Improving Markets Index: Greenville, SC MSA

NAHB recently unveiled an index that tracks housing markets on the mend, the NAHB/First American Improving Markets Index (IMI).  The IMI is intended to draw attention to the fact that housing markets are local and that there are metropolitan areas where economic recovery is underway.  The index measures three readily available monthly data series that are independently collected and are indicative of improving economic health.  The three are employment, house prices and single family housing permit growth.

For the ninth release 80 markets are currently classified as improving under a conservative examination of local economic and housing market conditions.  Among these areas is the Greenville-Mauldin-Easley, South Carolina metropolitan statistical area (MSA).

The health of the Greenville housing market has been due Greenville’s ability to reinvent itself from a large textile town to a growing automotive, logistics and healthcare center.  Being half way between Atlanta, GA and Charlotte, NC and located on the busy I-85 corridor has made Greenville a transportation hub with trucking firms and distribution centers all choosing to locate there.  In addition, Greenville is also a large regional healthcare center with two major health systems both of which are growing and highly regarded.  Lastly, the Greenville area is a major automotive center with not only the Clemson University International Center for Automotive Research but is also North American headquarters for BMW and Michelin.   

According to home builder Rick Quinn, President of Quinn Satterfield Homes, Inc., “the combination of low property taxes, business friendly policies, affordable housing, our location at the foothills of the Blue Ridge Mountains, along with a large, growing and diverse employment base makes us an increasingly desirable place to live.  On top of that, our conservative nature prevented us from seeing house prices go way up or come way down.”  He went on to say that “the steady flow of retirees moving here to take advantage of the good weather, and many recreational opportunities such as fishing and hiking has also materially helped our housing market as has the limited supply of existing houses.”          

According to Matt Vaughn, Branch Manager and Associate Vice President at Brand Mortgage “great amenities and healthcare along with lots of jobs and low taxes have been causing northerners to relocate here after first moving to Florida as they can enjoy a lower cost of living and find good employment opportunities.  And that has been augmented with the newly opened Center for Emerging Technologies and the presence of a Lockheed Martin Aircraft and Logistics Center as well as 3M and Honeywell locating at the former Donaldson Air Force Base.  What’s scary is that unless there is some quick large-scale development I’m afraid we will run out of finished lots by the end of 2013.”  Whatever the causes, house prices have held up well over the past few years.  Prices are up 0.7% since the trough in January 2011 and are off less than 6% from their all-time high set in August 2008.      

Improving economic conditions have resulted in payroll employment being down just 5.2% from its high set in February 2008 and up by 4.0% since the trough in September 2009.  Single family permitting activity is up 3.2% on a seasonally adjusted monthly average basis from the trough set in September 2010.  While new homes are being built in many parts of the Greenville MSA, activity has been primarily centered in the City of Greenville, in the northern end of the county near the mountains around Travelers Rest and south of Greenville towards Columbia in Simpsonville. 

Improving Markets Index: Grand Junction, CO MSA

NAHB recently unveiled an index that tracks housing markets on the mend, the NAHB/First American Improving Markets Index (IMI).  The IMI is intended to draw attention to the fact that housing markets are local and that there are metropolitan areas where economic recovery is underway.  The index measures three readily available monthly data series that are independently collected and are indicative of improving economic health.  The three are employment, house prices and single family housing permit growth.

For the ninth release 80 markets are currently classified as improving under a conservative examination of local economic and housing market conditions.  Among these areas is the Grand Junction, Colorado metropolitan statistical area (MSA).

The health of the Grand Junction housing market is due to its diversification away from just oil and gas following the oil shale bust of 1982, strong growth at Mesa State University, a large number of state employees, and, being the largest city between Salt Lake City and Denver, its position as a very large regional healthcare center.  The rise of the healthcare industry can be seen by the recent additions at both St. Mary’s Hospital and Community Hospital.  Grand Junction also offers abundant outdoor activities, spectacular scenery, top-notch recreational opportunities and is a major mountain biking destination and also has a number of nearby ski resorts and vineyards.  As such, tourism and retirees are also fueling the local economy.      

According to home builder Nate Porter, President and owner of Porter Homes LLC, “the continued expansion of the healthcare industry, and the growing importance of tourism have collectively shielded the community from the worst of the recession and the recent decline in gas prices.  As for the building industry, we have been holding our own due to an influx of retirees and Gen X-ers attracted to Grand Junction for its high quality healthcare, abundant and well paying healthcare jobs, and quality of life (biking, hiking, fishing and skiing).”  Mr. Porter went on to say that “many home buyers realize that it is cheaper to buy an energy efficient green home rather than a foreclosure and that attitude translates into demand for new homes as there are only a limited number such houses available.  Collectively because of all these diverse forces, construction activity is slowly rebounding.”          

Comparing 2010 American Community Survey data for Grand Junction to the US offers strong evidence that Grand Junction is doing well and insight into why.  The percentage of persons with some college but no degree is 23.0% higher than in the rest of the country and the percentage with a bachelor’s degree is 18.4% higher than it is everywhere else.  In addition, the percentages of persons employed in educational services, healthcare and social assistance and in the arts, entertainment and recreation industries are 17.2% and 10.9% higher respectively than the national average.  Lastly, the percentage of owner-occupied units stands at 72.5% versus 65.4% for the nation and the number of vacant housing units, be they owner-occupied units or rental units, is just 8.6% in Grand Junction compared to 13.1% elsewhere.          

According to Rich Buffington, an associate board member of the Home Builders Association of Northwestern Colorado, “Grand Junction is perking up because things always improve and we are more accustomed to cycles because of the role energy plays in our economy.  In addition, many folks who used to work in the oil and gas industry here, now work in the Bakken shale in North Dakota but continue to live here with the same being true for many subcontractors.  As such, the local economy is much healthier than would otherwise be the case.  In addition, education, healthcare and the continued influx of retirees are also part of the reason for the turnaround in our economy local economy.”  Whatever the cause, house prices are definitely on the mend.  Prices are up 0.7% since the trough in July 2011 and appear on track to continue to increase in the days ahead.        

Improving economic conditions have resulted in payroll employment being down less than 10% from its peak in August 2008, and up by 3.4% since the trough in January 2010.  Single family permitting activity is up 6.2% on a seasonally adjusted monthly average basis from the trough set in June 2011.  While new homes are being built in many parts of the Grand Junction MSA, activity is currently centered northwest of Grand Junction in the City of Fruita, west of Grand Junction, in the Redlands, and in the “northwest.” 

Improving Markets Index: Bloomington, IN MSA

NAHB recently unveiled an index that tracks housing markets on the mend, the NAHB/First American Improving Markets Index (IMI).  The IMI is intended to draw attention to the fact that housing markets are local and that there are metropolitan areas where economic recovery is underway.  The index measures three readily available monthly data series that are independently collected and are indicative of improving economic health.  The three are employment, house prices and single family housing permit growth.

For the eighth release 100 markets are currently classified as improving under a conservative examination of local economic and housing market conditions.  Among these areas is the Bloomington, Indiana metropolitan statistical area (MSA).

The health of the Bloomington housing market is due to its position as a very large regional healthcare center and the Indiana University and all of its research facilities and associated high-tech firms.    Bloomington is also home to a large Baxter Pharmaceuticals facility and is headquarters to the Cook Group Incorporated, a company primarily involved in manufacturing of medical devices.  As a result, Bloomington’s concentration of employment in the life sciences and medical devices is many times greater than the U.S. average and has been growing rapidly in recent years.  

According to home builder Aaron Stolberg, President and Owner of WS Homes, Inc., “the continued expansion of the University and the growing importance of healthcare and medical devices have collectively shielded the community from the worst of the recession.  As for the building industry, we have been doing better of later due to construction lending being extended by smaller local banks.”  He went on to say that “another reason activity is up is because more than half of all buyers are retires and almost as many are from out of town.  Lastly, pent-up demand from buyers who were on the fence just a few months ago is finally materializing because of an improving economy and a rise in exports.  As a result of these different forces, construction activity is slowly and steadily improving.”          

Comparing 2010 American Community Survey data for Bloomington to the US offers strong evidence that Bloomington is doing well and some insight into why.  The percentage of persons with a graduate or professional degree is 43% higher than in the rest of the country and the median age is almost 16% lower in Bloomington than it is everywhere else.  In addition, the percentages of persons employed in educational services, healthcare the social assistance industry and in the arts, entertainment and recreation industry are 48% and 35% higher respectively than the national average.  Lastly, the percentage of owner-occupied units stands at 73.4% versus 65.4% for the nation and the number of homeowners with a mortgage is just 65.1% in Bloomington, compared to 67.2% elsewhere.          

According to John Bethell, President of the John Bethell Title Company, “Bloomington is doing better than many places because retirees continue to move here, despite the poor economy, due to the close proximity to Indianapolis, the University and all it has to offer the generally low tax rates.  In addition, the anticipated construction of I-69 is already an economic boon to the entire community and the Westside in particular. It is already transforming the area and residential and commercial construction activity is heating up.”  Whatever the cause, house prices are definitely on the mend.  Prices are up 9.1% since the trough in January 2011 and down just fourth-tenths-of-one-percent from their peak set in July 2007.        

Improving economic conditions have resulted in payroll employment being down less than 8% from its peak in August 2008, and up by 1.3% since the trough in December 2008.  Single family permitting activity is up 19.9% on a seasonally adjusted monthly average basis from the trough set in September 2011.  While new homes are being built in many parts of the Bloomington MSA, activity is currently centered in preapproved subdivisions in the City of Bloomington, northwest of Bloomington in the Town of Ellettsville and the west side of town where I-69 is being built.  

Improving Markets Index: Portland-Vancouver-Beaverton, OR-WA MSA

NAHB recently unveiled an index that tracks housing markets on the mend, the NAHB/First American Improving Markets Index (IMI).  The IMI is intended to draw attention to the fact that housing markets are local and that there are metropolitan areas where economic recovery is underway.  The index measures three readily available monthly data series that are independently collected and are indicative of improving economic health.  The three are employment, house prices and single family housing permit growth.

For the eighth release 100 markets are currently classified as improving under a conservative examination of local economic and housing market conditions.  Among these areas is the Portland-Vancouver-Beaverton, OR-WA metropolitan statistical area (MSA).

The health of the Portland housing market is due to the diversified nature of the Portland economy.  Portland is a very large regional healthcare center, possesses the third largest port on the West Coast, and is an important distribution center.  In addition, Portland also benefits substantially from the presence of the Portland State University, University of Portland, Oregon Health and Sciences University, and a large number of other post secondary educational institutions.  Portland is also a major high-tech manufacturing center with its largest single employer being Intel .  Because of that, there are hundreds of technology companies located in and around Portland.  Lastly, U.S. Bancorp, Wells Fargo and many other firms have large regional facilities in town, and Portland is headquarters for Nike, Inc. and Adidas America, Inc.    

According to home builder Tom Liesy, owner of T.A. Liesy Homes Northwest, “Portland is picking up because the number of homes for sale are very low, prices are starting to rise, and many are realizing that we will very soon run out of finished lots — as soon as this summer .  All of this is causing pent-up demand to finally manifest itself.”  He went on to say that “of late, move-up buyers with good incomes, good credit scores and good down-payments are looking to buy and if they can’t sell their existing house, they rent it.”        

Comparing 2010 American Community Survey data for Portland to the US, offers strong evidence that Portland is doing well and some insight into why.  The labor-force participation rate is almost four percentage points higher in Portland than in the rest of the country, and the percentages of persons employed in production, management, business, science and the arts are 10 percent higher than the national average.  In addition, the number of persons with a bachelor’s degree is about 20 percent above the national rate, and the percentage employed in manufacturing is also about 20 percent higher than the national average.  Lastly, because the local economy is doing well, the number of vacant housing units, be they owner-occupied units or rental units, is 44 percent lower than what it is for the nation as a whole.          

According to Nate Bond, Vice President of Sales for ProBuild in the northwest, “the market is picking up because people are once again moving to Portland by choice from elsewhere.  They come for the fresh water, because of the lifestyle, because of climate change issues, and also because many of the new homes being built here are energy efficient and green certified.”  Whatever the cause, house prices are definitely recovering.  Prices are up 3.8% since the trough in March 2011 and appear to be on track to continue to increase.       

Improving economic conditions have resulted in payroll employment being down just 4.8% from its peak in April 2008 and up by 3.4% since the bottom in December 2009.  Single family permitting activity is up 2.8% on a seasonally adjusted monthly average basis from the trough set in March 2009.  While new homes are being built in many parts of the Portland MSA, activity is now primarily centered in the northeast part of the City, the west side suburbs like Beaverton, and the City of Happy Valley in Clackamas County.

Housing Starts in April – A Positive Signal

New residential construction posted promising gains in April according to today’s joint release from the Census Bureau and Department of Housing and Urban Development. Preliminary estimates for housing starts show a seasonally adjusted annual rate of 717 thousand units, split between 492 thousand single family units and 225 thousand multifamily units, gains for both sectors. This is the sixth consecutive month with starts near or above 700 thousand.

There was some concern that the slower pace in March was an indication that a warm winter had pulled activity forward and the spring months could be weak as a result, but the strength of the April figures suggests momentum, rather than payback, will be the trend in coming months.

Building permit issuance did slow in April, but the decline was concentrated in the multifamily sector and brought April multifamily permitting more in line with the earlier trend.

Today’s starts numbers were consistent with yesterday’s release of the NAHB/Wells Fargo Housing Market Index (HMI) which showed improving builder sentiment. In particular, builders’ comments referred to increasing traffic in model homes, but also increasing commitment from buyers, in the form of deposits for sales.

This continuing upward trajectory in housing starts and builder sentiment suggests that consumers are regaining their confidence, and bodes well for a strengthening housing recovery.

Construction Self Employment Rates are on the Rise

Construction is known for employing a relatively high share of self employed workers. In fact, according to the 2010 American Community Survey (ACS), the construction sector registers the second highest share of self-employed among all industries, more than 26 percent of the employed labor force, i.e. more than one in four construction workers are self employed.  Only agriculture has a higher share of self-employed, close to 34 percent, while a national average for all industries stands at 10 percent.

It has always been common for some builders and remodelers to maintain relatively small payrolls and rely on subcontractors for a large share of the construction work.  Interestingly, self-employment rates in the construction industry started to rise during the housing downturn and increased from 24 percent in 2006 to 26 percent in 2010. At the same time a national self-employment rate fell from 11 to 10 percent, and self employment in agriculture declined from 41 to 34 percent. Moreover, states known to have been hit hardest by the housing downturn – Florida, California, Nevada, and Arizona – registered some of the highest jumps in the construction self-employment rates. According to the ACS, the share of self-employed construction workers rose in Arizona from 16 to 21 percent and in Florida from less than 24 to 29 percent. Similarly, the share of self-employed construction workers increased by more than 4 percent in Nevada and almost 4 percent in California. It is likely that during the downturn builders and remodelers who were no longer able to maintain a steady work flow may have tried to manage costs by eliminating payroll positions and joining the ranks of the self-employed.  It is also possible that some construction employees laid off during the downturn were able to stay in the industry by striking out on their own.

The 2010 ACS data also show that five New England states have the highest shares of self employed construction workers.  Maine, Vermont, New Hampshire register shares in excess of 40 percent – 43.1 percent, 41.1 percent, 40.3 percent, respectively – well above a national average. Connecticut and Rhode Island follow with 38.5 and 36.9 percent. Montana registers the sixth highest construction self employment rate in the nation, 34.9 percent, i.e. more than one in three construction workers in Montana are self-employed.  Interestingly, Maine, Vermont, New Hampshire and Montana also stand out for having relatively high shares of residential construction workers in their state employed labor force.

Residential construction employment and construction self-employment rates for all states can be found in NAHB: Residential Construction Employment across States and Congressional Districts (Table 1).

Improving Markets Index: Tulsa, OK MSA

NAHB recently unveiled an index that tracks housing markets on the mend, the NAHB/First American Improving Markets Index (IMI).  The IMI is intended to draw attention to the fact that housing markets are local and that there are metropolitan areas where economic recovery is underway.  The index measures three readily available monthly data series that are independently collected and are indicative of improving economic health.  The three are employment, house prices and single family housing permit growth.

For the seventh release 101 markets are currently classified as improving under a conservative examination of local economic and housing market conditions.  Among these areas is the Tulsa, Oklahoma metropolitan statistical area (MSA).

The health of the Tulsa housing market is due to a well diversified economy based on aviation, machinery and electrical equipment manufacturing, energy and energy services and its position as a large regional healthcare center.  Tulsa also benefits from the University of Tulsa and Oral Roberts University and the Tulsa Port of Catoosa; the most inland river port in the U.S. with access to international waterways.  Tulsa is also home to an American Airlines maintenance base at Tulsa International Airport which is the city’s largest single employers and the largest maintenance facility in the world.  Finally, Tulsa is headquarters to the Dollar-Thrifty Automotive Group, and many oil and gas related firms including the Williams Companies, SemGroup and Excel Energy. 

According to home builder Glenn Shaw, owner of Shaw Homes, Inc., “the combination of a pick-up in oil and oil services, the continued growth of healthcare, and people generally feeling better about the local economy and secure that their paycheck will last for a while longer is invigorating buyers.”  He went on to say that “because inventory is low and there is little to choose from, buyers can now sell their existing homes causing both the move-up market and the move-down market to do well.”         

Comparing 2010 American Community Survey data for Tulsa to the US offers strong evidence that Tulsa is doing well and some insight into why.  The unemployment rate is almost 22% lower in Tulsa than in the rest of the country, while the labor-force participation rate is slightly higher and the average age of the population slightly lower.  In addition, the percentages of persons employed in natural resources, construction and maintenance occupations is about 20% higher than the national average as is the number employed in manufacturing.  Because the local economy is doing well, the number of vacant housing units, be they owner-occupied units or rental units, is 14% lower than what it is for the nation as a whole and the percentage of owner-occupied units stands at 67.1% versus 65.4% for the nation.  Lastly, the number of persons with high school diplomas, with some college, and with associate degrees is consistently 5% higher than for the county as a whole.              

According to Jeff Dunn, President of Millcreek Lumber & Supply Company, “Tulsa is doing well partly because we missed the real estate boom of the first half of the decade and thus do not have that many foreclosures or defaults or buyers who have lost money on their home.  Another contributing factor is the increasing importance of energy.”  Whatever the cause, house prices are definitely on the mend.  Prices are up 4.9% since the trough in February 2011 and are just 4.4% off their peak set in November 2009.        

Improving economic conditions have resulted in payroll employment being down just 4.0% from its high in September 2008, and up by 3.9% since the trough in February 2011.  Single family permitting activity is up 1.6% on a seasonally adjusted monthly average basis from the trough set in October 2010.  While new homes are being built in many parts of the Tulsa MSA, activity is now primarily centered in the Cities of Bixby, Broken-Arrow, Jenks, Owasso and Tulsa all of which are in Tulsa County.

Improving Markets Index: Boise, ID MSA

NAHB recently unveiled an index that tracks housing markets on the mend, the NAHB/First American Improving Markets Index (IMI).  The IMI is intended to draw attention to the fact that housing markets are local and that there are metropolitan areas where economic recovery is underway.  The index measures three readily available monthly data series that are independently collected and are indicative of improving economic health.  The three are employment, house prices and single family housing permit growth.

For the seventh release 101 markets are currently classified as improving under a conservative examination of local economic and housing market conditions.  Among these areas is the Boise, Idaho metropolitan statistical area (MSA).

The health of the Boise housing market is due to its position as a large regional healthcare center, the presence of Boise State University, the large Federal government presence and its role as the state capital and thus the large number of state government workers.   Boise is also the headquarters for Boise Cascade, Albertsons, J.R. Simplot and several other major companies.  Finally, there is a large high-tech presence in Boise anchored by the headquarters of Micron Technologies with other firms like Hewlett-Packard, Sybase, Microsoft, having sizable facilities in town.    

According to home builder Bobbie Schultz, Owner of Jordan Homes LLC, “the combination of a pick-up in manufacturing activity, the continued growth of healthcare, and people generally feeling that the worst is over is causing people to buy rather than continuing to wait.”  She went on to say that “because inventory is very low and there is little to choose from, when retirees move here or when a local family wants more space more often than not they wind up building a new house.  As a result of these different buyers, construction activity is picking up both at the low end of the market and at the high end.”        

Comparing 2010 American Community Survey data for Boise to the US offers strong evidence that Boise is doing well and some insight into why.  The unemployment rate is almost 10 percent lower in Boise than in the rest of the country, while the labor-force participation rate is slightly higher and the average age of the population is almost 10 percent younger.  In addition, the percentages of persons employed in professional, scientific and management and administrative occupations and in public administration are both about 13 percent higher than the national average.  Because the local economy is doing well, the number of vacant housing units, be they owner-occupied units or rental units, is 33 percent lower than what it is for the nation as a whole and the percentage of owner-occupied units stands at 68.2% versus 65.4% for the nation.         

According to Pat Minegar, President of A-1 Heating and Air Conditioning, “Boise is doing better because residents from high tax states like California, Oregon and Washington are moving here to save money and because this is a great place to raise kids.  In addition, existing homeowners are again investing in their homes and that helping put a floor under prices.“  Whatever the cause, house prices are definitely on the mend.  Prices are up 2.4% since the trough in May 2011 and are expected to continue rising going forward.      

Improving economic conditions have resulted in payroll employment being down just 6.8% from its peak in March 2007, and up by 2.5% since the trough in June 2010.  Single family permitting activity is up 3.7% on a seasonally adjusted monthly average basis from the trough set in March 2009.  While new homes are being built in many parts of the Boise MSA, activity is now primarily centered in the Cities of Eagle, East Boise and Meridian all of which are in Ada County.

Improving Markets Index: Evansville, IN-KY MSA

NAHB recently unveiled an index that tracks housing markets on the mend, the NAHB/First American Improving Markets Index (IMI).  The IMI is intended to draw attention to the fact that housing markets are local and that there are metropolitan areas where economic recovery is underway.  The index measures three readily available monthly data series that are independently collected and are indicative of improving economic health.  The three are employment, house prices and single family housing permit growth.

For the seventh release 101 markets are currently classified as improving under a conservative examination of local economic and housing market conditions.  Among these areas is the Evansville, Indiana-Kentucky metropolitan statistical area (MSA).

The health of the Evansville housing market is due to its diversified economy and its being the healthcare, industrial, retail, and transportation center for the tri-state region of Indiana, Illinois and Kentucky.   In addition, Evansville also benefits substantially from the presence of the University of Southern Indiana and the University of Evansville.  Finally, Evansville is also a major manufacturing center with large regional facilities of Toyota Motor Corporation, Bristol Myers Squibb, ALCOA and a number of plastics operations.   

According to home builder Kenny Reinbrecht, Owner of Reinbrecht Homes, Inc. “the combination of a pick-up in manufacturing activity, the continued expansion of healthcare, and people generally feeling more secure in their jobs is causing people to buy a house rather than continuing to wait.”  He went on to say that “there is activity both at the low end of the market and at the high end and that some retirees are now looking to move here and that is also helping the housing market.”        

Comparing 2010 American Community Survey data for Evansville to the US offers strong evidence that Evansville is doing well and some insight into why.  The unemployment rate is almost two percentage points lower in Evansville than in the rest of the country, and the percentages of persons employed in production, transportation and material moving occupations and in manufacturing are 39 percent and 88 percent higher respectively than the national average.  Also, the percentage of government workers is about half the national average.  Because the local economy is doing well, the number of vacant housing units, be they owner-occupied units or rental units, is 21 percent lower than what it is for the nation as a whole and the percentage of owner-occupied units stands at 71.5% versus 65.4% for the nation.         

According to Sean Miller, Corporate Sales Manager of Benthall Brothers, Inc., “Evansville missed the real estate run-up and is thus not suffering the aftermath.  As a result house prices have not fallen much and therefore few have lost money on their home.  In part it is because inventories are low and banks did not lend.“  Whatever the cause, house prices have held up well over the past few years.  Prices are up 2.1% since the trough in April 2011 and are just 5.4% off their high set in June 2007.      

Improving economic conditions have resulted in payroll employment being down just 1.5% from where it was in January 2008, the start of the recession, and up by 4.6% since the trough in July 2009.  Single family permitting activity is up 1.9% on a seasonally adjusted monthly average basis from the trough set in March 2009.  While new homes are being built in many parts of the Evansville MSA, activity is now primarily centered in Vanderburgh County with some construction also taking place in Warrick County.

Improving Markets Index: Rochester, NY MSA

NAHB recently unveiled an index that tracks housing markets on the mend, the NAHB/First American Improving Markets Index (IMI).  The IMI is intended to draw attention to the fact that housing markets are local and that there are metropolitan areas where economic recovery is underway.  The index measures three readily available monthly data series that are independently collected and are indicative of improving economic health.  The three are employment, house prices and single family housing permit growth.

For the seventh release 101 markets are currently classified as improving under a conservative examination of local economic and housing market conditions.  Among these areas is the Rochester, NY metropolitan statistical area (MSA).

The health of the Rochester housing market is due to its highly skilled workforce and diversified economy.  Rochester is not only a large regional healthcare center but also benefits substantially from the presence of the University of Rochester and the Rochester Institute of technology.  Moreover, because of the substantial amount of local imaging and optical research, many start-up firms in those areas deliberately choose to locate here.  Finally, Rochester is the headquarters of expanding regional and national firms like Wegman’s Food Markets and Paychex. 

According to home builder David Riedman, President of Riedman Development Corporation, “new high-tech firms are what makes Rochester special.  High paying jobs in lasers, lenses, wireless communications, nanoparticles and more is what has allowed us to do surprisingly well.”  He went on to say that “executives and senior managers are moving their families here and more often than not these households not only want nice housing but because of the dearth of inventory that means new housing.”        

Comparing 2010 American Community Survey data for Rochester to the US offers strong evidence that Rochester is doing well and some insight into why.  The unemployment rate is about 2.5 percentage point lower in Rochester than in the rest of the country, and the percentage of persons employed in manufacturing and in educational and healthcare services are 35 percent and 33 percent higher respectively than the national average.  Because the local economy is doing well, the number of vacant housing units, be they owner-occupied units or rental units, is 30 percent lower than what it is for the nation as a whole and the percentage of owner-occupied units stands at 68.5% versus 65.4% for the entire country.  Lastly, the percentage of persons with a bachelor’s degree or higher is about 20 percent higher in Rochester than it is for the rest of the US.  Part of the reason for this is that the percentage of the population with a graduate or professional degree is almost 40% higher in Rochester than it is nationally.      

According to Scott Fields, President of Matthews and Fields Lumber Company, “our house prices never rose like they did in many places and thus have not fallen either and as a result, few have lost money on their home.   In part it is because there was little if any increase in spec building back on ’04, ’05 and ’06 and in part it’s due to Yankee frugality.“  Whatever the cause, house prices have held up well over the past few years.  Prices are up 4.7% since the trough in March 2011 and have now surpassed the previous high set in August 2009.      

Improving economic conditions have resulted in payroll employment being down just 0.5% from its 10-year high in July 2008 and up by 3.3% since the trough in September 2009.  Single family permitting activity is up 2.7% on a seasonally adjusted monthly average basis from the trough set in March 2011.  While new homes are being built in many parts of the Rochester MSA, activity has been primarily centered in the towns of Greece, Henrietta, and Penfield in Monroe County as well as southeast of Rochester in the Town of Farmington and the Town of Victor, both of which are in Ontario County.  There has also been a small but noticeable pick-up in multifamily activity in downtown Rochester.