National Housing Market Outlook

Huge Geographic Differences

John Burns photo

John Burns

August 1, 2013

The US housing market can no longer be painted with one brush, as the housing recovery is playing out very differently across the country. Here are some anecdotes gleaned from our consulting team:

Florida on sale to the world.
Investors, investors, and investors. From Russia to China to the UK to Brazil, Florida is attracting investors from all over the world. Domestically, the institutional single-family renters are competing with local flippers, too. Good finished lots are now at peak prices in several markets. The active adult/retiree markets continue to experience strong growth. Contact Lesley Deutch for more info.

North Carolina slows after surge.
After a strong Spring housing surge, growing builder competition and a lack of fundamental economic growth are tempering local housing market recoveries. Dwindling lot supplies have also put pressure on builders to get ahead of the pipeline and self-develop communities to maintain volumes.

DC moving South and West.
New home sales have remained fairly steady since the March 1 start of sequestration. The sequestration impact has been less than expected with buyers still purchasing homes but choosing smaller units or spending less on options and upgrades. Entry-level builders in particular are working closely with buyers who think they may be impacted by budget cuts. Land inventories in the Washington, DC metro area are limited, and the market is expanding southward and westward.Contact Ken Perlman for more info.

Texas economy is growing big!
Entry-level buyers are struggling more here than other places, but that is always the case in Texas. The strongest economies in the country just seem to keep getting stronger, with a notable increase in license plates from other states. The continued economic growth and relocation demand has pushed land, lot and home prices to all-time highs. Apartment construction is booming. Houston is now the largest housing market in the country. In Austin, finished lots in A markets such as Cedar Park and west Austin are becoming more challenging to find, and residential development is migrating northward and westward into regions that had historically been considered B submarkets.

Midwest coming back to life.
Once the Midwest thawed out in April, the housing market thawed out as well. Job growth continues to improve, as do sale volumes. Pricing improvement is right around the corner. Builders in both Minneapolis and Chicago are now running out of desirable lots and are seeking viable development opportunities.

Phoenix temperature cooling.
The white-hot land market in Phoenix may be cooling off. Homebuilders in the A markets are pausing to carefully consider land prices, after 12 months of rapidly escalating prices. Builders are still pursuing deals but are mindful of the impact of rising mortgage rates and price increases on price sensitive buyers. With temperatures over 100 degrees, it is tough to ascertain true demand in Phoenix right now. Contact Don Walker for more info.

Vegas showing some rate sensitivity.
With most of the land around Vegas owned by the government, Las Vegas land supplies remain limited, and builders continue to search for finished lots. Prices for land continue to rise with public homebuilders dominating the Las Vegas market and aggressively bidding on residential land. In the last few weeks, we are starting to see a little pullback with rising cancellations. Contact Ken Perlman for more info.

Georgia joins the recovery.
The Atlanta housing recovery has officially begun this year, as soaring demand continues in the popular Golden Triangle of North Atlanta. Supply constraints in the north are driving up lot values, especially as the market begins to shift from distressed lot transactions in exurban sprawls to new development within core A and B submarkets. Foreclosure buyers have been big contributors to the recovery.

Northern California in sticker shock.
New home prices may have risen too much in the Bay Area, where consumers have pulled back due to sticker shock. While sales are still strong and price increases still common, rising mortgage rates and the remarkable appreciation of the last year-plus has left many potential buyers behind. Though the most desirable new home communities can simply move down their interest list with each new release, a general slowdown in appreciation is inevitable. See Dean Wehrli for more info.

Riverside is again driven by coastal pricing.
Rapidly rising prices in Coastal Southern California markets are pushing more buyers back into the more affordable inland markets of Riverside and San Bernardino Counties, where sales are surging. Sales rates of 6 to 8 sales per project per month are common in A markets like Corona and Eastvale. Land prices are skyrocketing in the close-in markets, rising over 25% in just the last six months. See Pete Reeb for more info.

Orange County supply is rising.
The birthplace of large-scale small-lot masterplans is exploding, with a plethora of new home communities recently opening. Sales are strong and driven by a significant number of foreign buyers who are moving in.

Seattle expands outward.
Homebuilding is pushing out of King County. New home and lot prices in South Snohomish have soared over the last 12 months, and homebuilders are showing an increased appetite for land south of Seattle in Pierce County. As evidence, consider that Tehaleh in Bonney Lake, by Newland Communities, is now the best-selling masterplan in the metro area. See Ken Perlman for more info.

Building Market Intelligence™

Every week, we deliver analysis to over 40,000 subscribers with our Building Market Intelligence™ newsletter. Subscribe to our weekly BMI newsletters to stay current on pressing topics in the housing industry.

About The Author

John Burns photo
John Burns
Chief Executive Officer
As CEO, John grows, leads, and supports a team of passionate, articulate, likable, and smart experts. Together, we solve today so our clients can navigate to tomorrow.

Contact Us

If you have any questions about our services or if you would like to speak to one of our experts about we can help your business, please contact Client Relations at

Products and Services Mentioned

green check icon

Research Membership

Our research services enable our clients to gauge housing market conditions and better align their business and strategic investments in the housing industry. We provide a thoughtful and unique holistic approach of both quantitative and qualitative analysis to help clients make informed housing investment decisions.
green check icon

Geographic Overview of the Public Home Builders

A package designed for those who compare the publicly-traded builders to each other, including securities investors and the builders. Each month we rank each of the publicly traded home builders based on the recent, past, current, and forecasted future performance of their geographic footprint.
green check icon

Building Products Consulting

Our building products team is comprised of industry experts with diverse sector and functional experience. We partner across organizations to provide custom consulting reports to aid organic and inorganic investment decisions, strategic planning, and marketing.

Latest Insights

NHTI Industry Pulse: $40K for a Gym Membership?
Dear Consultant: Can people still afford homes with high rates and increased inflation, or are they more likely to rent? 
Hillwood Communities and the Art and Science of Placemaking