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 sixth release 98 markets are currently classified as improving under a conservative examination of local economic and housing market conditions. Among these areas is the Lincoln, Nebraska metropolitan statistical area (MSA).
The health of the Lincoln housing market is due to its position as a large regional healthcare center, the presence of the University of Nebraska, the booming agricultural sector, and the large Federal Government and state government presence because of its role as the state capital. According to home builder Jim Christo, President of Christo Design Build, “in addition, the insurance sector is very large with Lincoln Benefit Life, Farmers Mutual and many other firms either headquartered here or with a large presence here. Also, the steady stream of grandparents moving here to be close to family and to enjoy the many cultural amenities along with many twenty-somethings returning after being away for a several years, have also helped keep home builders active and the economy growing.” He went on to say that “the Kawasaki plant is very busy and Duncan Aviation, which refurbishes and upgrades business aircraft is hiring and as a result workers are upgrading their skills and that too has caused an up-tick in employment.”
Comparing educational data from the 2000 Census to the 2009 American Community Survey shows that Lincoln has experienced increasing education levels. The number of people with a high school diploma or less actually fell from 57,518 to 56,025, a decline of 2.6%. By contrast, the number of with some college rose by 3% from 38,873 to 40,129 and those individuals with an associate degree skyrocketed by 39% from 14,364 to 19,986. Similarly, the number of persons with a B.A rose by 23% from 34,615 to 42,657. Finally, the number with a professional degree jumped 12%, from 17,386 to 19,473. While the educational gains were across the board, the large rises in the number of persons with an associate degree and a B.A. respectively speaks to a workforce that is rapidly increasing its skills.
According to Jo Lewis, a mortgage loan originator with Liberty First Credit Union and President of the Nebraska Mortgage Association, “Lincoln missed the real estate bubble and thus is not suffering from a bust. This is because construction here proceeded at a steady pace as lenders refused to loosen lending standards and held true to Midwest values.“ As a result, house prices have held up well over the past few years. Prices are up 4.2% since the trough in January 2011 and are just 5.0% off their high set in July 2007.
Improving economic conditions have resulted in payroll employment being down less than 1.0% from its peak in October 2011 and up by 3.2% since the trough in July 2010. Single family permitting activity is up 1.6% on a seasonally adjusted monthly average basis from the trough set in January 2009. While new homes are being built in many parts of the Lincoln MSA, activity has been primarily centered in the city of Waverly northeast of Lincoln, in and around the city of Hickman south of Lincoln and the city of Wahoo northwest of Lincoln.