In this issue, we feature one of the hottest and fastest-growing housing markets in the country as well as one whose growth has been restricted by local planning agencies.
Featured Major Market: AtlantaWith 25,600 jobs added in the last year, Atlanta is quickly recovering from the downturn that occurred in 2002 and 2003. Atlanta's large economy is the "back office" headquarters of the eastern United States, where major corporations put their lower-cost operations. Atlanta is also the ideal location for large corporations with a need for a large number of employees and easy access to the rest of the East Coast. Major Atlanta corporations include UPS, Delta Airlines, Coca-Cola, Home Depot and BellSouth.
For years, strong employment growth, warm weather and plenty of developable land kept Atlanta at the top of the housing market nationally. Including multifamily permits, Atlanta is still the largest construction market in the country. However, in 2004, Phoenix surpassed Atlanta as the largest single-family housing market in the country. Phoenix is the "back office" of the West. At 56,031 single-family permits, Atlanta accounted for 3.5 percent of all single-family construction in the country in 2004.
Featured Up-and-Coming Market: Portland, Ore.Despite the strong national housing market, builders in Portland haven't been able to grow the number of single-family homes constructed.
Additionally, Portland area builders have been forced to learn how to build higher density homes. In fact, in the Portland area, cities prefer more homes to the acre rather than less. According to local expert John Kennedy of Pacific Real Estate Investments LLC, builders considering expansion to Portland should anticipate two years to achieve land entitlements and zoning approvals for relatively small lots (2500 to 4000 square feet) and zero-lot-line site plans.
Employment | Affordability | Permits | ||||||||||
Short-Term Outlook/Grade | 1-Year Payroll Employment Growth | 1-Year Growth Rate | Unemployment Rate | Median Resale Home Price | Resale Housing Costs as % of Income | Housing Cycle Barometer | 12-Month Single-Family Permits | 1-Year Single-Family Growth | 12-Month Total Permits | Total Permits as % of Peak Permits | ||
1 | Phoenix | A | 72,500 | 4.5% | 4.0% | $196,000 | 32% | 5.2 | 58,135 | 22.1% | 65,403 | 100% |
2 | Atlanta | B | 25,600 | 1.2% | 4.9% | $162,747 | 24% | 4.9 | 55,997 | 4.3% | 72,552 | 100% |
3 | Riverside-SB | C | 36,700 | 3.3% | 5.5% | $312,000 | 53% | 6.1 | 42,372 | 19.8% | 50,803 | 78% |
4 | Houston | B | 21,500 | 1.0% | 6.1% | $136,100 | 24% | 2.5 | 39,510 | 7.7% | 49,707 | 95% |
5 | Las Vegas | A | 57,100 | 7.3% | 4.2% | $278,000 | 50% | 5.2 | 34,561 | 10.0% | 39,465 | 88% |
6 | Chicago | B | 19,400 | 0.5% | 5.9% | $213,000 | 34% | 4.3 | 31,606 | 0.3% | 42,746 | 91% |
7 | Dallas | A | 42,600 | 2.3% | 6.1% | $146,800 | 25% | 1.0 | 30,227 | 7.5% | 36,920 | 50% |
8 | Washington D.C. | A+ | 67,200 | 3.0% | 3.8% | $329,900 | 38% | 5.3 | 30,032 | (2.1%) | 39,555 | 83% |
9 | Orlando | A | 44,100 | 4.7% | 4.3% | $179,900 | 32% | 5.1 | 27,719 | 20.2% | 34,321 | 98% |
10 | Tampa | A | 37,000 | 3.0% | 4.4% | $151,550 | 30% | 5.1 | 23,822 | 16.7% | 30,971 | 82% |
11 | Minneapolis | A | 30,200 | 1.8% | 4.6% | $219,000 | 30% | 5.8 | 19,887 | (0.8%) | 27,101 | 96% |
12 | Charlotte | A | 26,600 | 3.5% | 5.4% | $150,000 | 27% | 0.8 | 19,217 | 11.9% | 23,035 | 94% |
13 | Fort Myers | B+ | 11,400 | 5.8% | 3.6% | $101,868 | 18% | 1.2 | 16,546 | 59.9% | 21,899 | 100% |
14 | Detroit | F | (5,300) | (0.6%) | 9.0% | $205,750 | 35% | 5.8 | 16,422 | 4.9% | 20,837 | 91% |
15 | Raleigh | B+ | 8,800 | 2.0% | 4.3% | $165,000 | 28% | 0.3 | 16,161 | 11.7% | 18,786 | 87% |
16 | Sacramento | B | 14,100 | 1.7% | 5.4% | $343,000 | 52% | 5.9 | 16,161 | (4.9%) | 19,221 | 86% |
17 | Denver | A | 28,300 | 2.5% | 5.5% | $225,000 | 33% | 5.1 | 15,577 | 20.3% | 20,161 | 72% |
18 | Fort Worth | B+ | 15,800 | 2.0% | 6.0% | $98,200 | 17% | 0.0 | 15,427 | 11.3% | 19,044 | 49% |
19 | Jacksonville | B | 16,300 | 2.9% | 4.5% | $150,000 | 26% | 5.0 | 15,005 | 17.8% | 19,602 | 100% |
20 | Austin | A | 19,100 | 2.9% | 5.1% | $157,100 | 28% | 3.9 | 14,467 | 10.6% | 17,821 | 67% |
Sources: Bureau of Labor Statistics; Census Bureau through the month ending February 2005; John Burns Real Estate Consulting |
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