Prognosticator: Ivy Zelman, principal, Zelman & Associates
Ivy Zelman’s group produces a monthly survey of hundreds of private builder contacts who rate local markets. The group also closely analyzes government data releases, new home sales, and public builder reports.
Based on those surveys, coupled with the organization’s own analysis, Zelman produces a Homebuilding Survey Market Summary. Most of these markets still get grades in the D-area. But several have risen to the top.
1. Salt Lake City, Utah. Public builders may not like Salt Lake City—several have pulled out in recent years, unable to make money—but Zelman does. She expects it be more resilient than other markets because it has experienced fewer job losses than other Western markets. Also, her network of builder contacts reports a positive reaction to a new $6000 tax credit to all buyers with income under $75,000 ($150,000 for joint filers) who purchase a primary, new home in the state.
2. Northern Virginia. Zelman is bullish on the development-friendly Virginia side of the Washington, D.C. market, less so on the Maryland side. She recently released a report on D.C. saying its “fundamentals are among the best in the country. It is well positioned for sustainable recovery given incremental job growth and land constraints.”
3. San Diego, Calif. “There’s no one left there,” says Zelman, listing all the public builders who have pulled out and the private ones who have gone out. Home price declines, coupled with the city’s fame as a great place to live, could prime the market for growth. “A strong military presence is another reason this market makes the list,” she says.
4. San Antonio, Texas. San Antonio continues to rank high on Zelman’s Market Summary list, even as other markets fluctuate. “It has one of the ten highest rates of job growth in the country.”
5. Cleveland, Ohio. “I’m not just putting this market on the list because I live there,” says Zelman, adding that demographic trends such as an aging population work to the market’s advantage. “Everyone comes back to Cleveland, and I think you are going to see more of that in the future. Housing here is under-valued, and there’s a strong health care industry.”