NAHB recently unveiled an index that tracks housing markets 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 fourth release 41 markets are currently classified as improving under a conservative examination of local economic and housing market conditions. Among these areas is the Monroe, Louisiana metropolitan statistical area (MSA).
The health of the Monroe housing market is in part due to its position as a regional healthcare center and low tax rates. These factors have induced retirees to move to Monroe, but local growth is primarily due to the growth of CenturyLink, two excellent colleges, and the Haynesville-Bossier Shale. While the Shale is about 100 miles away, the effects of it are being felt in many ways. According to home builder Conrad Blanchard of Casual Concepts, “oil and gas service companies are setting up shop here as are pipeline and oil drilling firms.” He went on to say that “keeping CenturyLink’s headquarters in town even after the takeover of Denver-based Quest has been a boon to the community. Many executives are relocating here and these new households not only need housing but often want new houses.” As a result, education levels are rising in the area.
Comparing educational and occupational data from the 2000 Census to the 2009 American Community Survey confirms these impacts. Today there are 4,107 (or 19%) more management jobs than in 2000 and 564 (or 5%) more service jobs. Reinforcing these findings, the number of people with a high school diploma increased from 32,451 to 38,100 and individuals with some college jumped from 23,010 to 25,701. The number of people with an associate degree climbed from 2,825 to 4,832, those with a B.A grew from 14,278 to 18,297 and the number of professional degrees increased from 7,575 to 7,968. Emblematic of the changing workforce dynamics, employment in the information industry grew by 41% followed closely by employment in professional servicers which increased by 38%.
According to Jonathan Hill, President of Hill Construction, “our house prices never rose like they did in many places and thus have not fallen either. In part it is because we are a small place and that has insulated us from the ups and downs of the economy.“ As a result, house prices have held up well over the past few years. Prices are up 4.1% since the trough in June 2010 and have now surpassed the previous high set in August 2008.
Improving economic conditions have resulted in payroll employment being just 3,900 down from its peak in September 2007 and up by almost 1% since the trough in March 2011. Single family permitting activity is up a robust 3.8% on a seasonally adjusted monthly average basis from the trough set in March 2009. While new homes are being built in many parts of the Monroe MSA, activity has been primarily centered in the Town of Sterlington due to its proximity to CenturyLink as well as areas in and around the City of West Monroe, which is known for its excellent schools.