By almost any standard, 2014 has been a disappointment for home builders. As of October, starts were up only 2 percent compared with 2013; sales volume rose about 7 percent; and home prices ticked up roughly 5 percent, according to Metrostudy.

On the surface, home builders looked like the victims of these trends, but Dave Goldberg, an analyst for UBS in New York, thinks they also played an active role in their own loss of momentum. Aside from some moves like Miami-based Lennar Corp.’s increasing realtor sales commissions and Fort Worth, Texas–based D.R. Horton’s push into the entry-level market, many big builders seemed bent on pushing the line on pricing and location.

“Sales have been disappointing,” Goldberg says. “Builders have chosen to stay in A and B locations. They haven’t expanded their land positions into more peripheral areas. For the most part, the disappointing sales paces have been met with, ‘That’s OK, we’re not going to cut prices.’” Possibly as soon as 2015, Goldberg says he expects things to change. “I believe the volume comes in 2015, 2016, and 2017. I believe it comes from C and D locations.”

Metrostudy chief economist Brad Hunter, who projects a 15 percent increase in starts and sales volume in 2015, already sees builders pushing to farther-out locations. If the market does increase in 2015, high-volume builders are positioned to capture that growth, at least early on. In 2014, it seemed like a public builder bought a smaller operator on monthly basis, if not more often. That trend should continue.

“You will see publics who desperately need land to keep their engines running buying the smaller guys that are going to offer them a whole bunch of lots,” says Doug Yearley, CEO of Horsham, Pa.–based Toll Brothers.

Others agree. “I think big builders are looking for better ways to get positioned within markets or go to markets they have not been in,” says Stephen East, partner and senior managing director of ISI Housing Research in New York. Without access to capital, many smaller builders have decided to exit and sell to competitors who want to move into their markets or pick up a large share. “You see private guys that got through the downturn and they’re monetizing,” East adds. “They wanted to monetize before but haven’t been able to.”

To capture more ground in 2015, smaller builders need to find ways to snare more lots. In Goldberg’s vision of a recovery that extends beyond A and B locations, this happens as the playing field widens for smaller builders.

“If recovery goes to peripheral locations and lending loosens up, I don’t think the big builders’ land positions crowd out the small guys,” he says. “If it stays concentrated, it’s harder for the smaller guys to stick around. The advantage of paying up to corner land in better locations starts to diminish if it becomes more volume oriented and moves into markets with less land constraints.”

Metrostudy’s outlook for 2015—highlights of which are depicted on the following pages—shows the most growth potential in markets where builders are pushing past A and B locations.

Healthiest Markets of 2015

Florida markets occupy four of the top 10 slots on this list. The legendary retiree community in central Florida, The Villages, has the highest overall rating—96—meaning that the outlook for demand and overall market conditions are extremely favorable. The massive master planned community is so large and influential that it’s considered its own “market.” The No. 2 market, Orlando-Kissimmee-Sanford, should continue to grow rapidly in 2015 amid improving job markets. Raleigh, N.C., is poised to continue its expansion as builders further broaden their offerings, and Austin, Texas, and Salt Lake City will remain robust. Based on market studies we’ve completed in Denver lately, more communities will open there next year.

Sales Rise in the Sun Belt

The top market as measured by new-home sales is Houston. High oil prices have goosed the local economy for years. The outlook is for another large gain in 2015, despite the recent decline in oil prices. If the oil price decline turns out to be a sustained correction, then the Houston housing market could suffer. Riverside, Calif., also is experiencing a resurgence after some tough years during the downturn, and it will continue to rebound in 2015. Dallas has not slowed down, despite labor shortages, and also will push forward in 2015.

Double-Digit Price Increase at The Villages

Prices are expected to rise next year at The Villages, but part of the 11.8 percent increase is reflective of a change in the type of product in the “mix.” More expensive homes are being sold.

The Villages outpaces the No. 2 market, Deltona-Daytona Beach-Ormond Beach, Fla., by more than 450 basis points. Three other Florida markets also make the median home price list of leaders. Tucson, Ariz.—another market in a warm climate—checks in at No. 3.

Interestingly, the Mid-Atlantic also is home to some of the biggest expected jumpers on the median home price list in 2015, including Allentown-Bethlehem-Easton, Pa.-N.J.; Baltimore-Columbia-Towson, Md.; Salisbury, Md.-Del.; and Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md.

Despite similarities in proximity and climate, the major connection for many of these nine markets following The Villages is their 2014 performance. Some of the other markets that are expected to see strong percentage gains are coming off of low current price levels.

55+ Housing in Demand

Households drive housing demand. Another person turns 55 years old in this country every 15 seconds, which drives more demand for 55+ housing. That demand will push the numbers even higher at The Villages. Florida’s Cape Coral-Fort Myers market also will benefit from retiree growth, as well as more relocation demand and move-ups from rentals and existing homes.

Homeownership Rates Rise in Florida

After rising to an all-time high of 69.2 percent in 2005, the homeownership rate has fallen to less than 65 percent over the past decade. But some markets are starting to see a turnaround.

Florida’s The Villages is expected to see a further increase in its already high homeownership rate. In other cities, low homeownership rates will provide a springboard to 2015. In Nevada, Las Vegas and Reno are still recovering, as is Chicago, and they’re all coming up from a relatively low level. After those markets, Florida dominates the list with six metros rounding out the top 10.

Houston Tops Single-Family Housing Starts

As with the home sales ranking, housing starts put Houston at the top of the list. Most of the other starts leaders in 2015 will be markets where builders can secure the raw material—labor, land, and materials—to start new projects.

Riverside, Calif.–area builders are scrambling to meet demand and are pushing farther east to find building lots. Builders in Dallas are pushing their capacity as well, as they assemble more lots and struggle to find enough skilled workers to keep up with demand.