Improving Markets Index Expands To 99 in September

September 11, 2012

The number of improving housing markets across the country rose to 99 in September, up from 80 metros that were listed as improving in August. The index now includes representatives from 33 states as well as the District of Columbia.

The index identifies metropolitan areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months. Markets added to the list in September include such geographically diverse locations as Tucson, Ariz.; Jacksonville, Fla.; Springfield, Ill.; Greenville, N.C.; and Bend, Ore.

More metros across the country are experiencing a sustained uptick in house prices, employment and new building activity as rising consumer confidence in local market conditions pushes more people to consider a new-home purchase. That said, overly tight lending conditions for builders and buyers continue to slow this process considerably.

The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metropolitan area must see improvement in all three measures for at least six months following those measures’ respective troughs before being included on the improving markets list.


Video: NAHB Senior Economist Robert Denk Discusses Latest Improving Markets Index Report

May 8, 2012

Video: NAHB Chief Economist Discusses IMI Reaching 101

April 6, 2012

Improving Markets at 101

April 4, 2012

The number of metropolitan markets on the NAHB/First American Improving Markets Index (IMI) rose to 101 in April from 99 in March.  Markets on the list must have improved in the three critical indicators of employment, housing permits and home prices for six months or more. 

In April, 88 markets remained from the March list, 13 more were added and 11 markets dropped off.  Except for Syracuse NY, ten markets fell off the list because their relatively small house price gains that got them on the list fell below their respective prior troughs.  The average house price increase for the ten dropped markets was 0.4% compared to 3.2% for all others.  Syracuse’s housing permits fell below their previous low.

The index has continued to grow since inception in September 2011 although the past two months have shown very small growth, up one point from February to March and two points in April.  Economic and housing recovery will continue to improve but the path may not be steady as job growth slowly spreads to a wider variety of economic sectors. 

At 101, the total number of markets on the IMI is more than one-quarter of all metropolitan areas. 

As seen on the map below, the markets represented are spread across the US and include metro areas that suffered severe downturns, e.g., Detroit, and those that had much less pain, e.g. 11 Texas metros.  The primary point of the index is demonstration that markets are local and there is a wide difference in recovery speed and timing across the US.


Video: NAHB Chief Economist Discusses the Improving Markets Index for March

March 20, 2012

Improving Markets Index at 99

March 16, 2012

The March NAHB/First American Improving Markets Index stands at 99 markets or over one-quarter of all metropolitan areas.  The index measures improvement in three aspects: employment, single-family building permits and home prices.  To make the list, a metropolitan area must see improvement in all three indicators for six or more months.

At 99, the March index added 31 metropolitan areas to the 68 that remained from the February list but lost 30 metro areas primarily because of weaker house prices.  In those 30 areas, home prices had moved forward by 2.6% since their trough while the areas that remained on the list had an average 4.7% increase since their respective troughs.  Small declines placed the 30 area back below their previous trough. 

Four metro areas (Anchorage AK, Washington DC, Jackson MS and Iowa City IA) that fell off the list in the past made it back on in less than six months because the employment data was revised by the Bureau of Labor Statistics and the previous drop was eliminated.

Two-thirds of the states have at least one metro on the list and they are geographically spread across the country.  A complete list and the change in each indicator can be found at www.nahb.org/imi.  Texas leads the states with 12 metro areas, followed by 9 in Florida and 8 in Michigan. 

The index highlights markets that are improving, some because the underlying damage was not as severe and some because their bottom has been so far from normal that home buyers and investors are finding bargains are available.


Improving Markets Index: Bismarck, ND MSA

January 3, 2012

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 Bismarck, North Dakota metropolitan statistical area (MSA).

The health of the Bismarck housing market is in part due to its position as a large and rapidly growing regional healthcare center, its excellent infrastructure and its role as the state capital.  These factors have made Bismarck a popular destination for retirees from other parts of North Dakota as well as for many other individuals.  Of late, however, local growth is primarily due to the recent discovery of the Bakken shale and the even larger and more recently discovered Three Forks-Sanish formation.  While they are both about 100 miles away, their effects are being felt in many ways.  According to home builder Chad Moldenhauer, the President of K & L Homes, “oil and gas service companies are setting up shop here as are pipeline and oil drilling firms, and the oil refineries are booming.”  He went on to say that “oil industry executives and senior managers are now moving their families here and with growth at both Medcenter One and St. Alexius, there is an increase in the number of high income households who not only want nice housing but often want new houses.”   As a result, education levels are rising in the area.    

Comparing educational and industry data from the 2000 Census to the 2009 American Community Survey confirms these impacts.  Today there are 3,012 (or 17%) more management jobs than in 2000 and 816 (or 25%) more professional jobs.  Reinforcing these findings, the number of people with a high school diploma increased from 15,837 to 18,239 and individuals with some college rose from 14,129 to 14,806.  The number of people with an associate degree jumped from 6,886 to 8,958, those with a B.A. jumped from 11,814 to 15,344 and the number of those with a professional degree increased from 3,808 to 4,705. Emblematic of the changing workforce dynamics, employment in the finance, insurance and real estate industry grew by 31% followed closely by employment in professional services which increased by 25%. 

According to Eddy Mitzel, President of Mitzel Homes and the North Dakota Association of Builders, “our very low unemployment rate, the construction of several coal fired gasification plants, the new wind farm, increasing immigration from western North Dakota, the new cancer care center and the oil boom have allowed us to totally skirt the recession.“  As a result, house prices have performed well over the past few years.  Prices are up 7.9% since the trough in February 2010 and have now surpassed the previous high set in July 2011.    

Improving economic conditions has resulted in payroll employment higher than ever with 64,800 employed persons, breaking the previous high of 64,500 set in October 2011 and up by 7.1% since the trough in December 2007.  Single family permitting activity is up a robust 10.7% 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 Bismarck MSA, activity has been primarily centered in the northwest part of the City of Bismarck and the southwest part of the City of Mandan.


Improving Markets Index: Burlington, VT MSA

December 14, 2011

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 Burlington, Vermont metropolitan statistical area (MSA).

The health of the Burlington housing market is in part due to its position as a regional healthcare center, the large number of post-secondary educational institutions including the University of Vermont and St. Michael’s College and the steady stream of retirees who continue to find Burlington appealing.  However, local growth is primarily due to a the rise in software development, anchored by IBM and now Dealer.com, the increasing popularity of telecommuting, and the growing appeal of the local culture, which promotes energy efficiency, eating locally produced food, and generally being “green.”  According to home builder Chris Snyder of Snyder Homes, “new home buyers frequently want energy efficient features including solar panels, geothermal heating systems, passive solar designs and so on.  And it’s cheaper to build that way than retrofit an existing house. ” He went on to say that “many of these buyers pay cash or make large down payments and telecommute to jobs in New York City or Boston.”   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 5,125 (or 37%) more service jobs than in 2000 and 3,213 (or 58%) more management jobs.  Reinforcing these findings, the number of people with a high school diploma increased from 35,529 to 36,716, individuals with some college rose from 21,251 to 22,006 and the number of people with an associate degree climbed from 11,338 to 13,119.  However, the number of individuals with a B.A skyrocketed from 27,512 to 32,418 and the number with professional degrees jumped from 16,713 to 18,711. -Emblematic of the changing workforce dynamics, employment in professional services grew by 28%, followed by employment in education which grew by 13%.   

According to Jose Leavitt of Otter Creek Awnings, Sunrooms and Custom Closets, “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 good and unemployment is low, and in part it it’s due to Yankee frugality and the fact that builders here are all very small and were able to quickly cut back on production.“  As a result, house prices have held up well over the past few years.  Prices are up 1.9% since the trough in January 2010 and are less than 5% off their high set in September 2007.     

Improving economic conditions have resulted in payroll employment being just 1,200 down from its peak in August 2011 and up by 5.1% since the trough in September 2009.  Single family permitting activity is up a robust 5.3% on a seasonally adjusted monthly average basis from the trough set in March 2011.  While new homes are being built in many parts of the Burlington MSA, activity has been primarily centered in the towns and villages surrounding Burlington including Hinesburg, Sherlock, Shelburne, South Burlington, Williston and Winooski.


Improving Markets Index: Monroe, LA MSA

December 8, 2011

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.


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