I am talking more about investment potential, less about personal preference. I look at official data, Florida comprises more than 50% of the top job creation states in the top 25 fastest job creation counties list. From real estate investment point of view, land-lock situation is a must to guarantee your future return. Although NC, TX, Washington may be good states as well, they don’t have the land-lock geo formation. Their supply is more elastic, and yet, so far, they lag behind Florida in every official statistics in terms of in-migration and job creation percentage. No, I don’t mean Florida currently has absolutely higher number of jobs. That’s not the case. The case is that it as a state has the highest new job creation percentage (delta). But on metro wise consideration, Las Vegas remains as number one. But Nevada is behind Florida in terms of total score for investment potential. That’s why Carl Icahn is scouping up undervalued home builders in Florida like WCI, but not interested in other places. Billionaires do their homework. I happen to share his vision.

You want the risk to be low and return to be high. 30 min from downtown in a great community may sometimes offer better Risk/Return ratio. Newer model may reduce your repair cost. In DC region where I live, for example, in some locations, 30 min from downtown is often a better location than downtown itself. Actual downtown is now moved away from traditional downtown. When good times come back later, the return in close-in suburban location may be comparable to that in downtown, or even higher. Please note that Manhattan is unique. Manhattan’s downtown premium is real and high due to its unique geo-economical factor. However, other cities may not behave the same way. In DC region, new “downtown” such as Tysons Corner or Rockville may even carry higher premium than traditional DC downtown. It all depends.

Good: The economy and especially global economies are going strong, money is still available from countries like China and India.

Evil: Past period of easy credit has overdone itself. Banks are now tightening credit that may increase cost of doing business. Housing sales and price may go down further.

However, the Good may be stronger than the Evil. If that’s the case the slump may be over in shorter period than we expect. In regular economic cycles, the Good side was not as strong as today’s level, therefore recession should have been entered by now if we are in a normal cycle. But today, due to the extremely resilent good power, recession may be avoided. That’s my hope. Hope is simply hope.

Fear is now feeding on fear, deepening the psychological apprehension in any buyer who has any interest to buy. Everybody seems to have made collective consensus that home price will drop more in coming months and years. This viscious cycle will go on, stripping away any remaining buyer’s margining desire to buy. I don’t think the strike from buyers are caused by lack of money or even lack of credit. The real reason is the self-feeding fear frenzy that may knock RE market to even lower level in coming months and years.

Here is the ranking of Percent Change in House price from 2001 to 2006:
(Source: OFHEO)
Miami: 128%
LA: 128%
Wash DC: 102%
Phoenix: 100%
San Diego: 92%
NYC: 78%
Philly: 74%
San Francisco-Oakland: 69%
Seattle: 67%
Boston: 50%
Chicago: 47%
Minneapolis: 42%
Houston: 26%
Atlanta: 24%
Dallas: 18%
Detroit: 12%