NAHB recently unveiled an index that tracks housing on the mend, the NAHB/First American Improving Markets Index (IMI). The IMI is intended to draw attention to the fact that housing markets are local and that there are metropolitan areas where economic recovery is underway. The index measures three readily available monthly data series that are independently collected and are indicative of improving economic health. The three are employment, house prices and single family housing permit growth.
For the third release, 30 markets are currently classified as improving under a conservative examination of local economic and housing market conditions. Among these areas is the Jonesboro, Arkansas metropolitan statistical area (MSA).
The health of the Jonesboro housing market is due to the presence of Arkansas State University, which employs 2,000 people; a large, growing and diversified industrial base specializing in food production (which has not felt the economic downturn like other industrial sectors); and its position as a regional healthcare center. According to Todd Wilcox, a past President of the Arkansas Home Builder Association, “construction of the new $650 to $850 million NEA Baptist Memorial Hospital and cancer center is already making a huge difference in the community. Many of the new jobs will be high paying and they are already hiring highly qualified staff and some are buying houses. If you are well educated, there are good jobs here”
Comparing educational attainment data from the 2000 Census to the 2009 American Community Survey confirms this. The number of people with a high school diploma jumped from 23,195 to 28,653, and those with some college increased from 12,518 to 14,348. The number of people with an associate degree rose from 2,159 to 3,261, and those with a B.A. increased from 7,453 to 9,485. Finally, those with graduate degrees climbed too, from 4,224 to 5,387. This is clearly an area that is heavily investing in education with a more highly skilled workforce than just a decade ago,
According to home builder Steve Schmidt, “the increase in the number of professionals and healthcare workers can’t be overemphasized. And, the fact that we are a regional banking hub, have a growing airport and recently attracted a wind turbine manufacturer speaks volumes about our high quality workforce. He went on to say that “as a result of this, even at its worst, spec building slowed down but it never stopped.” As a result house prices have held up well during the downturn. They are up 1.1% since the trough in January 2010 and are just 1.7% off their all-time high set in June 2006.
Improving economic conditions have resulted in payroll employment being just 1,600 down from its peak in July 2008 and up by 0.4% since the trough in February 2011. Single family permitting activity is up a strong 2.7% on a seasonally adjusted monthly average basis from the trough set in May 2009. While new homes are being built in many parts of the Jonesboro MSA, activity is centered in the northeast part of the city near the new hospital with additional activity in the Sage Meadow neighborhood.