Residential Markets Continue Improving
Posted by Peter Vekselman Monday, 23 July 2012 05:20 No Comments
As measured by the National Association of Home Builders Improving Markets Index (IMI), the residential markets in 35 states are experiencing sustained improvements. It’s not easy making this list. A state only qualifies as sustaining improvement when it shows six months of improvement in construction permit growth, lower unemployment, and increasing home prices.
The Bureau of Labor Statistics provides employment data. Home appreciation data comes from Freddie Mac and new permit data from the U.S. Census Bureau.
As you would expect in this less than stellar economy, the improvements have not been steady or reliable. Each month new states make it onto the list while others fail to maintain a full six months of improvement and drop off the list. However, the good news is there are a significant number of states with five months of improvements. And that is the same number of months the IMI has increased the number of states on the improvement list. Still, with the list at 35 states, it is now expected to plateau for the next several months. Especially now that the spring buying season is behind us.
In addition to the 35 states, at least 80 individual metropolitan areas show sustained growth in the numbers over the past six months. Obviously, I can’t provide the entire list here but the top five improving markets are:
1. Cumberland, MD – WV
2. Fairbanks, AK
3. Wheeling, WV – OH
4. Kokomo, ID
5. Indianapolis, ID
Also worth noting are:
1. Phoenix, AZ
2. Boulder, CO
3. Tampa, FL
4. Detroit, MI
5. Knoxville, TN
The June numbers saw 13 new metro areas added to the list while 48 failed to continue improving. What this data is telling us is that while the residential real estate market continues to improve it certainly is not steady or dependable. It’s lurching and sputtering. This is especially true for those near the bottom of the list. Any small set back in employment, permits, or house values drop it off the list. While this is useful for tracking improvements, it has limited value long term because those at the top will begin falling off the list as they become fully stable and can no longer post improvements to the numbers.
All the Best,
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