The National Association of Home Builders (NAHB) is developing an index of "healing housing markets" in an attempt to offset the negative press that casts a pall over the entire sector whenever national price statistics are released.
Based on job growth, price growth and an increase in building markets, NAHB's Chief Economist David Crowe told ASR sister publication National Mortgage News (NMN), "there are a small number of metro areas" which are doing well despite what other benchmark measures seem to indicate.
Crowe spoke to NMN prior to his presentation at the Southeast Builders Conference in Orlando, where he told a disappointingly small gathering that while the level of housing production nationally had fallen to 27% of "normal" in the first quarter, "many places didn't sink nearly as far."
"Everything isn't bad everywhere," the NAHB economist told the meeting. "There are places which are improving, that are doing well."
A major problem with national indices is that the stronger markets don't account for a lot of production, Crowe explained, noting that half-dozen states hit hardest by the downturn – Florida, California, Nevada, Illinois, Ohio and Minnesota – typically account for half of all housing starts.
"States are curing on a basis of how far they fell," he said. "States in the worst shape will be the slowest to come out of the recession, while those not harmed as much are going to grow out faster."
In his talk, the economist mentioned several healing markets where employment growth is above trend, house prices are rising and production is on the upswing. A few – Odessa and Midland, Texas, for example, Bismark, N.D., and Pittsfield, Mass. – even show up on more than one of those three lists.
Crowe told NMN that the new index will be based on independent data so his group cannot stand accused of cooking the numbers.