|
Phoenix has now surpassed Atlanta as the largest single-family housing market in the country, with 58,865 single-family permits issued in the 12 months ending in March. Eighteen of the largest 20 Giants have operations in Phoenix, with D.R. Horton and Pulte each reportedly selling more than 5,000 homes per year in the metropolitan area.
Phoenix's economy is very strong. More than 66,000 jobs have been created in the last 12 months, and unemployment stands at 4.2 percent. People are flocking to Phoenix from all over the country. One of our favorite Web sites for tracking migration is UHaul.com, where the migration flow is readily apparent in its truck pricing. The cost to rent a U-Haul truck from Los Angeles to Phoenix is more than 7 times the cost of a return trip, and the cost to rent a truck from Chicago to Phoenix is more than 3 times the cost of a return trip (see sidebar).
Despite the significant growth in primary and active adult new home communities, builders have not been able to keep up with demand. The median resale home price in Phoenix has risen more than $53,000 in the last 3 years, to a new record high of $208,000.
Featured Up-and-Coming Market: TucsonTucson, which is located two hours south of Phoenix, has been growing just as fast. Single-family permits now exceed 10,000 per year in Tucson, and prices have risen $55,000 over the last three years, to a median resale price of $195,277. Job growth is also strong, with 13,300 jobs created in the 12 months ending in March. Tucson builders are expanding south, east and north into areas that have seen very little housing in the past.
While we were completing an analysis in Tucson recently, the locals seemed very concerned that a housing bubble was emerging. In addition to the incredible price appreciation that had occurred, their "warning signal" was that California developers were now moving into the area. Are they paranoid, or are their gut instincts correct? Only time will tell.
jburns@realestateconsulting.com
| 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 | 66,300 | 3.99% | 4.2% | $208,000 | 34.6% | 5.6 | 58,865 | 19.2% | 65,934 | 100% |
| 2 | Atlanta | B | 17,900 | 0.80% | 4.9% | $158,174 | 24.1% | 4.9 | 57,744 | 1.6% | 73,869 | 99% |
| 3 | Houston | B+ | 26,300 | 1.15% | 5.5% | $135,200 | 24.7% | 2.9 | 46,034 | 4.8% | 57,926 | 88% |
| 4 | Riverside-SB | C | 27,900 | 2.45% | 5.0% | $320,000 | 55.8% | 6.4 | 42,802 | 16.2% | 51,127 | 89% |
| 5 | Las Vegas | A+ | 59,800 | 7.56% | 3.9% | $280,000 | 49.2% | 5.4 | 29,864 | 0.9% | 34,107 | 83% |
| 6 | Dallas | B+ | 33,300 | 1.76% | 5.5% | $151,800 | 26.1% | 2.4 | 29,849 | 4.4% | 36,470 | 49% |
| 7 | Orlando | A | 45,800 | 4.76% | 4.0% | $185,950 | 33.9% | 5.4 | 27,863 | 17.4% | 34,119 | 96% |
| 8 | Chicago | C | 28,900 | 0.78% | 6.1% | $210,000 | 34.3% | 4.5 | 27,144 | -3.7% | 37,994 | 89% |
| 9 | Tampa | A | 32,900 | 2.59% | 4.1% | $159,000 | 31.6% | 5.5 | 24,135 | 16.4% | 31,262 | 82% |
| 10 | Washington D.C. | A+ | 66,000 | 2.91% | 3.6% | $350,000 | 39.8% | 5.6 | 22,904 | -4.0% | 30,778 | 81% |
| 11 | Minneapolis | B | 27,200 | 1.60% | 4.5% | $225,000 | 31.6% | 6.1 | 19,739 | -2.1% | 26,740 | 95% |
| 12 | Charlotte | A | 25,400 | 3.33% | 5.1% | $150,000 | 26.3% | 1.3 | 17,860 | 8.6% | 21,230 | 93% |
| 13 | Fort Myers | C+ | 9,300 | 4.57% | 3.4% | $210,426 | 38.9% | 7.4 | 17,798 | 65.8% | 23,415 | 98% |
| 14 | Sacramento | C | 11,400 | 1.34% | 4.9% | $350,000 | 55.0% | 6.2 | 17,380 | -5.6% | 21,010 | 88% |
| 15 | Denver | A | 24,900 | 2.17% | 5.7% | $235,000 | 35.3% | 5.6 | 16,831 | 14.9% | 21,434 | 74% |
| 16 | Fort Worth | B+ | 11,700 | 1.49% | 5.2% | $106,600 | 19.4% | 2.5 | 15,595 | 10.8% | 18,814 | 49% |
| 17 | Jacksonville | B | 15,100 | 2.62% | 4.2% | $152,000 | 26.7% | 5.2 | 15,343 | 15.4% | 21,093 | 97% |
| 18 | Austin | B | 17,500 | 2.65% | 4.6% | $154,800 | 28.0% | 4.0 | 14,775 | 8.8% | 18,254 | 69% |
| 19 | St. Louis | C | 12,900 | 0.98% | 6.0% | $142,500 | 25.6% | 5.0 | 13,225 | 1.2% | 15,152 | 83% |
| 20 | Nashville | B+ | 13,800 | 1.96% | 4.9% | $122,050 | 22.2% | 0.8 | 13,186 | 6.5% | 16,377 | 89% |
| Sources: Bureau of Labor Statistics: Census Bureau through the month ending March 2005; John Burns Real Estate Consulting | ||||||||||||
|
Advertisement
Related Stories
Hamlet Homes' Mike Brodsky on Finding Successors and Letting Go
A transition that involved a national executive search, an employee buyout, and Builder 20 group mentorship to save the deal
Time-Machine Lessons
We ask custom builders: If you could redo your first house or revisit the first years of running your business, what would you do differently?
Back Story: Green Gables Opens Up Every Aspect of its Design/Build Process to Clients
"You never want to get to the next phase and realize somebody's not happy."
