner’s perspective, where larger price increases were assigned better ranks and scores.

For the renter’s perspective, the Zillow Rent Index was used to rank and score each metro on rental price appreciation, where larger price increases since 2012 were assigned worse ranks and scores.

Revealing the results

According to the report, some metros have seen big gains in each category, while others have seen sluggish economic growth and lagging prices. Still, certain areas have experienced a bit of a mix — booming employment accompanied by a sluggish housing market, or vice versa.

Thanks to strong growth in both the labor and housing markets, these metros were great places to buy a home around 2012:

• San Francisco
• Anaheim, California
• San Jose, California
• Denver
• Seattle

Homeowners in these metros didn’t fare as well:

• Albuquerque, New Mexico
• Gary, Indiana
• Silver Spring, Maryland
• Camden, New Jersey
• Syracuse, New York

In the years since the market bottomed out, homeowners in Denver and Raleigh, North Carolina, have continued to experience strong gains. But homeowners in Silver Spring, Maryland, and Albuquerque, New Mexico, have not been as fortunate.

Trulia noted that rental markets are a different story, however.

“The things that make great ownership towns — rapid price appreciation and declining vacancy rates — tend to make them tougher places to rent. Rental markets need ample inventories and strong economies,” Trulia said in the report.

The best metros for renters, based on strong wage growth and modest rent increases, are:

• Winston-Salem, North Carolina
• Fresno, California
• Albany, New York
• Austin, Texas
• Kenosha, Wisconsin

Ranking among the worst metros for renters were New Orleans and Los Angeles, where slower-than-average employment and wage growth, combined with a falling vacancy rate and average rent growth, have made for a fairly uncomfortable set of circumstances for renters.

“While both owners and renters can appreciate the benefits of improving labor market conditions, they likely have different ideas of what constitutes a favorable housing market,” Trulia concluded. “Owners are happiest when vacancy rates are declining and home values are on the rise. Renters have more leverage when vacancy rates are increasing and rent prices are flat or falling. But rising vacancy rates and falling rents are not often seen in areas with heady labor market fundamentals, and low rent and high vacancy rates don’t do you much good if you can’t find and keep a good job.”

Email Amy Swinderman.