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Zillow Research

Sweet Spot, Redux: An Updated Look at Markets Balancing Opportunity and Affordability

In most places, healthy job growth translates into pricey housing, as more demand for homes from people landing those jobs runs headlong into an existing and limited housing stock that is typically slow to respond to changes in employment. But a small number of places – what we call “sweet spots” – do manage to balance affordability and a strong labor market.

“Sour spots,” on the other hand, offer neither affordable housing, nor decent employment.

Earlier this year, we used data through the end of 2014 to compare metro areas on these two features. We’ve since updated the analysis with Zillow’s most recent price-to-income data, and the most recent employment data from the Bureau of Labor Statistics.

Almost three-quarters of metros analyzed (195 of 265) experienced some employment growth since the last time we ran this analysis, and slightly more than half (145 out of the 265 metros) experienced some improvement (in this case, a decline) in the price-to-income ratio.

Greely, Colorado; Madera, California; and Gainesville, Georgia, experienced the largest outright moves. A small deterioration in affordability outweighed a substantial gain in employment in Greely. More modest gains in employment and improved affordability was the story in Madera and Gainesville.

Sweet spots getting sweeter include Dalton, Georgia; Wausau, Wisconsin; Fayetteville, Arkansas; Reading, Pennsylvania; Ocala, Florida; Macon, Georgia; Evansville, Indiana; Burlington, North Carolina; Jacksonville, North Carolina; Atlanta, Georgia; Appleton, Wisconsin; and Charlotte, North Carolina.

Sour spots getting more sour include El Centro, California; New Orleans, Louisiana; Cleveland, Tennessee; Ann Arbor, Michigan; Punta Gorda, Florida; Baltimore, Maryland; College Station, Texas; Las Cruces, New Mexico; Missoula, Montana; Great Falls, Montana; Richmond, Virginia; Columbia, Missouri; and Bloomington, Indiana.

Atlanta is the largest large metro area ranking well for both affordability and opportunity, followed closely by Houston, Kansas City and Indianapolis. Among big markets that rank poorly are Washington, DC, Milwaukee and Boston.

 

Sweet Spot, Redux: An Updated Look at Markets Balancing Opportunity and Affordability