Tightest Housing Markets in the U.S.

A simple measure of tightness in a market for owner-occupied housing is the homeowner vacancy rate (number of homes for sale divided by the number either for sale or owner-occupied). Builders are often interested in markets that are tight by this measure, because it indicates prospective buyers will have difficulty finding a suitable home among the available existing units. 

Several federal government surveys provide homeowner vacancy rates, but the one with the greatest geographic detail by far is the Census Bureau’s American Community Survey (ACS).  In a recent study, NAHB tabulated the most recent (2010) ACS this data for all metropolitan areas in the country.

Overall, the tightest markets tend to be relatively small: Corvallis, Oregon (with a homeowner vacancy rate of 0.23%), Lebanon, Pennsylvania (0.49%), Billings, Montana (0.54%), San Angelo, Texas (0.61%), and Eau Claire, Wisconsin (also 0.61%). 

Because it may seem difficult to compare these areas to larger markets, NAHB also looked separately at the 27 metropolitan areas that have at least 500,000 owner-occupied homes.  Homeowner vacancy rates for these 27 areas range from 1.43 percent to 4.65 percent.  The ten tightest large markets are shown below.

The two tightest large markets in 2010—Nassau-Suffolk, NY and Santa Ana-Anaheim-Irvine, CA—were also the two tightest large markets the last time NAHB looked at the ACS data in 2008.

The NAHB study provides a rundown of the top-10 metros according to nine key measures, including: owner-occupied housing units; homeownership rate; home owner vacancy rate; share of single-family detached homes; value of homes owned; home owner incomes; growth in stock of single-family detached homes; and share of homes built recently. It also has a spreadsheet that shows how more than 350 other metro areas stack up in each category.

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16 Responses to Tightest Housing Markets in the U.S.

  1. Shawn says:

    Were the price declines in the 2008 tighest markets less than the price declines in general? I’m wondering how useful the statistic is.

    • Paul Emrath says:

      To answer your question narrowly, for the 10 areas shown in the table, the 2008-2010 change in the median value of homes owned ranged from a 19.8% decline for Warren-Troy-Farmington Hills (from $188,600 to $151,300) to a 2.3% increase for Pittsburgh (from $119,400 to $122,200).

      On the broader issue you raise, you are absolutely correct to be cautious about evaluating a housing market based on a single statistic. Specifically for that reason, the full article on which the blog post is based (http://www.nahb.org/generic.aspx?sectionID=734&genericContentID=176691&channelID=311) provides a table with all 384 metro areas listed alphabetically, and for each shows
      • population
      • #owner-occupied units
      • home-ownership rate
      • homeowner vacancy rate
      • %single-family detached
      • median home value
      • median income of home owners
      • increase in owner-occupied units
      • %built recently
      The table also shows where a metro ranks according to each one of these measures. Our hope is that a top ten list piques interest and leads people to the full article, where they’ll be able to evaluate a metro area based on this combination of statistics.

      If you want to see how things have may have changed in a particular area, you can also get a similar table in the article based on 2008 data (http://www.nahb.org/generic.aspx?sectionID=734&genericContentID=138864&channelID=311).

      We think you’ll find this a relatively quick and easy way to get a handful of key statistics for a local housing market, compared to compiling them one-at-a-time yourself from the Census Bureau’s web site, or paying a consultant to do it.

  2. Vacancy rates and the other statistics you suggest checking are useful tools in calculating potential strength of future housing demand but one must also look at a multitude of other factors including (and perhaps more importantly) the underlying ratios of permits to population gain and permits to employment gain.

    Snapshot statistics are often misleading and proper analysis requires attention to longer term trends.

  3. Thank you for the information you’ve share to us.. I really had a great time reading your very informative article.

  4. [...] Read the original article at the National Association of Home Builder blog, Eye on Housing. [...]

  5. [...] – Homeowner vacancy rate in Nassau-Suffolk, NY and Santa Ana-Anaheim-Irvine, CA. The two metros had the lowest homeowner [...]

  6. [...] – Homeowner vacancy rate in Nassau-Suffolk, NY and Santa Ana-Anaheim-Irvine, CA. The two metros had the lowest homeowner [...]

  7. [...] the original article at the National Association of Home Builder blog, Eye on Housing. Share this:TwitterFacebookLinkedInLike this:LikeBe the first to like this [...]

  8. Walla Walla says:

    That must mean I live in the loosest market in the country… Walla Walla has so many houses on the market, that you feel like you can’t give them away. Half the builders in town have gone out of business in the last 2 years, and the houses that are left, that used to sell in the $400K range, are now in the mid $200′s.

    I still see some new housing starts, but they tend to be custom homes, over $500K. Of course, I’m assuming those are people that have stock portfolios, and are actually still making money as the market goes up.

    I’d like to see it tighten up here too, but it’s not going to happen until the repo market dries up. Right now it’s full of houses that people bought in 2006-2008, when the market was through the roof. A friend of mine had his $850K house repossessed by the bank, and then they turned around and sold it for $197K. Can you say OUCH?

  9. John Holmes says:

    I think the only real housing market right now is in custom high end homes and in renovation in high end neighborhoods….
    other than that, it is pretty much in the dumpster……

    several years away from a healthy job market and healthy home building market……

    • Daniel R. Levitan says:

      John:

      I am seeing several “healthy” local markets across the country for production housing and even in markets that are still facing challenges, builders who are able to create viable USPs are achieving good sales rates.

      Dan

  10. Jodi Summers says:

    If Southern California is the second strongest market, then we are still in a weak position. The Santa Monica Property Blog notes that according to the California Association of Realtors concluded that 2011 home sales statewide increased by 1.1% to 497,860 > compared to 492,290 homes sold in 2010. The statewide median price declined by 6.3% to $285,950.

    Here is Southern California sales and price activity by county over the year to December:

    • Los Angeles County: unit sales declined by 4.6% over the year to December, and the median price fell by 6.5% to $306,950.

    • Orange County: sales fell by 5.6%, while the median price dropped by 3.0% to $484,630.

    • Riverside County: sales of existing homes dropped by 4.3% and the median price dipped by 0.8% to $203,650.

    • San Bernardino County: sales increased by 4.0%, while the median price fell by 4.7% to $128,450.

    • San Diego County: unit sales increased by 5.6%, but the median price was down by 4.2% to $359,930.

    • Ventura County: existing home sales rose by 5.3%, while the median price plunged by 11.4% to $391,060.

  11. [...] Read the original article at the National Association of Home Builder blog, Eye on Housing [...]

  12. [...] Read the original article at the National Association of Home Builder blog, Eye on Housing [...]

  13. [...] that Orange County has the second strongest new home demand in the country.  Read full story Here Share this:StumbleUponDiggRedditLike this:LikeBe the first to like this post. Filed under [...]

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