If there is good news to be gleamed from the nation’s housing news, it would have to be the Sunbelt that gets the nod. The Census Bureau reported this week that the sunny South reaped eight out of 10 of the nation’s largest population gainers. To those of us who look for good news wherever it can be found, it should follow that population growth lends some strength to the housing market, be it ever so humble.
Dallas-Fort Worth topped the charts as the metropolitan area showing the largest population growth in the country for July, 2006-July ‘07 according to U.S. Census Bureau statistics. Dallas-Fort Worth, the nation’s fourth largest metro area, added 162,250 to its population topping 6.1 million residents.
The D-FW region was one of four metro areas in Texas that ranked among the nation's top 10 population gainers in 2006-07, including Houston, Austin and San Antonio. Experts credit that to the state's relative economic strength. "The past couple of years in Texas have been similar to the energy boom in the late '70s and early '80s because of our economic strength relative to the rest of the country," said Fiona Sigalla, an economist at the Dallas Federal Reserve.
Many argue that the Dallas-Fort Worth real estate market was “late to a bad party” and that while it did not experience the same run-up exuberance in home price appreciation, it will likely not suffer from the same price declines as experienced in many other markets.
Meanwhile, Detroit declined by more than 27,300 to fall out of the top 10 largest metropolitan areas and was passed by Atlanta at No. 9.
The Atlanta metro area pulled into second place in population growth, a close second behind Dallas with an increase of 151,063 residents in the 28-county area. In the last seven years the Atlanta region added more than one million people to its ranks – more than any other region in the country. Atlanta’s population is now 5,278,904.
"The Atlanta area is viewed as a place of opportunity," said Mike Alexander, research division chief of the Atlanta Regional Commission. “People move here from California, New York and the Midwest for job prospects, promotions or to start their own businesses.” Metro Atlanta experienced a net growth of 55,000 jobs last year.
Atlanta as the "Land of Opportunity" is further supported by a recent survey of the cheapest areas in which to conduct business in the U.S. Runners up were Tampa and the Dallas-fort Worth areas.
Census projections show Georgia could gain about 4 million people by the year 2030.
The census bureau data mirrors the housing sector numbers showing the most strength in the housing markets across the sunbelt – or at least it mirrors the areas less devastated by the effects of the housing slump.
The Commerce Department reported yesterday that new home sales dropped 1.8 percent in February to a seasonally adjusted annual rate of 590,000 units, the slowest sales pace since February 1995. The median price of a home sold last month dropped to $244,100, down 2.7 percent from the level of a year ago.
Both the annual sales rate and the year-over-year decline, however, were up from January, when the rate fell to 588,000 and the decline from the previous January was 33.9%.
The numbers however trended up for February as compared to January data. The median sales price of new houses sold in February rose significantly, to $244,100, up from $216,000 in January. The average price was $296,400, up from $276,600 in January.
Although the new home sales numbers were up causing a surge in home builder stock prices early this week, the sales price was continuing to decline. This would seem to indicate that the market viewed the decreasing new home inventory as a positive move despite declining prices.
However the overall unsold number of homes on the market at the end of the month represented a 9.8 month supply at the February sales pace, the same as in January. Representing a 26-year high, the inventory level indicates an increased number of foreclosures are dumping more homes on a glutted market even while new home inventory is being reduced.
Again, the brightest area for hope comes from the sunny South where sales gains were posted to the positive by 5.7 percent. Sales dropped the most in the Northeast, falling by 40.6 percent. Sales were also down in the Midwest, dropping by 6.4 percent. The west gained a modest 0.7 percent with the strong northwest markets such as Seattle offsetting struggling markets in southern California.