Economic And Housing Activity Seeing Upward Movement

Good news! The National Association of Home Builders/First American Leading Markets Index (LMI) reports that the housing market in 58 out of approximately 350 metropolitan regions across the country stayed at or exceeded the last normal level of activity. This means that on average the nation is at 87 percent of the normal housing and economic activity. This is great news for every facet of the housing market, from buyers to mortgage professionals to realtors to brokers to builders and more.

Housing Market Seeing Slow And Steady Progress

NAHB Chairman Rick Judson also works as a home builder in Charlotte. He says of the report, “U.S. housing markets are continuing to see a slow and steady progress back to the normal level. As the confidence of consumers gets stronger, this increases the number of buyers that are in the market.” As a builder, he understands and sees this firsthand in his own business.

The co-sponsor of the LMI report, First American Title Insurance Company, released this statement from vice chairman, Kurt Pfotenhauer. “We are pleased to see these continuing upward market trends, which are highlighted by the signs of improvement that were seen in eight-five percent of all metro areas over the last year.” As you can see, this is a trend that is spreading across the country, which is a sign that the market may be finally recovering.

What has been the impetus to this change? NAHB Chief Economist, David Crowe, attributes it to the firming housing prices that are being found in a number of markets. He went on to say that the healthiest housing markets in the country are actually in smaller cities that have a strong local economy. Among these are the gas and oil producing states of Wyoming, North Dakota, Louisiana, and Texas. This may be due to the steady job market that is offered in the community, as well as the income levels.

Small And Large Cities Seeing Growth In Activity

Both small and large metropolitan areas are seeing significant growth in the housing market activity. In the larger cities, at the top of the LMI list is Baton Rouge, LA, which has a score of 1.41-, which means that they had an increase of 41 percent over their last normal market level. Other metros that were listed include: Austin, Houston, Honolulu, and Oklahoma City. Two areas have exceeded their previous norms. They are Pittsburgh and Harrisburg, PA.

In the smaller metro areas, the top of the list is Bismarck, ND, Casper, WY, and Grand Forks, ND. Odessa and Midland, Texas have an LMI score of 2.0 or better, which means that the housing market is now at double the strength that it was before the recession.

This is good news for all segments of the housing market. Beginning to see upward movement is almost certainly a trend that will continue to grow in other metro areas, both small and large. Continuing to watch the LMI, as well as other reports, can enable us to stay on top of the market now and in the future.

U.S. Cities without Affordable Homes

The scene is getting tougher for home buyers with more complex home loan procedures and prices moving upwards.  

According to a recent study, for middle-income families, purchasing middle-priced homes is affordable in only 8 out of the country’s 25 biggest metropolitan areas.

Here are the top 5 cities where buying a home is not an affordable option anymore for most people:

Baltimore

This city has become 16% more unaffordable than the previous year. Buyers prefer Baltimore because of its proximity to Washington D.C. Last year there was a fall in the median sales price of homes in the metro area which led to a surge in demand and a spike in prices. Buyers were planning to stay put in homes long term and didn’t mind paying extra. In many cases, buyers were willing to up their offers if sellers received better offers.

Phoenix

The affordability of homes here has come down as compared to last year. The housing meltdown is warming up again. In Phoenix, many buyers are investors intending to rent out homes. This is bringing down inventories and increasing prices. Institutional investors such as private equity firms and hedge funds are causing prices to increase by purchasing many properties and refusing to resell them.

This trend has led to an increase in values of existing homes. Homeowners are waiting for their home values to go up further before deciding whether or not to sell their homes.

Los Angeles

Homes in L.A. are 17% less affordable as compared to last year. In the county area, the median sales price this year has been considerably higher than last year. This is because investors have been making a large number of purchases and many young adults have entered the region due to a growing tech industry. Bidding wars among buyers have almost become the norm. Some buyers are removing offer contingencies in an attempt to get past other offers.

Sacramento

Homes here are 19% less affordable against last year’s figures. Sacramento is witnessing rising prices due to a spillover effect. With prices in the bay area of San Francisco continually rising, many buyers are unable to afford real estate there. Instead, they’re looking east towards the Central Valley which is more affordable. There’s been a significant spike in luxury real estate prices during the third quarter in the Sacramento metro area as a result of increased demand and reduced inventory.

In the first part of this year, almost all homes in the market were sold within a week. In a healthy market, there’s usually about six months inventory for sale. Sacramento saw listings of just under a month which pushed prices upwards.

Detroit

Detroit has become 28% percent more unaffordable than last year. Though Detroit had a bankruptcy filing in July, real estate prices have picked up and are getting out of reach for many buyers. July saw a spike of 17% in home prices in the Detroit metro area as compared to this month a year ago.

Most of the price increase can be attributed to many car manufacturers getting back into business. This has helped in boosting consumer confidence and more buyers are entering the market. Many other large companies have also moved their offices out of the suburbs into downtown Detroit. This has boosted real estate demand and brought down supply.

Great Small American Cities to Live in

With homes in the metros of America becoming unaffordable for most people, it’s time to consider moving to the smaller cities. Here’s a list of the best small cities with a population of under 60,000 on the basis of demographic and other criteria.

Read on for details regarding the economy, housing scenario, and crime stats of each city.

1. Rowlett, Texas

This is a Dallas suburb. The median household income is 56% above the national average.

The crime rate is low at 42% below average and the residents sleep peacefully in homes costing 19% less than the U.S. average. You’ll find one home for every 164 persons in the city. Rowlett’s unemployment rate is 6.3% which is 12.5% below the average in the country.

2. Idaho Falls, Idaho

The city of Idaho Falls was called Eagle Rock till 1891. This city stands out with respect to the cost of living which is 12 points below average. This is above all the cities in the list. The crime rate is 5% lower than the average, and the median home price is 37% lower than the national average. There’s one marketable home for every 92 persons. The median household income is 13% below the nation’s average. The unemployment rate at 5.6% is 22% below the average in the country.

3. Cedar Park, Texas

Cedar Park near Austin has a lower crime rate than any of the small cities in my list - 51% below the nation’s average. The median home price is 30% above the U.S. average and the median household income is 34% above average. There’s one house up for sale for each group of 182 people, so it may be more difficult to find homes here than in other cities on the list. The employment rate is second-lowest at 28% below the average in the country.

4. Noblesville, IND.

Noblesville, near Indianapolis lies in the center of the nation’s Corn Belt. This small city has a crime rate 38% below average. This comes at a premium with the cost of living being 7 points above average. However, the median household income is also 27% above average. The median home price is 6% lower than the national average, and the market has one home per 84 people. As far as unemployment goes, it’s 11% below average at 6.4%.

5. Hendersonville, Tenn.

The Nashville, Tenn. suburb of Hendersonville has a median household income which is 18% above the national average. Cost of living is 8 points lower than the average. The crime scene is much lower, at 37% below the national average. Regarding housing, the median home price is 25% above average, and there’s one marketable home for every 101 people. Unemployment rate is 9.7% below average at 6.5%.

6. Mansfield, Texas

This is a Fort Worth suburb in Texas and is equidistant from Dallas. It’s possibly one of the most competitive real estate markets with one home up for sale for each group of 239 people. Prices of homes are 12% over the nation’s average. There’s a low crime rate at 43% below average and the cost of living is 3% above average. In Mansfield, the median household income is pretty good at 74% above average. There’s an impressive unemployment rate of 5.4% which is 25% below average. The median home price is 7% lower than the national average and on an average, for every 127 people, there’s one home up for sale.