Housing Markets Vary By Region

November 19, 2003
/ Print / Reprints /
/ Text Size+
WASHINGTON - Before getting into his regional outlook on housing at the National Association of Home Builder's (NAHB's) 2003 Fall Construction Forecast Conference, Mark Zandi, chief economist and co-founder of Economy.com, emphasized to the audience that "jobs are the key to sustainable economic growth."

We've had very large tax cuts and very aggressive mortgage borrowing, he said. We now need to see job growth to keep the economy moving ahead. "Businesses need to respond to their better profitability by creating jobs." If there is no job creation, he warned, there is no policy response.

He noted that there has been "an astounding housing market" despite the loss of jobs across the country. GDP growth would be substantially lower, he said, without housing's growth.

Zandi said that housing has been strongest in the Northeast corridor, south Florida, and in California. In the first half of 2004, areas that will rebound are those that depend on computer hardware, travel, and energy distribution. These include metropolitan areas in the South, and more cities in the East and Southeast. In the second half of 2004, he said, economic improvement will spread to those cities that depend on durable goods.

Long-term interest rates will rise next year, predicted Zandi, and it will probably be a sharp rise. "The housing market will start to weaken then," he stated.

There has been a growing gap between home building and jobs, he said. Usually they move together. We've been seeing increased demand for housing now, but that will weaken demand later as the economy improves and jobs come back, he commented.

As the broader economy is revitalized, Zandi said, weaker housing conditions will be seen in those areas that have been the strongest - the Northeast, south Florida, and California.

Stan Duobinis, a consultant with Crystal Ball Economics, further elaborated on the regional housing market. He noted that only 18 states have seen job growth during the past two years. Only four of those had growth above 1 percent.

The states that have seen the strongest employment growth are Alaska, Florida, Georgia, Nevada, and New Mexico. The Midwest has seen the greatest declines in employment, along with Alabama, Mississippi, Oregon, and South Carolina.

"Job growth makes an area attractive," said Duobinis. If net migration to that area is positive, it strengthens housing demand since it brings in new households. "Turnover by itself may cause a housing market to be active, even if the net change is small."

Duobinis showed that net migration has been greatest in the Southeast, Arizona, Nevada, Oregon, and Texas. Looking at migration per population, Midwest people don't move much, he said.

Much of the growth that has been seen to date in housing starts has been in single-family starts, he said. For 2003-2004, he expects no more than eight states to show positive growth in single-family starts. They are Alaska, California, Connecticut, Massachusetts, New Jersey, North Dakota, Rhode Island, and South Carolina. The largest positive gain will be 4.4 percent. "Many states will be lucky to break even," he remarked.

Multifamily starts will do better, with 10 states showing gains from 5.6 to 11.7 percent. They include Arkansas, Connecticut, Maine, Massachusetts, New Jersey, Oklahoma, Pennsylvania, Rhode Island, South Carolina, and Vermont.

Publication date: 11/24/2003

Did you enjoy this article? Click here to subscribe to The NEWS Magazine

Recent Articles by Greg Mazurkiewicz

You must login or register in order to post a comment.



Image Galleries

2014 World Energy Engineering Congress

Scenes from the 2014 World Energy Engineering Congress in Washington, D.C.


NEWSMakers: Jim Johnson

Jim Johnson,an experienced trade school and community college instructor, discusses the HVAC industry and his column in The NEWS, ‘The Service Ticket.’ Listen now for a hint to the Not Enough Heat question from the Dec. 15 issue. Posted Jan. 30.

More Podcasts


NEWS 01-26-15 cover

2015 January 26

Check out the weekly edition of The NEWS today!

Table Of Contents Subscribe

Regional Standards

With regional standards for a/c equipment going into effect in 2015, how do you think it will impact the industry?
View Results Poll Archive


2015 National Plumbing & HVAC Estimator

Every plumbing and HVAC estimator can use the cost estimates in this practical manual!

More Products

Clear Seas Research


Clear Seas ResearchWith access to over one million professionals and more than 60 industry-specific publications, Clear Seas Research offers relevant insights from those who know your industry best. Let us customize a market research solution that exceeds your marketing goals.


Magazine image
Register today for complete access to ACHRNews.com. Get full access to the latest features, Extra Edition, and more.


facebook icontwitter iconyoutube iconLinkedIn i con