41: Cincinnati, Ohio-Kentucky-Indiana
Total new-home closings: 4,362
Population: 2,149,449
The good: Overall market share of single-family detached homes rose in early 2015.
The bad: Steep drop offs in closings year over year in February and March 2015 parallel price increases.
The bottom line: While single-family detached builders may have grabbed some additional market share, they’ll need to contend with rising prices and a market that showed overall weakening in early 2015.
While Cincinnati closed out strong in 2014, the early 2015 market slowed in everything but pricing. Prices rose by 12% year over year in January and 16.2% in February, as the number of new-home closings fell year over year by 61.5% and 64%, respectively. Meanwhile, the overall market share for new homes was cut in less than half over the same period, from 2.3% to 1%, not helping matters for builders. If there’s any good news from early 2015, it’s that the overall market share among single-family detached homes rose from 82% in February 2014 to 94.4% in February 2015. Those increases, however, will need to contend with square footage decreases of 20.2% year over year. Year-to-date single-family permits were down by 4% year over year in March, possibly as a consequence of early indicators.
See complete Cincinnati market data >
42: El Paso, Texas
Total new-home closings: 2,310
Population: 836,698
The good: Steep year-over-year decreases occurring in early 2015 moderated, followed by an increase in year-to-date permits in March.
The bad: Drops in year-to-date closings and decreasing market share among single-family products came in tow.
The bottom line: With unemployment improving year over year in March, along with signs of market improvement, there’s hope for another strong turnout in 2015 for builders.
While steep year-over-year declines in new-home closings occurred in February 2015 (by 79.5%), a narrower drop in March—along with an increase in year-to-date single-family permits of 40%—give builders hope for the remainder of 2015. The total of 651 new homes sold over the 12-month period ending in March was down from 750 for the year ending February. As a result, a little extra effort will be necessary to close out a strong year, as builders contend with decreasing market share among single-family products, which shrank year over year in March for two consecutive years from 85% to 70%, and decreasing overall market share among new homes, which fell from 15.9% to 4.3% year over year in March. A 1.5% year-over-year drop in unemployment in March may help.
See complete El Paso market data >
43: Naples-Immokalee-Marco Island, Florida
Total new-home closings: 2,299
Population: 348,777
The good: Growth has occurred, despite increasing prices and amid lower unemployment.
The bad: The market is relatively small in size to begin with.
The bottom line: Though it may not be one of the largest metro statistical areas, this market shows momentum in recent years and into the near future.
All systems show “go” for builders in and around Naples over the past few years. After gathering momentum in 2013, then registering its 12th consecutive quarterly increase in the annual starts rate in 2014, this market proved that it can continue to grow, even as the average price of new homes rises. As a percentage of overall housing, new-home closings increased from 7.8% to 9.2% market share in March 2015. This may be partly due to drops in unemployment, which helped to drive 2014 results, then decreased even further year over year in March 2015 to 5.4%, which is just under the national average. At the same time, a 45% year-over-year climb in year-to-date single-family permits in March 2015 shows that builders anticipate additional room to grow in the region.
See complete Naples market data >
44: San Jose-Sunnyvale-Santa Clara, California
Total new-home closings: 2,116
Population: 1,952,872
The good: Unemployment remains in a nosedive and permits were up as of March 2015.
The bad: Though leveling, decreases showed in early 2015.
The bottom line: With relatively modest decreases in activity occurring despite steady increases in new-home prices, the region shows continued promise for builders.
After a tough month in February 2015—including a 25.6% year-over-year decline in new-home closings—in February, the new-home market showed promise of leveling out around San Jose, with a more modest 3% year-over-year decrease. Total new-home closings over the 12-month period ending in March also showed a modest drop, down to 2,099 from 2,104 a year earlier. With the average new-home price showing a steady increase, an increase in year-to-date permit figures of 24% year over year in March 2015 may be a positive indicator of what builders feel this market will bear. Add to that unemployment levels that have been in a steady nosedive since 2012, dropping year over year in March 2015 from 5.5% to 4.2%, and it’s no wonder they continue to show confidence in the region.
See complete San Jose market data >
45: Colorado Springs, Colorado
Total new-home closings: 2,076
Population: 686,908
The good: More buyers selected single-family homes in the first months of 2015.
The bad: Early figures showed a decline in the new-home market as prices rise at the start of the year.
The bottom line: Only a slight year-over-year decline in year-to-date permits in March 2015 shows that things may be down, but still going.
As new-home prices trend upward and sales are down, the first few months of the year indicate that 2015 will produce no gold rush for builders in Colorado Springs. In February, new-home closings fell by 2.2% year over year, only to post an even steeper decline year over year in March of 2.9%. The percentage of new homes making up the overall housing market also fell year over year in March to 12.8%, from 15.4% a year earlier, perhaps reflecting an increase among the average sales price occurring year over year in February to $321,160. But March numbers show that more buyers are selecting single-family homes, which held 88.5% of market share that month. Meanwhile, a drop in year-to-date single-family permits of 2% year over year in March may show that while things are slower, builders are still at it in 2015—gold rush or no gold rush.
See complete Colorado Springs market data >
46: San Diego-Carlsbad, California
Total new-home closings: 2,003
Population: 3,263,431
The good: With prices dropping and permits up, Metrostudy predicts a stable path ahead.
The bad: Starts were down in the first quarter of 2015, as nearly a quarter of home buyers can no longer afford new properties.
The bottom line: With corrections showing in sales prices and confidence showing through increased permits among builders, this market aims for continued success.
As the average price of new homes dropped by 11.5% in the first quarter of 2015, compared with the fourth quarter of 2014, that change couldn’t come quickly enough for the 23% of home buyers who can’t afford new properties in San Diego. With a difference of nearly $170,000 in the median prices of new homes and resale properties (with the latter being the most affordable), those buyers already have been forfeited to existing homes. A wave of market activity in the fourth quarter of 2014 fueled a 5.2% increase in new-home closings in the first quarter of 2015, while starts decreased by 7.8% over the same period. But, with a total of 687 single-family permits arriving in January and February 2015—totaling 27% of all permits approved for the previous year—followed by a 19% year-over-year increase in March, Metrostudy predictions call for a fairly stable path ahead for builders.
See complete San Diego market data >
47: Virginia Beach-Norfolk-Newport News, Virginia-North Carolina
Total new-home closings: 1,941
Population: 1,716,624
The good: An increase in market share occurred in early 2015 among single-family homes.
The bad: Closings are down, even with decreases in square footage and prices.
The bottom line: With the warmest months ahead, builders posted a 13% year-over-year increase in year-to-date permits in March 2015, showing confidence that the new-homes market will reach high tide again.
As new-home closings and average square footages dropped in Virginia Beach—despite decreasing prices—the market showed signs of an outward tide in early 2015. Foreclosures and REOs both decreased in February 2015 year over year, but with a 38.7% share of existing closings, continue to be a burden on the market. An increase in the market share of single-family homes shows a beacon of hope, increasing by 14.9% year over year to 91.8% in February 2015, but those homes will fetch less money, following a decrease in the average square footage of new homes of 5.9% year over year in February and a drop in the average new-home price over the same period of 5.7%. That said, a 13% year-over-year increase in year-to-date single-family building permits in March shows that builders are still searching for a wave to surf in 2015.
See complete Virginia Beach market data >
48: Provo-Orem, Utah
Total new-home closings: 1,889
Population: 571,460
The good: Every market indicator in early 2015 showed positive, along with outstandingly low unemployment.
The bad: With everything up in the first part of 2015—despite increased prices—there’s nothing to report here.
The bottom line: This market was tagged for take off in mid-2014 and, so far, that’s proving true in 2015.
In mid-2014, studies showed this second-tier market attracting a lot of attention from builders and developers, landing it 10th on Metrostudy’s Top Markets by Outlook rankings. And in early 2015, those predictions proved true. With unemployment rates at just 3% in March 2015 and foreclosures plus REOs accounting for only 9.4% of the existing homes market, this area’s momentum comes as no surprise. New-home closings jumped by 62.1% year over year in March 2015, following a 54.5% increase in February. At the same time, the percentage of new-home closings claimed by single-family dwellings rose, while the share of new homes as a percentage of overall closings increased to 21% from 15.1% a year earlier. With positive changes occurring even as the average price for new homes rose by 2.2%, 2015 is shaping up to be another big one for this little market.
See complete Provo market data >
49: Richmond, Virginia
Total new-home closings: 1,852
Population: 1,260,029
The good: February 2015 posted gains in single-family market share, reaching 98.1%.
The bad: Despite being the month of McMansions (with average square footages more than doubling year over year), the average new-home price in February rose by only 1.9%.
The bottom line: With January and February posting large dents year over year in closing figures and the average home price rising, builders will need to lean on more than super-sized homes to stay on track for a big year in 2015.
Total new-home closings fell in the first months of 2015 in Richmond, but to a lesser degree in February than in January, providing some hope for leveling. And the fact is— while new-home closings saw a 53.4% drop year over year in February, builders may not have noticed it by looking at their dollars earned for that month, thanks to a more than doubling of the average unit size of newly sold homes to 6,698 square feet. Whether the 9% year-over-year increase in year-to-date single-family building permits will produce the same McMansions sold in February is yet to be seen, but based on a narrow 1.9% year-over-year increase in the average sales price for newly sold homes in February, builders will need to do more than super-size their projects in order to cook up a big year for the remainder of 2015.
See complete Richmond market data >
50: Greenville-Anderson-Mauldin, South Carolina
Total new-home closings: 1,842
Population: 862,463
The good: New homes compete well with existing properties by falling closely in line with their average pricing.
The bad: While unemployment fell in most leading markets year over year in March 2015, this area saw an increase of 0.7%, bringing it to 6.1% (above the national average of 5.5%).
The bottom line: While this market put up an impressive number of new-home closings relative to its population in 2014, indications are that it may have peaked along the way.
While the new-home market in Greenville posted strong results in 2014—especially for an area with fewer than 1 million in population—in early 2015 it showed signs of leveling. Annualized permits for single-family homes trended slowly upward after April 2014, and then peaked in September 2014, at 1,771, before leveling off to 1,565 in March. Meanwhile, the share of single-family dwellings among all new-home sales fell by 12% year over year in March to 73%, despite the average new-home sales price falling at $189,000—well within the market range with the most buying activity at $100,000 to $200,000. With the median list price among all single-family listings (new and existing) coming in at $169,900 in June 2015, it’s difficult to say why the share of new single-family homes eroded slightly in early 2015, but with year-to-date single-family permits rising year over year in March by 9%, the second half of the year still holds potential.
See complete Greenville market data >
Don’t forget to also check out BUILDER’S 2015 Local Leaders
