We start off 2011 with a data feature that examines the trends of Attached New Homes on a market-by-market basis, courtesy of Housing IntelligencePro.  We took MSAs that had at least 500 Attached New Home Closings in the first 10 motnhs of 2010, and came up with a list of 26 markets.  Of the market areas considered, 14 saw gains in Attached New Home Closing share over the 2005-2010 period, while 12 saw declines.  Cape Coral-Ft Myers saw the largest gain, moving from 26% Attached New Closings share in 2005 to 45% in 2010.  Meanwhile, the struggling San Diego housing market moved off its vertical for-sale development path and saw attached new home closings decline to 37% of all new home closings in 2010, a substantial fall from 65% in 2005.  Seven of the 26 market areas had Attached Closings in 2010 that captured the majority of all New Home transactions, compared to 6 in 2005 (4 of them are the same markets).  Of these, San Jose currently has the largest majority share of Attached New Home Closings with 72%, followed by Chicago with 59%.

Construction activity picked up moderately in November but remains tame by historical standards as the economy battles through a recovery.  Housing starts were still noticeably lower than they were this time last year but year-ago figures were boosted by the federal homebuyer tax credit.  Building permit activity also declined which suggests that construction activity may soften in the months ahead.  Rising mortgage rates, sluggish housing activity, and weak economic growth kept builder confidence unchanged in December as most try to decipher what the next move will be in these uncertain times.

After the release of national employment data last week, we began to delve a little deeper and look at employment on a local level since the labor market, much like the housing market, is very much local.    What we found was that the top-three metropolitan areas in the U.S. with the lowest unemployment rates were all in North Dakota.  Bismarck recorded an unemployment rate of 2.7% in October while the unemployment rates for both Fargo and Grand Forks stood at 3.2%.  With such healthy labor market conditions, it should come as no surprise that housing in these areas is also holding up quite well.  According to data from Housing IntelligencePro, total home closings year-to-date are up 5% from year-ago levels for all three metro areas combined.  Bismarck was by far the leading-performer with closings up over 27% in 2010 compared to the same nine months last year.  Median home prices in the third quarter are also up over 6% from the same period last year for the three combined regions.  It is further indication that the housing market does not exist in a vacuum; it requires a solid economy and especially a healthy job market.

Markets where REO sales are the majority of all home transactions form the basis for this week’s data feature, courtesy of Housing IntelligencePro.  A few years ago suggesting such a notion would have likely prompted suggestions to visit to the local mental health clinic.  But several years of a depressed housing market and millions of foreclosures have made the scenario a reality for these eight MSAs in the 3rd Quarter.  If there is a silver lining at least it means these distressed properties are moving their way through the system and back into the market, although with the more recent difficulties related to foreclosures we could see that process slow down. 

With the surge in distressed real estate sales over the past couple of years, new homes have made up a smaller portion of overall housing activity.  Based on data from Housing IntelligencePro, the proportion of new home sales declined to 9.5% of total home sales in the third quarter of this year compared to 10.5% during the same period a year ago.  However, there were some areas across the country that did experience an increase in new home activity.  Our data feature of the week focuses on places with the largest share of new home sales as a portion of the overall market, with a minimum of 1,000 closings during the quarter.  The results show that the Carolinas stick out.  Fayetteville, NC had the highest number of new home sales as a percentage of the overall market.  Over 32% of all the homes closed in the third quarter were in the new homes segment which is up about 31% during the third quarter of last year.  The fourth and ninth highest concentrated markets, Huntsville, AL and Charlotte, NC, both also experienced an increase in new home activity compared to year-ago levels.  Ten out of the top-17 areas across the U.S. with the highest concentration of new home sales activity were in the Carolinas.