Most economists are predicting a slow haul for job-market recovery, so predicting the best states for housing in the coming year can be tricky.
Zandi, looking at specific metro areas, said those focusing on computer chips and the software industry are already ahead of the pack — including Orange County in California; El Paso, Austin and Houston in Texas; Miami, Atlanta and Raleigh in the Southeast; and Phoenix and Albuquerque in the Southwest.
Distribution-heavy economies such as those found in Orange County and Atlanta should particularly rebound in early 2004, he noted.
By the second half of next year, Zandi sees a pickup in the manufacturing and financial/banking centers, including Los Angeles, Charlotte and Fort Worth.
But it will take until the beginning of 2005 to see substantial recovery in areas where the air transportation and telecom industries reign, including Denver, Dallas and Oakland, Zandi said — and even longer until the auto industry picks up speed along with investment banking. Seattle; Portland, OR, Toledo; Kansas City; Columbia, SC; San Francisco; San Jose; Boston, and New York may have to wait until 2006 to see a comeback.
Duobinis’s advice for home builders who are looking to target buyers from beyond their current market: “If you want to pinpoint your next generation of buyers, find out where most of your current buyers are coming from.”
States that have had lots of in-migration in the past are in good position for another influx in the future because of what he terms the “friend connection.” In other words, people base their decisions on where to move not just on where the jobs are, but on who they know in a certain locale.
States that had the greatest net migration in 2002 included Florida, Georgia, South Carolina, North Carolina, Virginia, Maryland, Texas, Arizona, Nevada and Oregon.
Another typical gateway state also warrants mention — California. “Almost one million people are moving into and out of California every year, and such turnover generally makes for an active for-sale and rental housing market,” Duobinis said.
Given the strong building activity that characterized most housing markets even throughout the recession, it will be difficult for many to continue speeding up the pace of housing production now that recovery is underway
Duobinis’s picks for states that will post the most significant increases in single-family housing starts between this year and next include North Dakota, California, Alaska, South Carolina, New Jersey, Connecticut, Rhode Island and Massachusetts.
On the multifamily side, most states will post some decline from previous building activity, but there are exceptions to any rule. The following seem destined to register gains in apartment building over the coming year: Alaska, Utah, Colorado, Kansas, Missouri, Minnesota, Montana, Idaho and Oregon.
Looking at the best states in terms of housing starts per capita in 2004, Duobinis named Nevada, Arizona, Utah, Idaho, Colorado, Florida, Georgia, South Carolina, North Carolina and Virginia. “All of these markets have two things in common,” he noted — “a generally pro-growth attitude and favorable weather conditions.”
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