The gap between distressed and growing housing markets continues to widen as housing permits fell marginally in November, 2007 to a level 48% below the January, 2006 peak of the housing boom. Permits are now higher, averaged over the last three months, in 97 of 360 metro areas than at the peak of the housing boom in late 2005 to early 2006. However, these 97 housing markets are mostly small and account for only 12% of the nation’s total metro population.

The gap is likely to widen further well into 2008 based on the latest regional trends in home prices. Double-digit price declines from a year ago in California, Florida, Arizona, Nevada and Michigan have all but shut down new home construction in those states.

By contrast, home prices are up from a year ago in Seattle, Charlotte and Portland and are off less than 5% in Boston, New York, Dallas, Cleveland, Denver, Atlanta and Chicago. Permits are off only 3% in Seattle and 12% in Charlotte and are expected to rise above the late 2005/early 2006 level by mid-2008.

The Carolinas lead in Housing Intensity
Five of the ten housing markets with the most intense development (i.e., permits per thousand population) are currently in North Carolina. In addition, Myrtle Beach, South Carolina is at the top of the list.

Florida and California beach resorts have dropped off the Top 10 list, under pressure from a massive overhang of unsold inventory. The list also includes Las Vegas (in 8th place) where vacation condos continue to be built for people who live elsewhere, and Austin (10th spot) which is currently being boosted by the strong technology market.

The bottom of the list is still dominated by yesterday’s manufacturing centers that have not been able to attract today’s high-growth and intellectual-capital industries.

For more information, please see Houston the Current Hot Spot for Housing; Riverside and Miami take Hardest Hits.