LIFE IS A SIMPLY LITTLE LESS INTERESTING FOR Stanley Duobinis these days. The president of Crystal Ball Economics and former director of forecasting at the NAHB specializes in ranking regional and local housing markets. Only thing is, those markets and regions are varying less and less.
“One of the things we've been seeing in the past several years is a squeezing of the range of best to worst,” Duobinis observes. Currently, he says, with the economy recovering at a steady but unenthusiastic pace and no steep rises or falls in employment occurring now or in the near term, the home building industry is experiencing a phase in which the weaker markets “get a little bit stronger and the stronger get a little bit weaker.”
That, of course, is somewhat of a generalization. Still, “We certainly have this movement toward mediocrity, which makes my job a little less interesting,” says Duobinis with a laugh.
That doesn't mean there aren't differences from market to market. Clearly, builders find some markets more appealing than others—they may have more margin potential, competition may not be as keen, or demographics may make their long term prospects extremely favorable. With that in mind, BIG BUILDER magazine—with the help of Hanley Wood Market Intelligence—has put together our annual projection of the top 20 home building markets for 2005 based on projected permit levels. The top 20 markets span from 64,800 permits on down to 22,000. Aseparate table on page 24 offers a glimpse of the remainder of the nation's top 50 markets.
Perhaps indicative of how home building levels will fare in 2005, the forecast calls for a 3,000 permit decline in Atlanta. At a hefty 64,800 permits, though, Atlanta will remain the biggest home building market in the country. Just as Duobinis' theory asserts, a strong market is getting just a little bit weaker.