Sixteen of the twenty cities with the most housing development relative to their size are in the southeast, excluding Florida. This includes the rapidly growing resort and retirement centers along the Carolina coast, the manufacturing and business centers in the Carolina piedmont area and the hurricane rebuilding region on the Gulf Coast, including Houston.

Houston is by far the largest single family housing market. Dallas, Atlanta and Phoenix have fallen well behind. Houston largely escaped the rapid run up in home prices earlier in the decade because of its builder friendly zoning and permitting practices. Houston homeowners have relatively few problems now with adjustable mortgage rate resets and plunging home prices. New homes for New Orleans refugees and the booming energy industry are also contributing significantly to strong home demand.

Dallas and Houston trail only New York City on the list of top multi-family markets. Multi-family permits have nearly doubled since 2005 in contrast to 50-70% declines in 2005’s hottest condo and apartment markets. New York City is still the top market even without the extra 15000-16,000 June permits to beat an adverse rule change. NYC permits will be declining with the deeper cutbacks expected soon in the city’s financial markets. Permits are up from a year ago in many college and oil patch towns that escaped both the 2005-06 housing boom and the worst of the ongoing economic recession.

New York City is the only large metro areas with a growing housing market but the ongoing downsizing of the financial industry will quickly bring this surge to an end. New York City issued 15,000-16,000 “extra” permits in June to developers who filed early before adverse rule changes took effect. The New York City multi-family market should be seen as steady at a high level. Hattiesburg and Gulfport-Biloxi are still replacing homes lost to Katrina.

Each of the smaller cities on the list has a unique source of job and income growth. Many are college town with more stable jobs or oil towns with rising energy industry employment.

Atlanta leads the list of cities with the largest drop in housing permits from the peak in the housing boom two years ago. Excessive inventory is a bigger problem than declining home prices. Excepting Dallas and Houston, the other hard hit markets have experienced price declines that are causing a postponement in home purchases. Southwest Florida and Las Vegas/Phoenix will be the last markets to recover because the collapse of the local housing markets has led to significant local economic recessions.

For more information, please see US Metro Housing Markets – July 2008 – Cities 1-100.