Photo: Mike Bitzenhofer/Flickr
Smaller cities in Texas and North Dakota are seeing their real estate markets perk up. However, the recently released National Association of Home Builders/First American Leading Markets Index (LMI) showed small signs of progress across the United States in the third quarter.
Of the 351 metro areas studied, 59 returned to their last normal levels of economic and housing activity, or even exceeded it. Midland, Texas and Odessa, Texas took spots number one and two and both had scores of more than 2.0. In other words, their markets are performing at double their strength prior to the recession.
The index ranks metros by measuring the average for single-family housing permits, home prices and employment levels for the past 12 months. It then divides each factor by its annual average over the last period of normal growth (2000-2003 for permits and home prices and 2007 for employment).
“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.”
The index’s nationwide score improved from 0.89 in the second quarter to 0.90 this quarter, meaning the country’s average is running at 90 percent of normal economic and housing activity. Compared to the same time last year, 66 per cent of the markets improved their score.
The index also compares big city performance, ranking the top ten large markets which are home to populations greater than or equal to 500,000 people. Baton Rouge took top place with an index score of 1.39.
We mapped the rankings to see if there were any regional trends. Midwestern states such as Michigan, Ohio and Illinois appear to be performing poorly in comparison to Texas, parts of Louisiana and the boomtowns of North Dakota.
Play around with our interactive map and tables below to see how your city compares: