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 fifth release 76 markets are currently classified as improving under a conservative examination of local economic and housing market conditions. Among these areas is the Jackson, Mississippi metropolitan statistical area (MSA).
The health of the Jackson housing market is due to its position as a large regional healthcare center, the large number of post-secondary educational institutions including Jackson State University and Millsaps College, the large Federal Government presence, the automobile industry and its role as the state capital. According to home builder Scott Shoemaker President of Shoemaker Homes, “with steady growth from the University of Mississippi Medical Center, Mississippi State Hospital, the Nissan automobile plant and financial services sector, new home buyers are certainly around and we as builders have been able to build better and smarter and offer buyers the right amenities at the right price point.” He went on to say that “there is also a feeling in the community that the worst is over and as a result a sense of optimism, that was absent for a while, has returned.”
Comparing educational and occupational data from the 2000 Census to the 2009 American Community Survey confirms these trends. Today there are 8,292 (or 26%) more service jobs than in 2000 and 9,159 (or 12%) more management jobs. Reinforcing these findings, the number of people with a high school diploma increased from 73,336 to 85,478, individuals with some college rose from 71,859 to 75,306 and the number of people with an associate degree jumped from 19,338 to 26,591. However, the number of individuals with a B.A skyrocketed from 52,864 to 63,643 and the number with professional degrees rose by 18% from 27,447 to 32,378. Emblematic of the changing workforce dynamics, employment in professional services grew by 27%, followed by employment in education which grew by 21%.
According to Lee Mitchell, Senior Vice President at Trustmark National Bank, “our house prices never rose like they did in many places and thus have not fallen either. In part it is because the local economy is well diversified and unemployment is low. But it is increasingly the result of foreclosures and defaults being worked out and a resulting lack of inventory.“ As a result, house prices have held up well over the past few years. Prices are up 1.0% since the trough in January 2011 and are just 11% off their high set in June 2007.
Improving economic conditions have resulted in payroll employment being down less than 4% from its peak in February 2008 and up by 1.4% since the trough in January 2010. Single family permitting activity is up 1.1% 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 Jackson MSA, activity has been primarily centered in the small town suburbs north and east of town in Madison and Rankin counties.