Houston is by far the largest single family housing market, accounting for 7% of all US housing permits in February, about as many as Dallas and Atlanta combined. Dallas, Austin and San Antonio are also among the top twenty Metro areas. Los Angeles, San Francisco and Miami have dropped off the list. Washington has moved up to #5 in housing starts over the last year, #3 over the last few months. The nations’ capitol will climb closer to Houston in the next few months. The New York economy is weakening with the securities market. The energy boom is no longer boosting the Houston economy. But tens of thousands of added government employees are soon to be hired in Washington.

Housing development continues to be most rapid in Texas, the Carolinas and along the gulf Coast. But permit activity has declined to about 5% of the 2005-06 peak level in the southwest, southeast and industrial Midwest.

Houston and Dallas 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.

No large cities remain on the list of Metros with more residential construction now than at the peak of 2004-06 housing boom. This shortened list includes two hurricane rebuilding cities and eight small cities which hit the hot list this month due to a boost in local college, military or energy spending.

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 the Texas cities, the other hard hit markets have experienced price declines that are causing a postponement in home purchases. Southwest Florida , California 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.

San Jose, Houston, Houston and Washington have experienced the least decline in permits from the peak early in 2006. The 42% fall in San Jose is because this market missed the 2004-06 housing boom while it was still recovering from the previous recession where it was at the epicenter. Boston’s small 51% decline is due both to the recent strength of its large software and bio-technology industries and its decline in home price before the rest of the country. Houston has been boosted by a strong energy industry and the influx of people from New Orleans. Washington has few jobs in the troubled auto and financial industries and has been sustained by rising federal employment.

For more information, please see US Metro Housing Markets – February 2009 – Cities 1-100.