A recent TD Economics report speaks to housing market pricing as a local indicator and how price momentum can vary from market to market. The report also points out that some American states experiencing strong job growth and healthy foreign demand and that in addition to house prices, these two indicators are huge signs of recovery. That’s good news for a housing industry that has really been through tough times lately.
TD lists the top states showing a rebound in house prices and they might surprise you. Mentioned up top are Texas, Florida and Arizona. Florida and Arizona are vacation destinations, so it’s foreign demand that is driving the market there and Canadians represent the largest group of buyers. Reportedly, Florida also has the highest foreclosure inventory in the U.S., followed by New Jersey, so the homes are making their way through the system and onto the market.
If home prices continue to rise, the authors of the report muse that the U.S housing market will begin to see more and more activity. Homes that have been in limbo will finally sell and bargain-hunters will make their move, sending a message of consumer confidence. The only concern is the rate at which the homes come onto the market. It’s a tricky balance because too many could affect price growth.
In Canada, we have weathered the recent economic uncertainty around the globe very well. The housing market, especially in the GTA, has been robust and an integral part of the local and national economic engine creating more than 193,000 jobs in new home construction last year.
To meet demographic demand, our industry builds about 40,000 homes every year in the GTA. So far in the first half of 2012, we have more than 23,000 homes under construction. These are newly-constructed homes that would’ve been purchased by the homeowners a few years ago. It can take an average of two to four years for a project to go from the sales office to construction because the plans have to be finalized and approved.
As our industry works to meet the housing demand of our growing population here in the GTA, which is significant, it’s encouraging to hear news of recovery south of the border — even if it’s early days.
In parts of the U.S. that have seen job growth, there has also been an increased demand for housing. Texas is one of the top states showing job growth and over the last year has ranked in the top 10 for home price growth.
As the job prospects improve south of the border, so will consumer confidence and domestic demand from new and first-time homebuyers, growing families and aging homeowners for a variety of housing options.
– Bryan Tuckey is President and CEO of the Building Industry and Land Development Association (BILD) and can be found on Twitter (twitter.com/bildgta), Facebook (facebook.com/bildgta), Youtube (youtube.com/bildgta) and BILD’s official online blog (bildblogs.ca).