The Most Intense U.S. Metro Housing Markets (Starts per 1,000 Population)
The most intense housing development in the United States is now occurring in 10 small resort cites, eight inexpensive southeastern cities (which are attracting jobs away from more expensive cities) and two Texas oil centers. The composition of this list is not likely to change significantly for many months. A few years ahead, when home prices fall to a more normal relationship with income, intense housing development will likely resume in Florida and southwestern resort/retirement centers. The sun has not stopped shining in those cities.

Largest Single-family Markets
Las Vegas and Orlando are the only resort cities that remain on the largest single-family starts list, probably because of their relatively large share of foreign buyers. U.S. home prices will be a bargain for Asian, Latin American and European buyers for several more years. However, expect the rapid growth in foreign demand for U.S. homes to slow by year end. The value of the U.S. dollar will begin rising this summer after a five-year decline. Foreign economic growth and income gains have already begun to slow, but will remain far above the depressed level in the U.S. through 2009.

Largest Multi-family Markets
The twenty metros with the largest multi-family starts account for 60% of the total U.S. multi-family housing market. New York City, Houston and Chicago — together accounting for 22% of the total U.S. market — are among the strongest large-city housing markets. This has permitted multi-family construction to avoid the deep cuts that occurred in the single-family market. Now the strong, steady demand for multi-family housing in New York City is at risk due to the accelerating layoffs at financial industry firms.

Largest Increases in Housing Permits
Buffalo and New Orleans are the only large cities with more housing permits issued in the last three months than at the peak of housing boom in late 2005/early 2006. The improvement in New Orleans moved the intensity of development in the housing market temporarily from average to average plus. In Buffalo, the housing market has improved from very depressed to depressed. The other small cities have expanding housing markets due to unique local circumstances — typically hiring by a major local employer or price increases for a dominant local commodity export.

Largest Declines in Housing Permits
The cities on the list of largest declines in permits have changed very little in recent months. These are the cities most overbuilt during the 2005-2006 housing boom. Each of them had too many speculative and subprime-financed starter homes. Each had an outsize rise in prices that is now causing outmigration to less expensive cities. Seven of the 20 cities are in Florida where overbuilding was most pronounced. The four largest metro areas in the Tampa Bay area are all on the list.