Exclusive: In 10 Markets to Watch, Who’s the King of New Home Building?

Many housing industry observers predict 2015 to be a promising one for home sales, after an underwhelming, flat performance in 2014. Booming metros like Atlanta and D.C. are among the ten hot housing markets to watch in 2015, according to Realtor.Com’s chief economist Jonathan Smoke. Among the key demand fundamentals Smoke looked at in naming the 10 markets to watch: household growth, demand, and expected increase in millennial buyers. Will these hot housing markets prove just as popular for the new home buyer?

All ten markets that earned the “ones-to-watch” designation have had steady new-home sales from 2012 through 2014, with most experiencing year-over-year increases. Based on 2014 closings (which may still be revised upward in the coming months), only a few markets that make the list show shakiness in the new-home market. The Phoenix new-home market, for example, experienced fading affordability toward the end of 2014 and a drop in new-home sales. Still, Metrostudy predicts a slight increase in new-home sales over the next couple of years. The Minneapolis-St. Paul market also experienced a sales slump toward the end of last year, but affordability is expected to keep the market growing. Here are the top 10 hot markets to watch this year and combined new-home closings from 2012 through 2014:

The public builders rule the majority of markets to watch, particularly where there is strong demand for home buying. Two builders are each conquering two of the markets to watch—D.R. Horton leads the Atlanta and Dallas markets in sales for the past three years while Lennar rules Houston and Minneapolis. Jerry’s Homes is among smaller builders making top sales as the leading builder by closings in the Des Moines market. The Texas markets continue to outshine the rest of the nation in subdivision sales with Houston’s leading subdivision closing 553 homes and Dallas’ closing 606 from 2012 through 2014.

Here is the breakdown of top builders and subdivisions in the 10 hot markets for the past three years:

Metrostudy predicts an increase is housing starts by about 15 percent this year over 2014, and total new-home sales around 500,000. A chunk of this is likely to come out of the top markets to watch, especially where affordability brings Millennials to the new-home market.