Now that the housing recovery is nearly upon us–most economists expect a full-fledged recovery to begin this year–it’s time to figure out which markets will be the front-runners. Based on last year’s performance, especially the level of building permits pulled in the fourth quarter, it’s already clear that some markets are poised to grow at a faster pace this year than others in 2010.

Green shoots may be sprouting in markets throughout the country, but which markets will flower first? That’s the question we attempt to answer with the Builder Market Health Index, compiled by Hanley Wood Market Intelligence, our market research arm. Market Intelligence (MI) first input 2009 data and 2010 projections for household formations, resale values, and job and income growth. Then, after sprinkling in some secret sauce to weight these drivers, it ranked by health the top 100 housing markets (determined by permits pulled in 2009).

Not surprisingly, many of the markets that topped our 2009 list are on the 2010 leader board, including most of the major markets in Texas, where low development costs kept a lid on house prices during the boom, and strong local economies provided a cushion from the blow of a national recession.

But Lone Star markets were eclipsed this time around by some relatively hot markets in the Carolinas, which accounted for seven of the top 20 spots. Many of the major cities along the Mid-Atlantic seaboard continue to benefit from a strong influx of people drawn by a comfortable way of life, affordable housing, and growing employment prospects.

As with last year, markets that hit the trifecta–having within their borders a state capital and a big university along with a diversified economy–dominate our list of hottest markets. A strong base of government employment, whether it be from the state or the military, has helped stabilize some markets through the housing recession. In many cases, the government is the biggest employer among the 20 markets on our list.

We present this data with one big caveat. These markets may be healthier than others, but they aren’t healthy in the way they were during the housing boom, when it was common to find rising population, employment, and income. Virtually every housing market still has at least one blemish. And for that reason only two received a rating of 50 or more, indicating they are truly healthy. That’s an improvement, though; only one scored 50 or higher last year.

Hanley Wood Market Intelligence, which took into consideration forecasts from Moody’s Economy.com and other sources, is looking for several of these healthiest markets to break out this year. A few of them witnessed dramatic increases in building permits pulled in the fourth quarter of last year, momentum that is expected to carry over into 2010. Several of the markets on this list are poised for double-digit growth. Read on.

3. Charlotte-Gastonia-Concord, NC-SC

Market Health Indicator: 48.0

2009 Total Building Permits: 7,607

2010 Building Permit Forecast: 7,442

Home to 1.77 million people, Charlotte has been one of the strongest housing markets in the country during the last three years. Housing prices in this banking center (Wachovia and Bank of America have big presences here) were pretty stable last year, barely inching down. Income levels actually rose in 2009. And households continued to form at a relatively high rate, compared to the rest of the country. The job picture should brighten in 2010; the area is projected to add 2% more jobs. Single-family permit activity began rising in the fourth quarter–it was up 20% over the year-ago period–despite a glut of downtown condos that have been converted to rentals.

By:Boyce Thompson

http://www.builderonline.com/local-markets/the-20-healthiest-housing-markets-for-2010.aspx?cid=BLDR100225002&page=1

www.dvwise.com

August 21, 2009 – Builder confidence for conditions in the market for 55+ housing rose slightly during the second quarter, according to the 55+ Single-family Housing Market Index released today by the National Association of Home Builders (NAHB). The 55+ HMI notched up one point in the second quarter to a level of 15, due to a gain in the current single-family sales component of the index, which rose three points to 15.

The current condo index dropped a point to an index value of 12, while the rental index remained at 27. The future-expectations components of all three 55+ indicators – single-family for sale, condos and multifamily for-rent – fell during the second quarter. All sectors expressed some uncertainty over the next half-year as single-family builders’ expectations for the next six months fell from 26 to 23, the condo builders’ expectations index fell from 20 to 17, and the rental producers’ index of expectations fell from 35 to 32. As a further indicator of softness in the market, the level of traffic by prospective single-family buyers fell by two points over the previous quarter, from 14 to 12; condo traffic fell from 15 to 10.

“The survey shows that builders are still cautious,” said David Crowe, NAHB chief economist. “They may be seeing a few green shoots as some sales pick up, but builders understand that the consumer remains uncertain and awaits clearer signs of a housing and economic recovery.”

Both the single-family and multifamily 55+ HMIs are diffusion indexes, derived from quarterly surveys of builders and developers in which they rank their perceptions of the current conditions and expectations for the new future as “good,” “fair,” or “poor.”  The responses are used to create a scale of 0 to 100, with a rating of 50 generally indicating that the number of positive responses is about the same as the number of negative responses.

As the market continues to absorb the existing homes being sold by seniors, builders who specialize in this sector expect to see pent-up demand for the user-friendly homes that these buyers and renters want.

“Most 55+ home buyers are current owners with considerable equity in their homes, but they are waiting to sell their home before committing to another purchase.  Historically low interest rates and good bargains in the new-and existing home markets will eventually bring these folks back into the market,” says Crowe. “Buying power has been scaled back by the financial crisis, but the demand for age-friendly housing is still there, and will be a big factor in housing for at least the next decade.”

Source: www.nahb.org

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