Unrestricted Versus Restricted Growth

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: Atlanta With 25,600 jobs added in the last year, Atlanta is

May 31, 2005

This article first appeared in the Unrestricted Versus Restricted Growth issue of Pro Builder.

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: Atlanta

With 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.

Top 20 Metro Areas

			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