10. San Antonio, TX
Market Health Indicator: 75.6
2011 Building Permit Forecast: 8,002
Percent Change in Building Permits: 23%
San Antonio, the seventh largest city in the nation, has enjoyed one of the most stable housing markets during the boom and bust of the last decade. The median price of an existing home--about $150,000 last year, and expected to remain at about the same level for the next two years--has barely budged as many markets elsewhere gyrated wildly.
Strong employment growth (1.84% last year), coupled with inexpensive housing, is the secret to the city's success. The region's unemployment rate, 7.3% in December, is one of the lowest in the country. Despite being home to numerous military bases, including Fort Sam Houston and Lackland Air Force Base, San Antonio now enjoys a diverse employment base of financial service, health care, tourism, and other businesses.
Steady household growth (2.37%) is expected to continue this year, and median incomes are projected to rise another 2.33% to $50,000. Despite its size, San Antonio doesn't even make the list of the top 100 metro areas affected by the foreclosure crisis. Permits, which reached as high as 22,000 in 2005, stood at 6,500 last year and are expected to grow by nearly one-quarter this year.
Visit our Local Markets page for San Antonio to see more data and analysis.
9. Naples-Marco Island, FL
Market Health Indicator: 75.8
2011 Building Permit Forecast: 2,504
Percent Change in Building Permits: 108%
Naples is outperforming the rest of Florida, despite a median home price ($330,000 at the end of the year) that is among the highest in the Southeast. Existing home prices reached as high as $515,000 during the housing boom. The metro area, which is heavily dependent on tourism, also has a persistently high rate of unemployment--12.8%.
Where is the strength coming from? Part of it stems from the sheer desirability of living in this resort town, renowned for its high-end shopping, restaurants, and placid beaches. The population is still growing; it rose 2.6% last year to 329,000. And tourism rebounded strongly late last year, according to the local tourist bureau.
The new construction market in Naples seems to have emerged from recession, after nearly shutting down from 2008 to 2009. Building permit levels doubled last year and are expected to do the same in 2011. Even so, Moody's is predicting another 19% decline in median home prices as the region continues to work through a high rate of foreclosures--14th in the country last year, according to RealtyTrac.
Visit our Local Markets page for Naples to see more data and analysis.
8. Charlotte-Gastonia-Concord, NC-SC
Market Health Indicator: 76.6
2011 Building Permit Forecast: 9,494
Percent Change in Building Permits: 65%
The Charlotte market may have hit bottom last year. Builders pulled only 5,750 permits (permit levels got as high as 25,000 in 2006). Moody's Economy.com is calling for major increases during the next two years, including a 65% rise in 2011.
Charlotte is another one of those golden markets where home prices never got out of hand. The median price of an existing home only rose as high as $204,000 at the peak of the market in 2007. As 2010 closed, it was still at about $190,000 and expected to stay in that general vicinity through 2012.
Strong household formation, even during the economic recession, is the secret to Charlotte's success. Households are projected to rise another 2.4% this year. The area is projected to add enough jobs to keep up with population growth, but little more. Though Charlotte suffers from above-average unemployment, foreclosures remain relatively low.
Visit our Local Markets page for Charlotte to see more data and analysis.
7. Houston-Sugar Land-Baytown, TX
Market Health Indicator: 77.3
2011 Building Permit Forecast: 34,763
Percent Change in Building Permits: 30%
Hear this--things are looking up in Houston. Home prices have stabilized. Employment will grow by a robust 2.66% this year, and cut the unemployment rate by nearly half a percent. Median incomes will rise strongly, by 3.33%. And building permit activity will increase by nearly a third.
Houstonians make good money. The median income here, $56,500, is about $10,000 above per capita income for the state. More than 3,000 energy-related firms are located in the MSA, the center of business for the U.S. oil and natural gas industries.
Houston showed 35,800 foreclosure filings last year, according to RealtyTrac, one out of 62 households. That may lead to a small decrease in median existing home prices which crept up to $153,000 last year. Even so, that's about where they were in 2007, at the height of the market.
Houston is a huge market for new homes, one of the biggest in the nation, even though last year it produced only about a third of the 71,000 permits pulled in 2006. The large volume of activity here has attracted more than one national builder during the downturn.
Visit our Local Markets page for Houston to see more data and analysis.
6. Minneapolis-St. Paul-Bloomington, MN-WI
Market Health Indicator: 77.6
2011 Building Permit Forecast: 9,403
Percent Change in Building Permits: 66%
The Little Apple appears poised for growth. Last year's strong rebound in permit activity--filings were up 22 percent in 2010, led by a surge in multifamily--is expected to accelerate in 2011. If builders actually pull 9,403 permits this year, as Moody's forecasts, that would equal half the volume of 2005.
Foreclosure filings actually fell in Minneapolis last year, though banks still have inventory to work through. Median existing home prices, which stood at about $167,000 at the end of last year, have fallen only 27% from their peak in 2005. The market enjoys decent household growth (1.77% is forecast for 2011) for a Northern city, though most of it comes from natural growth. It still has a hard time attracting residents.
The housing industry in Minneapolis, a major hub for medical technology, is supported by a relatively high median income level among residents. Median incomes reached nearly $66,000 last year, and Moody's expects another 2% increase this year, which would be a marked increase over the pace of the last seven years.
Visit our Local Markets page for Minneapolis to see more data and analysis.