As we approach the end of 2016, numerous reporting outfits and data agencies will draw conclusions about the current and future state of the real estate market. Luxury LA Homes is here to keep you informed of all those findings, from the local and statewide levels to the broad countrywide market trends.
This week saw the release of the National Association of Home Builders/First American Leading Markets Index (LMI). It showed that markets in almost half of the roughly 340 metro areas nationwide have fully recovered from the “Great Recession” of 2008. Meaning by the end of the third quarter of 2016, 162 markets will have “returned to or exceeded” their last pre-recession levels of both economic and housing activity.
That actually represents and impressive gain of 73 metro markets when compared to last year’s results. Looked at from an even broader perspective, the index’s nationwide score, which incorporates all housing data, rural areas included, was up to .98. This means that at current permit, price and employment data, the nationwide average is running at almost 100 percent (98) of “normal economic and housing activity”.
“Ongoing job growth, low mortgage rates and rising incomes are contributing to a firming housing market and economy,” said NAHB Chairman Ed Brady. “Though some areas are recovering faster than others, the overall trend is positive.”
“House prices continue to show the strongest recovery among the LMI components, with 327 markets, or 97 percent, returning to or exceeding their last normal levels. Meanwhile, 92 metros have reached or exceeded normal employment activity,” said NAHB Chief Economist Robert Dietz. “Single-family permits have edged up to 51% of normal activity, but still lag far behind the other gauges of the index.”
“Nearly 80 percent of metro areas posted an increase in their LMI score over the past quarter, while more than nine out of 10 recorded an annual increase,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Company, which co-sponsors the LMI report. “These are strong indicators that the housing recovery remains steadily on an upward trajectory.”
So where is this growth concentrated? In what will come to most as a huge surprise, especially considering New Orleans still majorly distressed local economy, Baton Rouge, La. has a score of 1.68 and once again tops the list of major metros on the LMI. That means Baton Rouge is 68 percent better than its economic and real estate market were at the recession. Other major metros with big gains are Austin, Texas; Honolulu; San Jose, Calif.; and Provo, Utah. Rounding out the top 10 are Spokane, Wash.; Nashville, Tenn.; Houston; Charleston, S.C.; and rounding out the list, our local Los Angeles market.
Among smaller metro and more rural areas, Odessa, Texas, actually has the only LMI scores over 2.0, so Odessa has now doubled its market strength prior to the recession. Also at the top of that group are Midland, Texas; Ithaca, N.Y.; Walla, Walla, Wash.; and Manhattan, Kan.
If you haven’t checked the Luxury LA Homes blog in awhile, please stop by for a visit. Along with this article on the LMI, we’ve been covering the latest nationwide housing data from CoreLogic as well as local Los Angeles real estate numbers and updates.
If you’re interested in buying or selling a Luxury Home in Los Angeles, please contact us now at 323-829-8811 or email Susan Andrews at susan@luxurylahomes.com.
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