How to tell if a city or
area is poised for recovery? What factors help determine whether an
economic rebound is imminent?
Experts point to a number of dynamics, including job growth
potential, population increase, first-time home-buyers, excess
condominium or office space, a vibrant downtown, education levels,
early foreclosures and the weather.
On the down side, bubble markets probably won’t see growth
again anytime soon.
Taking these issues into account, a handful of metro areas
appear well-positioned to shake off the shackles of the current
recession. Some of these cities aren’t exactly prime pool
markets, but the information provides an overall picture of where
growth is likely to occur.
No. 1: Austin, Texas
In May, the Austin metro area added 5,500 jobs — its fourth
straight month of job growth, according to theTexas Work Force
Commission. Not coincidentally, the city’s unemployment
rate then stood at a subdued 5.8 percent, which could explain why
Forbes recently ranked Austin as the best big city for jobs.
It’s still affordable to buy a home in Austin — the
average cost of a three-bedroom residence is $182,000. Combined
with good weather and a trendy, sophisticated population,
it’s little wonder the city is adding residents faster than
almost anywhere else in the nation.
Positive vibes also stem from an economy that, bolstered by
Dell, the University of Texas and the state government, is expected
to grow by $5 billion by the end of 2010.
“In terms of the economy and housing, we didn’t see
a drop-off here like they did in other parts of the country,”
says Mike Church, CEO of Cody Pools & Spas in Austin, noting an
almost nonexistent housing bubble.
“Either way, about 99 percent of our business is existing
homes — we weren’t really tied into new
construction,” he adds. “So when new home sales did
drop off some, we were OK.”
What’s more, Church says he’s dedicated the same
dollars to advertising in 2009 as he did for ’08.
“I want to make sure that people still see and hear our
name,” he says, “especially those new people moving
No. 2: Washington, D.C. Metro Area
All eyes are on the nation’s capital as lawmakers deal with
the economy — and when it recovers, the local market is
poised to go with it.
Improvements are already evident. In May the unemployment rate
in the D.C. area was 6.2 percent, putting the national rate (9.4
percent at the time) to shame. The federal government makes up a
significant portion of the area’s jobs, and that sector has
half the unemployment rate of private workers. Translation:
Washington-area residents haven’t been hit as hard as the
rest of the country by the recent crises.
Although D.C.’s was one of the first economies to dip when
the bubble burst, it was also one of the first to see a correction
in home prices, putting it ahead of the curve for recovery. With
that edge, “The local economy will be among the strongest,
generating above average incomes,” said James Diffley, group
managing director of IHS Global Insight, an economic consulting firm
based in Lexington, Mass.
That may be part of the reason that recent college graduates are
flocking to the Beltway, as stimulus money and public service
ambitions attract young professionals to the area.
“D.C. is the only place we can point to that is actually
adding jobs right now,” said Marisa Di Natale, senior
economist for Moodys.com. “The government is hiring thousands
of people to oversee both the stimulus package and all the
associated projects,” she told Reuters in June.
No. 3: Raleigh, N.C.
Still-affordable housing and an influx of college graduates have
helped make Raleigh the fourth-strongest city in the nation for job
growth, according to Forbes.
“I’ve heard it, and I’m seeing it.
Northeasterners who once moved to Florida are now coming to the
Carolinas, perhaps for better job opportunities or cost of
living,” says R’nelle Lazlo, vice president of national
marketing and business development at Blue Haven Pools &
Spas, San Diego.
“Plus, the Carolinas never had that crazy housing bubble
— home values there never went through the roof like they did
in places like California or Arizona.,” adds Lazlo, who
expects business for her firm’s Raleigh / Durham / Chapel
Hill branch to spring back in the next year or two.
Because pools aren’t the norm in seasonal North Carolina,
they’re seen more as luxury items than necessities, Lazlo
says. As a result, customers there tend to fall into higher tax
brackets, translating into more cash buyers.
Meantime, a lively downtown Raleigh welcomed 45 new businesses
last year. And the area’s Research Triangle Park remains one
of the nation’s leading high-tech research and development
centers, with major employers including IBM, Cisco Systems and
No. 4: Denver
When financial services firm Charles Schwab announced in January it
was bringing 500 new high-tech and IT jobs to Colorado beginning in
mid-2009, officials in metro Denver rejoiced.
The area, which months ago had some of the highest foreclosure
rates in the country, had turned a corner. Foreclosures were cut in
half by early summer.
Elsewhere, signs of recovery abound. An economy once heavily
reliant on energy has diversified into aerospace and bioscience,
marking an expansion into renewable sources, says Janet Fritz,
director of marketing with the Metro Denver Economic
“We also have a vibrant downtown, and a number of building
projects under way in the urban core,” she says. “Plus
we’re building up our mass transit, so you’ve got a lot
of infrastructure development happening. That’s helped out on
In fact, Denver continued gaining residents despite the
recession, Fritz says. And some of those are well-heeled
transplants from parts west.
“You’ve got some of those California immigrants
moving in who now have some money after selling their homes,”
she says. “So yes, Denver is another area that’s strong
Sunny weather, affordable housing, rising consumer confidence
and an educated workforce all combine to make Denver a safer bet
for a speedy and lasting turnaround.
No. 5: Seattle
The home to Boeing and Microsoft — not to mention the
birthplace of a certain coffee chain — has a well-educated
population and a high-tech economy primed for growth. In fact,
Moody’s recently predicted the local economy could hit an
all-time high as early as the third quarter of 2009.
The city further possesses a vital downtown that doesn’t
require cars, and carries little surplus condo or office space.
“Seattle is a diversified market, has a good base of
business, and is becoming a 24-hour city,” Stephen Blank,
senior resident fellow at the Urban Land Institute, recently told Forbes.
“It’s going to be in a good position to come
In addition, the city is considered a leading gateway to foreign
markets. The Port of Seattle recently was named a solid investment
by Fitch Ratings due to both its airport holding a virtual monopoly
over regional air serve, and its seaport’s standing as one of
the West Coast’s — not to mention the nation’s
— largest container docks.