Improving Markets Index: Grand Junction, CO MSA

June 15, 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 ninth release 80 markets are currently classified as improving under a conservative examination of local economic and housing market conditions.  Among these areas is the Grand Junction, Colorado metropolitan statistical area (MSA).

The health of the Grand Junction housing market is due to its diversification away from just oil and gas following the oil shale bust of 1982, strong growth at Mesa State University, a large number of state employees, and, being the largest city between Salt Lake City and Denver, its position as a very large regional healthcare center.  The rise of the healthcare industry can be seen by the recent additions at both St. Mary’s Hospital and Community Hospital.  Grand Junction also offers abundant outdoor activities, spectacular scenery, top-notch recreational opportunities and is a major mountain biking destination and also has a number of nearby ski resorts and vineyards.  As such, tourism and retirees are also fueling the local economy.      

According to home builder Nate Porter, President and owner of Porter Homes LLC, the continued expansion of the healthcare industry, and the growing importance of tourism have collectively shielded the community from the worst of the recession and the recent decline in gas prices.  As for the building industry, we have been holding our own due to an influx of retirees and Gen X-ers attracted to Grand Junction for its high quality healthcare, abundant and well paying healthcare jobs, and quality of life (biking, hiking, fishing and skiing).”  Mr. Porter went on to say that “many home buyers realize that it is cheaper to buy an energy efficient green home rather than a foreclosure and that attitude translates into demand for new homes as there are only a limited number such houses available.  Collectively because of all these diverse forces, construction activity is slowly rebounding.”          

Comparing 2010 American Community Survey data for Grand Junction to the US offers strong evidence that Grand Junction is doing well and insight into why.  The percentage of persons with some college but no degree is 23.0% higher than in the rest of the country and the percentage with a bachelor’s degree is 18.4% higher than it is everywhere else.  In addition, the percentages of persons employed in educational services, healthcare and social assistance and in the arts, entertainment and recreation industries are 17.2% and 10.9% higher respectively than the national average.  Lastly, the percentage of owner-occupied units stands at 72.5% versus 65.4% for the nation and the number of vacant housing units, be they owner-occupied units or rental units, is just 8.6% in Grand Junction compared to 13.1% elsewhere.          

According to Rich Buffington, an associate board member of the Home Builders Association of Northwestern Colorado, “Grand Junction is perking up because things always improve and we are more accustomed to cycles because of the role energy plays in our economy.  In addition, many folks who used to work in the oil and gas industry here, now work in the Bakken shale in North Dakota but continue to live here with the same being true for many subcontractors.  As such, the local economy is much healthier than would otherwise be the case.  In addition, education, healthcare and the continued influx of retirees are also part of the reason for the turnaround in our economy local economy.”  Whatever the cause, house prices are definitely on the mend.  Prices are up 0.7% since the trough in July 2011 and appear on track to continue to increase in the days ahead.        

Improving economic conditions have resulted in payroll employment being down less than 10% from its peak in August 2008, and up by 3.4% since the trough in January 2010.  Single family permitting activity is up 6.2% on a seasonally adjusted monthly average basis from the trough set in June 2011.  While new homes are being built in many parts of the Grand Junction MSA, activity is currently centered northwest of Grand Junction in the City of Fruita, west of Grand Junction, in the Redlands, and in the “northwest.” 


Improving Markets Index: Bloomington, IN MSA

June 7, 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 eighth release 100 markets are currently classified as improving under a conservative examination of local economic and housing market conditions.  Among these areas is the Bloomington, Indiana metropolitan statistical area (MSA).

The health of the Bloomington housing market is due to its position as a very large regional healthcare center and the Indiana University and all of its research facilities and associated high-tech firms.    Bloomington is also home to a large Baxter Pharmaceuticals facility and is headquarters to the Cook Group Incorporated, a company primarily involved in manufacturing of medical devices.  As a result, Bloomington’s concentration of employment in the life sciences and medical devices is many times greater than the U.S. average and has been growing rapidly in recent years.  

According to home builder Aaron Stolberg, President and Owner of WS Homes, Inc., the continued expansion of the University and the growing importance of healthcare and medical devices have collectively shielded the community from the worst of the recession.  As for the building industry, we have been doing better of later due to construction lending being extended by smaller local banks.”  He went on to say that “another reason activity is up is because more than half of all buyers are retires and almost as many are from out of town.  Lastly, pent-up demand from buyers who were on the fence just a few months ago is finally materializing because of an improving economy and a rise in exports.  As a result of these different forces, construction activity is slowly and steadily improving.”          

Comparing 2010 American Community Survey data for Bloomington to the US offers strong evidence that Bloomington is doing well and some insight into why.  The percentage of persons with a graduate or professional degree is 43% higher than in the rest of the country and the median age is almost 16% lower in Bloomington than it is everywhere else.  In addition, the percentages of persons employed in educational services, healthcare the social assistance industry and in the arts, entertainment and recreation industry are 48% and 35% higher respectively than the national average.  Lastly, the percentage of owner-occupied units stands at 73.4% versus 65.4% for the nation and the number of homeowners with a mortgage is just 65.1% in Bloomington, compared to 67.2% elsewhere.          

According to John Bethell, President of the John Bethell Title Company, “Bloomington is doing better than many places because retirees continue to move here, despite the poor economy, due to the close proximity to Indianapolis, the University and all it has to offer the generally low tax rates.  In addition, the anticipated construction of I-69 is already an economic boon to the entire community and the Westside in particular. It is already transforming the area and residential and commercial construction activity is heating up.”  Whatever the cause, house prices are definitely on the mend.  Prices are up 9.1% since the trough in January 2011 and down just fourth-tenths-of-one-percent from their peak set in July 2007.        

Improving economic conditions have resulted in payroll employment being down less than 8% from its peak in August 2008, and up by 1.3% since the trough in December 2008.  Single family permitting activity is up 19.9% on a seasonally adjusted monthly average basis from the trough set in September 2011.  While new homes are being built in many parts of the Bloomington MSA, activity is currently centered in preapproved subdivisions in the City of Bloomington, northwest of Bloomington in the Town of Ellettsville and the west side of town where I-69 is being built.  


Improving Markets Index: Tulsa, OK MSA

May 4, 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 seventh release 101 markets are currently classified as improving under a conservative examination of local economic and housing market conditions.  Among these areas is the Tulsa, Oklahoma metropolitan statistical area (MSA).

The health of the Tulsa housing market is due to a well diversified economy based on aviation, machinery and electrical equipment manufacturing, energy and energy services and its position as a large regional healthcare center.  Tulsa also benefits from the University of Tulsa and Oral Roberts University and the Tulsa Port of Catoosa; the most inland river port in the U.S. with access to international waterways.  Tulsa is also home to an American Airlines maintenance base at Tulsa International Airport which is the city’s largest single employers and the largest maintenance facility in the world.  Finally, Tulsa is headquarters to the Dollar-Thrifty Automotive Group, and many oil and gas related firms including the Williams Companies, SemGroup and Excel Energy. 

According to home builder Glenn Shaw, owner of Shaw Homes, Inc., the combination of a pick-up in oil and oil services, the continued growth of healthcare, and people generally feeling better about the local economy and secure that their paycheck will last for a while longer is invigorating buyers.”  He went on to say that “because inventory is low and there is little to choose from, buyers can now sell their existing homes causing both the move-up market and the move-down market to do well.”         

Comparing 2010 American Community Survey data for Tulsa to the US offers strong evidence that Tulsa is doing well and some insight into why.  The unemployment rate is almost 22% lower in Tulsa than in the rest of the country, while the labor-force participation rate is slightly higher and the average age of the population slightly lower.  In addition, the percentages of persons employed in natural resources, construction and maintenance occupations is about 20% higher than the national average as is the number employed in manufacturing.  Because the local economy is doing well, the number of vacant housing units, be they owner-occupied units or rental units, is 14% lower than what it is for the nation as a whole and the percentage of owner-occupied units stands at 67.1% versus 65.4% for the nation.  Lastly, the number of persons with high school diplomas, with some college, and with associate degrees is consistently 5% higher than for the county as a whole.              

According to Jeff Dunn, President of Millcreek Lumber & Supply Company, “Tulsa is doing well partly because we missed the real estate boom of the first half of the decade and thus do not have that many foreclosures or defaults or buyers who have lost money on their home.  Another contributing factor is the increasing importance of energy.”  Whatever the cause, house prices are definitely on the mend.  Prices are up 4.9% since the trough in February 2011 and are just 4.4% off their peak set in November 2009.        

Improving economic conditions have resulted in payroll employment being down just 4.0% from its high in September 2008, and up by 3.9% since the trough in February 2011.  Single family permitting activity is up 1.6% on a seasonally adjusted monthly average basis from the trough set in October 2010.  While new homes are being built in many parts of the Tulsa MSA, activity is now primarily centered in the Cities of Bixby, Broken-Arrow, Jenks, Owasso and Tulsa all of which are in Tulsa County.


Improving Markets Index: Boise, ID MSA

April 30, 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 seventh release 101 markets are currently classified as improving under a conservative examination of local economic and housing market conditions.  Among these areas is the Boise, Idaho metropolitan statistical area (MSA).

The health of the Boise housing market is due to its position as a large regional healthcare center, the presence of Boise State University, the large Federal government presence and its role as the state capital and thus the large number of state government workers.   Boise is also the headquarters for Boise Cascade, Albertsons, J.R. Simplot and several other major companies.  Finally, there is a large high-tech presence in Boise anchored by the headquarters of Micron Technologies with other firms like Hewlett-Packard, Sybase, Microsoft, having sizable facilities in town.    

According to home builder Bobbie Schultz, Owner of Jordan Homes LLC, the combination of a pick-up in manufacturing activity, the continued growth of healthcare, and people generally feeling that the worst is over is causing people to buy rather than continuing to wait.”  She went on to say that “because inventory is very low and there is little to choose from, when retirees move here or when a local family wants more space more often than not they wind up building a new house.  As a result of these different buyers, construction activity is picking up both at the low end of the market and at the high end.”        

Comparing 2010 American Community Survey data for Boise to the US offers strong evidence that Boise is doing well and some insight into why.  The unemployment rate is almost 10 percent lower in Boise than in the rest of the country, while the labor-force participation rate is slightly higher and the average age of the population is almost 10 percent younger.  In addition, the percentages of persons employed in professional, scientific and management and administrative occupations and in public administration are both about 13 percent higher than the national average.  Because the local economy is doing well, the number of vacant housing units, be they owner-occupied units or rental units, is 33 percent lower than what it is for the nation as a whole and the percentage of owner-occupied units stands at 68.2% versus 65.4% for the nation.         

According to Pat Minegar, President of A-1 Heating and Air Conditioning, “Boise is doing better because residents from high tax states like California, Oregon and Washington are moving here to save money and because this is a great place to raise kids.  In addition, existing homeowners are again investing in their homes and that helping put a floor under prices.“  Whatever the cause, house prices are definitely on the mend.  Prices are up 2.4% since the trough in May 2011 and are expected to continue rising going forward.      

Improving economic conditions have resulted in payroll employment being down just 6.8% from its peak in March 2007, and up by 2.5% since the trough in June 2010.  Single family permitting activity is up 3.7% 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 Boise MSA, activity is now primarily centered in the Cities of Eagle, East Boise and Meridian all of which are in Ada County.


Improving Markets Index: Evansville, IN-KY MSA

April 20, 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 seventh release 101 markets are currently classified as improving under a conservative examination of local economic and housing market conditions.  Among these areas is the Evansville, Indiana-Kentucky metropolitan statistical area (MSA).

The health of the Evansville housing market is due to its diversified economy and its being the healthcare, industrial, retail, and transportation center for the tri-state region of Indiana, Illinois and Kentucky.   In addition, Evansville also benefits substantially from the presence of the University of Southern Indiana and the University of Evansville.  Finally, Evansville is also a major manufacturing center with large regional facilities of Toyota Motor Corporation, Bristol Myers Squibb, ALCOA and a number of plastics operations.   

According to home builder Kenny Reinbrecht, Owner of Reinbrecht Homes, Inc. the combination of a pick-up in manufacturing activity, the continued expansion of healthcare, and people generally feeling more secure in their jobs is causing people to buy a house rather than continuing to wait.”  He went on to say that “there is activity both at the low end of the market and at the high end and that some retirees are now looking to move here and that is also helping the housing market.”        

Comparing 2010 American Community Survey data for Evansville to the US offers strong evidence that Evansville is doing well and some insight into why.  The unemployment rate is almost two percentage points lower in Evansville than in the rest of the country, and the percentages of persons employed in production, transportation and material moving occupations and in manufacturing are 39 percent and 88 percent higher respectively than the national average.  Also, the percentage of government workers is about half the national average.  Because the local economy is doing well, the number of vacant housing units, be they owner-occupied units or rental units, is 21 percent lower than what it is for the nation as a whole and the percentage of owner-occupied units stands at 71.5% versus 65.4% for the nation.         

According to Sean Miller, Corporate Sales Manager of Benthall Brothers, Inc., “Evansville missed the real estate run-up and is thus not suffering the aftermath.  As a result house prices have not fallen much and therefore few have lost money on their home.  In part it is because inventories are low and banks did not lend.“  Whatever the cause, house prices have held up well over the past few years.  Prices are up 2.1% since the trough in April 2011 and are just 5.4% off their high set in June 2007.      

Improving economic conditions have resulted in payroll employment being down just 1.5% from where it was in January 2008, the start of the recession, and up by 4.6% since the trough in July 2009.  Single family permitting activity is up 1.9% 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 Evansville MSA, activity is now primarily centered in Vanderburgh County with some construction also taking place in Warrick County.


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.


Improving Markets Index: Longview, TX MSA

March 6, 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 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 Longview, Texas metropolitan statistical area (MSA).

The health of the Longview housing market is due to its position as a regional healthcare center, the presence of the East Texas Oil Field and Haynesville-Bossier Shale, a large number of oil service companies that have benefited from the high price of oil and a significant specialty chemicals industry.  According to home builder Scott Hamilton, President of Scott Hamilton Custom Homes, “the natural gas industry has also been quite active and that and other things have increased the demand for high-tech blue-collar workers such as certified welders.  Moreover, since the last oil patch bust there has also been a strong push to diversify the economy away from hydrocarbons and that has also helped.”  He went on to say that “the low regulatory burden across the state has made us more competitive and the stream of retirees moving here has also helped keep home builders active and the economy growing”     

Comparing 2010 American Community Survey data for Longview to the US offers strong evidence that Longview is doing well, and insight into why.  The unemployment rate is about 2.5 percentage points lower in Longview than in the rest of the country, with the percentage of persons employed in natural resources, construction and maintenance about double the national average.  Also, the percentage in production and transportation is almost 20% higher than for the US, while the percentage in finance, insurance and real estate is less than one-fifth the national average.   Because the local economy is doing well, the number of vacant housing units is about 10% below what it is for the nation as a whole and the percentage of owner-occupied units stands at 70.1% versus 65.4% for the entire country.  Lastly, the percentage of owners with a mortgage is just 49% versus 67.2% for all of the US.   

According to Tim Holland, General Manager of Home Plus Floors, Inc., “Longview missed the real estate bubble and thus is not suffering from a bust.  This is because construction here proceeded at a steady pace and supply kept up with demand.  As a result no one has lost money on their house and there was little if any increase in spec building back in ’05, ’06 and ‘07.“   As a result, house prices have held up well over the past few years.  Prices are up 5.9% since the trough in March 2011 and are just half-of-one-percent off their high set in November 2009.       

Improving economic conditions have resulted in payroll employment being down by just 400 or four-tenths-of-one percent from its peak in October 2008 and up by 7.9% since the trough in October 2009.  Single family permitting activity is up 3.2% on a seasonally adjusted monthly average basis from the trough set in April 2009.  While new homes are being built in many parts of the Longview MSA, activity has been primarily centered in the Springhill area and elsewhere north of Longview, and in several subdivisions that are in the Hallsville Independent School District. 


Improving Markets Index: Lincoln, NE MSA

February 24, 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 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.


Improving Markets Index: Cincinnati, OH-KY-IN MSA

February 16, 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 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 Cincinnati, Ohio-Kentucky-Indiana metropolitan statistical area (MSA).

The health of the Cincinnati housing market is due to its well diversified economic base.  Cincinnati possesses a large regional healthcare center, conducts an increasing amount of high-tech manufacturing, benefits from the presence of the University of Cincinnati and a large regional IRS office, and is headquarters to 10 Fortune 500 companies.  According to home builder Bob Schroder, Vice President of Arlinghaus Builders, LLC, “the combination of families relocating here for jobs, pent-up demand from buyers who were on the fence just a few months ago who are suddenly now buying because of a general sense of optimism and a rise in exports, are what is leading the increased traffic we are seeing.”  He went on to say that “lots of small hi-tech employers in robotics and manufacturing are 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 Cincinnati has experienced increasing education levels.  The number of people with a high school diploma or less fell from 226,016 to 178,862, a decline of more than 47,000.  By contrast, the number of individuals with a high school diploma increased by 11% from 410,581 to 455,199 and the number of people with some college jumped by 16% from 253,198 to 294,936.  Similarly, those individuals with an associate degree jumped by 28% from 78,221 to 99,835 and the number of individuals with a B.A rose by 25% from 207,222 to 259,686.  Finally, the number with professional degrees skyrocketed by 35%, from 112,247 to 151,167.  Note that the percentage increase in those with a particular degree increases the higher the degree obtained.     

According to Fred Cernetisch, General Manager of Pella Windows and Doors, “house prices are on the upswing because businesses have right-sized themselves.  As a result they are financially more secure, are making profits again and many are planning to add staff to take advantage of business opportunities that present themselves.  In addition there is an increasingly pervasive sense of cautious optimism.“   As a result, house prices have held up well over the past few years.  Prices are up 2.8% since the trough in February 2011 and are just 8.2% off where they were in December 2007.      

Improving economic conditions have resulted in payroll employment being down less than 6.0% from its where it was in December 2007 and up by 2.0% since the trough in December 2010.  Single family permitting activity is up 0.4% 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 Cincinnati MSA, activity has been primarily centered in the city of Cincinnati itself and in Boone, Campbell and Kenton counties to the south and Butler, Clermont and Warren counties to the north.


Improving Markets Index: Ann Arbor, MI MSA

January 26, 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 fifth release 76 markets are currently classified as improving under a conservative examination of local economic and housing market conditions.  Among these areas is Ann Arbor, Michigan metropolitan statistical area (MSA).

The health of the Ann Arbor housing market is due to its position as a very large regional healthcare and health-research center, high-tech manufacturing and research anchored by the University of Michigan and all its facilities, the automobile industry, its proximity to Detroit and its vibrant cultural scene. According to home builder Jim Haeussler, President of the Peters Building Company, “the rebound in the auto industry, the increased number of families relocating here for jobs, and the number of potential buyers who were on the fence just a few months ago who are suddenly deciding now is the time to buy a new home, are what is leading the increased traffic we are seeing.”  He went on to say that “lots of small hi-tech employers are hiring and there is a general feeling that we have turned the corner economically and as a result people are more optimistic.”     

Comparing educational data from the 2000 Census to the 2009 American Community Survey confirm these trends.  The number of people with a high school diploma or less actually decreased from 50,468 to 46,667.  By contrast, the number of individuals with some college increased slightly from 40,063 to 43,494 and the number of people with an associate degree jumped from 11,857 to 14,317.  Those individuals with a B.A rose from 48,034 to 49,685 while the number with professional degrees skyrocketed by 12%, from 46,992 to 52,747.   

According to John Fingerle, President of Fingerle Lumber Company, “house prices are rising, listing periods are down, inventory is very low and builders are again building spec homes.  In part it’s because unemployment is low, and that is because healthcare has been resilient and because of all the braniacs who are moving here to work for Google or Barracuda Networks or at one of the auto research centers.“   As a result, house prices have held up well over the past few years.  Prices are up 5.2% since the trough in December 2010 and are just 10% off where they were in December 2007.      

Improving economic conditions have resulted in payroll employment being down less than 3% from its level in December 2010 and up by 2.3% since the trough in July 2009.  Single family permitting activity is up 0.3% on a seasonally adjusted monthly average basis from the trough set in May 2009.  While new homes are being built in many parts of the Ann Arbor MSA, activity has been primarily centered in the City of Ann Arbor and the close-in suburbs of the Village of Dexter to the west, the City of Saline to the south and the City Plymouth to the east.


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