by Michael Dey | Nov 17, 2016 | Uncategorized
Markets in 146 of the approximately 340 metro areas nationwide returned to or exceeded their last normal levels of a combination of economic and housing activity in the second quarter of 2016, according to the National Association of Home Builders’ Leading Markets Index (LMI). This represents a year-over-year net gain of 66 markets.
Greater Greenville Reaches Normal
The Greater Greenville area reached normal levels of economic and construction activity for the first time since March 2008. Greater Greenville fell as low as 77 percent of normal in 2011, and has been slowly improving since then. Greenville now stands at 101 percent.
During the second quarter of 2016, permits in Greater Greenville rose to 74 percent of normal. Housing prices continued to rise and now stands at 133 percent of normal. Jobs are at 97 percent of normal.
“The data bears out the condition in our area that a lack of inventory, created by a lack of production for a sustained period of time, is creating a housing affordability problem,” Michael Dey Chief Executive Officer of the Home Builders Association of Greenville, said.
Spartanburg is Normal and Accelerating
Spartanburg reached normal a month before Greenville, and its growth continues to accelerate. At the end of the second quarter, Spartanburg was at 111 percent of normal, but permits have risen to 121 percent. Housing prices in Spartanburg are at a more healthy 116 percent.
“The difference between Greenville and Spartanburg is emblematic of the anti-growth problem in Greenville County,” Dey said. “Housing prices prove demand exists, and resistance to development in Greenville County is pushing development to Spartanburg County,” he said. “That type of growth pattern is exactly how Sprawl in Atlanta happened.”
The Rest of South Carolina
Charleston (117 percent) and Myrtle Beach (110 percent) also have returned to normal. Columbia is nearing normal at 98 percent.
The National Picture
Nationally, all three components of the LMI contributed to the quarter-over-quarter growth in the nationwide score. Permits rose from .46 to .47, prices increased from 1.35 to 1.37, and employment rose from .96 to .97. Over the year, the permits, prices, and employment components expanded by .04, .07, and .02 respectively. Regionally, 79 of the 364 markets, 21 percent, have an LMI Score that is greater than or equal to 1.0 and are considered normal, up from 74 in the second quarter of 2015 and 62 last year.
While most markets do not have an overall LMI score that is greater than or equal to 1.0, a recovery in one or more components has taken place across a number of MSAs. For example, in 26 markets single-family permits have returned to normal. This is unchanged from the second quarter, but 5 more than last year’s total. The number of markets where house prices are considered normal was also unchanged over the quarter at 345, but it is 6 greater than the 339 markets from one year ago. Meanwhile, the number of MSAs where employment has reached or exceeded normal reached 72, up from 64 markets in the second quarter and from 40 markets one year ago.
Of the 364 MSAs included in the LMI, 56 percent saw their score increase over the quarter and 69 percent recorded year-over-year growth. According to the map above, the MSAs with the largest year-over-year increase, those markets where the annual increase in its LMI Score exceeded that of the nation as a whole, were largely located in the West and in the South, and many reside in the former “bubble” states of California, Nevada, Arizona, and Florida. As illustrated by the first map, many of the markets in these states now have an LMI score closer to the middle of the Score distribution, and off the bottom, indicating that the effects of the crisis in these MSAs are disappearing and the recovery in these markets is taking hold.
To read more about the LMI, visit NAHB.org/LMI.
by Michael Dey | Nov 12, 2015 | Uncategorized
The economic and housing recovery continues at a slow, but steady pace. For the country as a whole, the Leading Markets Index (LMI) rose to .93 in the third quarter of 2015, .01 point higher than its level in 2015, and .04 point higher than its level from one year ago. The index uses single-family housing permits, employment and home prices to measure proximity to a normal economic and housing market. The index is calculated for both the entire country and for 364 local markets, metropolitan statistical areas (MSAs). A value of 1.0 means the market (or country) is back to the last level of normality.
Greater Greenville
The Greenville area also continues to improve. In the third quarter the index rose .02 to .94. Permits continue to lag at .61, but housing prices are at 1.25 and jobs are at .95. Spartanburg also is at .95, but permits have risen to a much more healthy .78. Charleston is the only marketing in South Carolina that has returned to normal at 1.07 with permits at .80.
Nationally, all three components of the LMI contributed to the quarter-over-quarter growth in the nationwide score. Permits rose from .46 to .47, prices increased from 1.35 to 1.37, and employment rose from .96 to .97. Over the year, the permits, prices, and employment components expanded by .04, .07, and .02 respectively. Regionally, 79 of the 364 markets, 21%, have an LMI Score that is greater than or equal to 1.0 and are considered normal, up from 74 in the second quarter of 2015 and 62 last year.
While most markets do not have an Overall LMI Score that is greater than or equal to 1.0, a recovery in one or more components has taken place across a number of MSAs. For example, in 26 markets single-family permits have returned to normal. This is unchanged from the second quarter, but 5 more than last year’s total. The number of markets where house prices are considered normal was also unchanged over the quarter at 345, but it is 6 greater than the 339 markets from one year ago. Meanwhile, the number of MSAs where employment has reached or exceeded normal reached 72, up from 64 markets in the second quarter and from 40 markets one year ago.
Of the 364 MSAs included in the LMI, 56% saw their score increase over the quarter and 69% recorded year-over-year growth. According to the map above, the MSAs with the largest year-over-year increase, those markets where the annual increase in its LMI Score exceeded that of the nation as a whole, were largely located in the West and in the South, and many reside in the former “bubble” states of California, Nevada, Arizona, and Florida. As illustrated by the first map, many of the markets in these states now have an LMI score closer to the middle of the Score distribution, and off the bottom, indicating that the effects of the crisis in these MSAs are disappearing and the recovery in these markets is taking hold.
by Michael Dey | May 6, 2015 | Uncategorized
The National Assocaition of Home Builders released its Leading Markets Index this week, and the Greater Greenville market remains at 92 percent of normal. LMI measures, and averages, three basic criteria: Permits, Housing Prices, and Employment. Continuing to hold back our market is building permits, largely a function of the absence of younger home buyers.
According to the LMI for the first quarter of 2015, Greater Greenville breaks down as follows:
- Building Permits: 60 percent
- Housing Prices: 122 percent
- Employment: 95 percent
- Overall: 92 percent
The Greater Greenville area is ranked 126 overall out of 351 markets nationwide, down from 122 at the end of the fourth quarter. The top market is Midland Texas at 232 percent of normal. The bottom market is Flint Michigan at 63 percent of normal.
The Greater Greenville area is defined as Greenville, Pickens, Laurens, and Anderson counties.
Other South Carolina markets are as follows:
- Spartanburg, 88 percent
- Columbia, 88 percent
- Charleston, 103 percent
- Myrtle Beach, 98 percent
- Charlotte, 87 percent
- Augusta, 99 percent
- Florence, 89 percent
- Sumter, 96 percent
- Raleigh, 89 percent
To read the full report, click here.
by Michael Dey | Feb 5, 2015 | Uncategorized
The National Assocaition of Home Builders released its Leading Markets Index this week, and the Greater Greenville market is now at 92 percent of normal. LMI measures, and averages, three basic criteria: Permits, Housing Prices, and Employment.
According to the LMI for the fourth quarter of 2014, Greater Greenville breaks down as follows:
- Building Permits: 60 percent (the highest since 2008)
- Housing Prices: 121 percent
- Employment: 95 percent
- Overall: 92 percent
The Greater Greenville area is ranked 115 overall out of 351 markets nationwide. The top market is Midland Texas at 239 percent of normal. The bottom market is Flint Michigan at 61 percent of normal.
The Greater Greenville area is defined as Greenville, Pickens, and Laurens counties.
Other South Carolina markets are as follows:
- Spartanburg, 88 percent
- Columbia, 88 percent
- Charleston, 102 percent
- Myrtle Beach, 100 percent
- Charlotte, 85 percent
- Augusta, 98 percent
- Florence, 90 percent
- Sumter, 99 percent
To read the full report, click here.
by Michael Dey | Nov 6, 2014 | Uncategorized
Markets in 59 of the approximately 350 metro areas nationwide returned to or exceeded their last normal levels of economic and housing activity in the third quarter of 2014, according to the National Association of Home Builders/First American Leading Markets Index (LMI), released today.
This represents a year-over-year net gain of seven markets. The index’s nationwide score moved up slightly from .89 in the second quarter to .90, meaning that based on current permit, price and employment data, the nationwide average is running at 90 percent of normal economic and housing activity. Meanwhile, 66 percent of markets have shown an improvement year-over-year.
The Local Picture
According to the data, Greenville is at 91 percent of normal. Permits continue to be the limiting factor, at just 59 percent of normal. Housing prices are a 119 percent of normal, an indication that supply is not meeting demand and a house-price bubble may be forming. Meanwhile jobs are at 94 percent of normal. Greenville is ranked 121 among the 359 housing markets in the country based on the data in the report.
Two other markets in South Carolina are at or above normal: Charleston, at 100 percent, and Sumter, at 104 percent. Myrtle Beach is near normal at 98 percent. Florence (89 percent), Columbia (87 percent) and Spartanburg (85) percent round out South Carolina’s housing markets.
The National Picture
“The markets are recovering at a slow, gradual pace,” said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del. “Continued job creation, economic growth and increasing consumer confidence should help spur pent-up demand for housing.”
Baton Rouge, La., continues to top the list of major metros on the LMI, with a score of 1.39 – or 39 percent better than its last normal market level. Other major metros leading the list include Austin, Texas; Honolulu; Oklahoma City and Houston. Rounding out the top 10 are Los Angeles; San Jose, Calif.; Salt Lake City; New Orleans and Charleston, S.C. — all of whose LMI scores indicate that their market activity now equals or exceeds previous norms.
“An uptick in the number of single-family permits, which is currently only 44 percent of normal activity, is the key to a full-fledged housing recovery,” said NAHB Chief Economist David Crowe. “In the 17 metros where permits are at or above normal, the overall index shows that these markets have fully recovered.”
“Nearly half of all the markets on the Leading Markets Index are up since August, which is a good sign that the ongoing housing recovery will keep moving forward in 2015,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Company, which co-sponsors the LMI report.
Looking at smaller metros, both Midland and Odessa, Texas, boast LMI scores of 2.0 or better, meaning their markets are now at double their strength prior to the recession. Also leading the list of smaller metros are Grand Forks, N.D; Bismarck, N.D.; and Casper, Wyo., respectively.
The LMI shifts the focus from identifying markets that have recently begun to recover, which was the aim of a previous gauge known as the Improving Markets Index, to identifying those areas that are now approaching and exceeding their previous normal levels of economic and housing activity. More than 350 metro areas are scored by taking their average permit, price and employment levels for the past 12 months and dividing each by their annual average over the last period of normal growth. For single-family permits and home prices, 2000-2003 is used as the last normal period, and for employment, 2007 is the base comparison. The three components are then averaged to provide an overall score for each market; a national score is calculated based on national measures of the three metrics. An index value above one indicates that a market has advanced beyond its previous normal level of economic activity. Editor’s Note: In calculating the LMI, NAHB utilizes employment data from the Bureau of Labor Statistics, house price appreciation data from Freddie Mac and single-family housing permits from the U.S. Census Bureau.
The LMI is published quarterly on the fourth working day of the month, unless that day falls on a Friday — in which case, it is released on the following Monday. For historical information and charts, please go to nahb.org/lmi.
