"While home price appreciation remains elevated in Miami so far, longer term downside risks could be growing if such exodus trends are sustained," Zhou wrote. But over the last two quarters, Zhou noted, former residents have been leaving the city in droves, perhaps partly due to high costs of living. Miami, however, was a success story in the last few years, as the population skyrocketed after the pandemic. Louis and Detroit have dropped dramatically since 2008. Louis, Detroit, and Miami, all of which fall squarely in the "cold" quadrant due to high housing supply but outgoing populations. On the opposite end of the spectrum are cities like St. In addition, smaller construction businesses in San Antonio, Dallas, and Houston are all spending more than the national average, indicating housing will be coming online in these red-hot markets over the next few years. "According to BofA Global Research, new multifamily completions are set to hit a record high in 2Q24, as COVID related delays are finally resolved." "Looking at the potential number of units coming through the pipeline, all four cities saw higher-than-average permits issued per capita during the first five months of 2023, with Houston leading," Zhou wrote. Luckily, there does appear to be some relief ahead. Compared to June 2019, home prices in Orlando are up 58%, while prices in Dallas are up 49%. Unsurprisingly, the combination of rising population and low housing supply has only caused the price of homes in these markets to increase over the last few years. "This compares with the 4% increase in total nonfarm payrolls on a national level." "For example, as of June 2023, the seasonally adjusted total nonfarm payroll was 14% higher than its January 2019 level in Dallas, and 10% higher in Orlando," Zhou wrote. The reason behind the population influx in these cities, Zhou wrote, was their hotter-than-average labor markets. Zhou highlighted San Antonio, Dallas, Orlando, and Houston as among the "hot" cities experiencing high population growth coupled with low housing supply. Cities in the bottom-left quadrant are in the "cool" group, with low housing supply and a declining population.įinally, cities in the upper-left quadrant identified in red have high housing supply but a declining population, putting them in the "cold" group. For instance, the bottom-right quadrant that includes cities in green is the "hot" group, where there's low housing supply combined with an increasing population.Ĭities in the upper-right quadrant, such as Tampa and Jacksonville, are in the "warm" group - meaning they have high housing supply as well as population growth. Zhou categorized each quadrant based on the housing trends she identified. To better understand the results, Zhou created the chart below, dividing it into quadrants based on housing units compared to the population ratio across the US. Finally, she compared this ratio to Bank of America data about year-over-year population changes in these cities as of the second quarter of 2023. Then, she calculated the ratio of housing units to the local population at that time. In order to better analyze today's housing market, Zhou utilized Census Bureau data from 2022, calculating total housing units county-by-county in metropolitan statistical areas, or MSAs - in other words, cities. 4 cities with hot labor markets and constrained housing supply That's why Zhou decided to take a closer look at local housing supply in conjunction with Bank of America data to get a clearer picture of where the US housing market stands today - and which cities have the lowest number of homes available right now. For instance, months' supply only accounts for active listings and pending sales, and not the total number of houses available, she wrote. Housing supply across the US measured a mere 3.1 months in June, according to the National Association of Realtors, well below the 2015-2019 average of 4.2, Zhou wrote.īut this data isn't perfect, Zhou added. This common calculation of housing availability tallies the number of months it will take for housing inventory in a market to run out if sales remain steady. Homes are hard to come by these days, and Bank of America has the data to prove it.Īnna Zhou, an economist at the Bank of America Institute, said in a recent report that housing supply is unusually constrained right now, as measured by months' supply.
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