Jonathan Smoke, the Chief Economist and Forecaster for Hanley Wood, ranks the 2014 market outlook for the top 100 metro housing markets. The ratings reflect the overall economic health of each market, combined with the expected growth in new homes sales forecasted for 2014. The Villages (Florida) ranks at the top, with a rating of 95.0, while Detroit sits alone, ranked at 32.8, nearly 10 points below 99th ranked Baton Rouge (42.5).
There is a theme amongst the top metro areas, and it’s pretty simple to determine. Of the top 20 metros with the highest ratings, 17 are in in the top 20 warmest states in America. Florida, Arizona, Hawaii, Texas and the Carolinas all fall into this region, with California, Georgia, Alabama, Delaware, and DC also following the warm weather trend. The only outliers include Salt Lake City (boasting a 1.5% growth rate from 2010-2012), Denver (a 5.7% rate), and Colorado Springs (a 3.7% rate).
The theme for the lowest rated metro areas is not quite as clear. There are actually a combination of trends. A major issue is the cannibalization of neighboring markets. From 2000-2010, Texas grew at the 5th fastest rate in the country and added the most (4.2 million) people, easily surpassing 2nd ranked California’s 3.3 million people. With so many people migrating to Texas, surrounding areas such as Fayetteville (ranked 94th), Tulsa (95th), Albuquerque (ranked 96th) and Baton Rouge (99th) all saw significant drops in their housing markets. Greensboro, NC (97th) is losing residents to growing markets in Raleigh and Wilmington. Lakeland, Florida (93rd) is seeing the same migration towards the Gulf Coast in Tampa.
Cincinnati (91st) and Detroit (100th) have been in decline for the past few years, while cold weather in Grand Rapids, Michigan (98th) does not help for forecasts. Nashville (91st) seems to be a bit of an anomaly at first, showing an excellent population growth of 3.5%, but that is more than double Tennessee’s growth of 1.7%. Eventually, the local number will have to shrink, and Jonathan Smoke believes the housing market will feel it in 2014.
Need some ideas on planning for the 2014 year? SBS Group has a variety of industry experts in both the Homebuilding and Construction fields. Take a look at our Strategic Planning webinar to plan for 2014.