Earlier this month, Builder magazine released the results of their survey of the Healthiest Housing Markets in the country. Guess who came in number 1!  Austin is first followed by San Antonio. The survey highlighted our continual population growth noting that: “The city had the third highest household growth rate in percentage terms among the top 100 market.” In fact out of the top 100 markets, Austin is the ONLY market to score high enough to barely be considered “Healthy.”

The following list is in ascending order so I moved Austin and San Antonio to the top of the list for easy reference.

http://www.builderonline.com/local-markets/healthiest-housing-markets-2009-fall-update.aspx

#1 Austin

Market Health Indicator: 50.3

Even though it took a step backward during the last six months, Austin happens to be the only market on our list that is genuinely close to healthy. Home prices, which rose in 2008, finally declined this year—they are down 4.6% through September—as this Texas metro ended a long run of employment growth and lost some jobs. But its population has expanded by 4.3% during the first half of 2009, which should add housing demand and help firm up home pricing. It was the same story with Austin-area employment numbers, which remained in positive territory until mid-2009, when its manufacturing segment began losing jobs. Still, unemployment in this progressive city runs only about 7%, significantly below the national average. Dell Computer is Austin’s largest employer, with about 17,000 jobs. Austin continues to draw population, especially retirees, with its low cost of living, inexpensive housing, and warm-weather climate. The city had the third highest household growth rate in percentage terms among the top 100 market. Even so, permit activity fell by 38% during the first half of the year.

#2 San Antonio, Texas

Market Health Indicator: 41.2

The recession arrived in San Antonio earlier this year, when employment finally turned negative due to weakness in the manufacturing sector. But with military bases as three of its top four employers, this Texas city may see better employment numbers next year, potentially fueling housing growth. Housing here remains affordable at a median of $148,000, with prices declining a mere 1.6% during 2009. In addition, San Antonio routinely ranks among the best cities for relocation, and has been gaining population at a rate of 2.8% annually, a trend that continued even this year. Despite favorable trends, though, San Antonio housing permits have fallen 54% so far this year, and comparisons may wind up even lower before the year is over. A full 72% of the action is in single-family rather than multifamily permits.

Busiest builders: D.R. Horton, Centex Homes, KB Home, Fieldstone Communities, Pulte Homes.

·                                 From: BUILDER 2009

·                                 Posted on: October 6, 2009 3:02:00 PM

Healthiest Housing Markets 2009: Fall Update

The new and improved BUILDER Market Health Index, compiled by Hanley Wood Market Intelligence, now accounts for a market's median income growth.

By: Boyce Thompson

Much has changed since February, when we published our first list of the healthiest housing markets for 2009.

The federal government’s $8,000 tax credit for first-time home buyers spurred sales around the country. Companies with cash are buying land again. A handful of builders have begun emerging from Chapter 11 bankruptcy.

But the housing downturn surely is not over yet, despite economists’ assertions that statistics will show that the recession ended in June. Home values have fallen dramatically this year, and some believe prices still haven’t hit bottom. In terms of employment (a key factor for home sales), all but three of the top 100 housing markets have lost jobs since we published our February story.

Given these factors, we decided to revisit our list and see how individual markets have fared this year—and where builders need to be in the months to come.

We took advantage of this occasion to improve the metric by which we rank the markets by adding more data to the calculations. Now we’re ranking markets not just by what’s happened with home price appreciation (or depreciation), job growth, household growth, and unemployment. We’re also considering median income growth as well.

“These are the economic factors that are most correlated to strong home sales,” says Jonathan Smoke, director of research for Hanley Wood Market Intelligence, which compiled the rankings for BUILDER Online. “In the best of times, earlier this decade, many markets had high marks on all these factors, making them the perfect markets for home sales.”

Today, as Smoke points out, the reverse is true. In nearly every market, most of the key home building drivers have turned negative. As a result, virtually no market today is truly healthy, though some are faring better than others. For that reason, the recovery, when it comes in earnest, is likely to be more pronounced in the markets that head our list.

Each market on the list received a Market Health Indicator score, with a score of 50 or more considered healthy. Only one market on this list surpassed 50.

To give more builders across the country a sense of where an individual market stands nationally, we’ve expanded the list to include the 100 largest home building markets, ranked by permit volume. Interestingly, many smaller markets showed up on our list of the healthiest, in part because they didn’t have big run-ups in housing appreciation during the boom. Many of them also benefit from more diversified economies than other formerly booming metros.

We’ve also improved the BUILDER Market Health Index to make it timelier and more consistent. We’ve included forecasts, where appropriate, so that all the data, with the exception of building permits, is good through August.

Again, our list should help identify the markets that are likely to recover first from the downturn. Some are already on their way up. In Washington, D.C., for instance, new home sales were up 17% through June, and builders there have been able to pass through some price increases.

If you would like a broader and more detailed ranking of the top 200 markets, you can click on this link to purchase the BUILDER Market Health Report from Hanley Wood Market Intelligence.

Here, in ascending order, are the 20 healthiest housing markets in the country.