It’s time to take a second look at the healthiest housing markets for this year and next.
What can you say about the fickle economic forces that drive the home building industry? Markets that were among the healthiest six months ago have lost favor, due to weakness in the oil and gas sector of the economy. They’ve been replaced in some cases by unexpected markets that have worked through job losses and foreclosures to reach a much brighter place.
Twice annually, Builder works with Hanley Wood Market Intelligence to compile a list of the healthiest housing markets in the United States, based on forward projections for the metrics that drive housing production–jobs, price appreciation, population growth, and income growth. The projections come from Moody’s Economy.com.
Earlier this year, markets in Texas and the Carolinas dominated the list looking at 2011 market-level forecasts, thanks to growth in the oil economy in the case of Texas, and strong population growth in the case of the Carolinas. Both regions also had on their side a recovery in home prices as they worked through foreclosure issues.
Economic conditions in the oil patch aren’t quite as favorable today. And some bloom has come off the rose in the Carolinas, where home prices in some markets have double-dipped. As a result, our forward-looking view of the 20 healthiest markets is a little different today.
A lot has happened in the housing market since we last compiled this list in February. We had a double-dip in home prices. Only a small improvement in employment occurred on a national basis. And the long-vaunted housing recovery, which most housing economists pegged for late this year, hasn’t materialized.
Rising home prices, job gains, and improvement in median incomes will drive the healthiest markets over the next year and a half. Moody’s projects that permit activity may double in some of the very hottest of these markets, as the long-awaited housing recovery takes hold.
Markets that benefit from military spending, or major universities, once again crowd the top of our list. Some markets hit the trifecta with military bases, big universities, and strong private sector employment. But several of the state capitals that appeared on previous versions of the list have dropped to the bottom due to fiscal problems that resulted in layoffs.
Here, without further ado, are the 20 healthiest housing markets based on forecasts through 2012. Though permits weren’t used to produce the market health calculations, we’ve included forecasts for total housing permits in 2011 and 2012 to give you a sense of how big the market is and how much it’s expected to grow over the next 18 months.Credit: Flickr user david_shankbone
20: Greeley, Colo.
Health Index: 72
2010 Population Forecast: 252,825
2011 Total Building Permit Forecast: 1,532
2012 Total Building Permit Forecast: 2,510
The forces lifting the housing market along Colorado‘s Front Range are spilling into Greeley, located about an hour’s drive northwest of Denver. Home prices here never got out of control during the housing boom and reset early in the housing recession. Also, the region dealt early and effectively with its foreclosure situation.
Now, positive economic forces are taking hold along Colorado’s Front Range. In fact, all the main drivers of new home construction, home prices, jobs, population, and incomes, are expected to turn solidly positive in Greeley next year.
Home to Northern Colorado University and the North Colorado Medical Center, Greeley is projected to have some of the strongest population growth (1.8%) in the country. With a median home price of about $140,000 this summer, Greeley is an affordable alternative to Denver. A strengthening local economy will lift the median income here by 4.2%.
Visit our Local Markets page for Greeley to see more data and analysis.Credit: Courtesy ZK Homes (More …)