They're not in California.
Or Florida. Or Arizona, or Nevada or anywhere in the Western Time Zone. Instead, the twenty highest performing metro areas in the country are concentrated in the Texas and the Great Plains, according to the newest Metro Monitor from the Brookings Institution. Here's the map. The bluer the dot, the stronger the city's housing prices, employment and economic production. The redder the dot, the weaker the city.
To tease out some lessons, I spoke with Brookings fellow Howard Wial about the new report. The least surprising thing he said was that the overall story is the same: bubble cities are still hurting, and state capitals are still treading water. The most surprising thing he said was about the unevenness of the housing bubble. Here's an edited transcript:
What's the most important thing we learn in this report?
Housing is not overpriced in most large metro areas, if it ever was. You look at the bubbles in California and Florida and in the northeast, and you think the housing bust is shared nationwide. But in the middle of the country, housing prices grew in line with employment, wages and interest rates. That's one big reason why the Midwest is doing relatively well.