IE 11 is not supported. For an optimal experience visit our site on another browser.

33 metro areas where builders are confident

Housing starts are showing early signs of a turnaround in 33 metro areas, according to the Adversity Index data from and . Bill Dedman of reports.
/ Source:

Housing starts are showing early signs of a turnaround in 33 of the nation's metro areas, according to the Adversity Index data from and Moody's Analytics.

While housing construction nationally recovered somewhat in May, it's still 45 percent below the level of a year earlier, as the Commerce Department reported this week.

But looking at particular metro areas, the Adversity Index identified 33 where builders are obtaining more permits to start homes than they had a year earlier.

Leading the list is the metro area of Vallejo, Calif., where housing starts are up 440 percent from a year earlier, comparing the three-month periods ending April 2009 and April 2008. In Longview, Texas, they're up 263 percent. Others atop the list are Lawrence, Kan.; Ann Arbor, Mich.; Kokomo, Ind.; and Clarksville, Tennessee-Kentucky. (The full list is below.)

"Housing starts is the one thing that has improved slightly over the past two months," said economist Andrew Gledhill of Moody's Analytics. "There are signs out there that builders are growing modestly more confident about their prospects. The National Association of Home Builders survey of market sentiment has supported this; builders are pessimistic, but less so than at the start of this year."

Signs of hope
Each month, Moody's Analytics and use data on employment, industrial production, housing starts and house prices to label each state or metro area as: expanding, at risk of recession, in recession or recovering.

Overall, the recession continued to spread in April. The Adversity Index shows that the recession reached every state, and all but four of the nation's 381 metro areas. The last holdout among the states was Alaska, which, along with the District of Columbia, finally joined the recession in April.

The economic decline continued to accelerate in April in Elkhart, Ind., where .

Not a single metro area in the nation was judged to be in recovery. But a couple of the components of the index — particularly housing starts — had pockets of growth from the previous year. These figures are based on comparisons of three-month moving averages for the periods ending April 2008 and April 2009.

Housing starts: The low point for housing starts was January, when only 14 metro areas showed gains from a year earlier. The number of areas showing gains has steadily climbed to 33. That's still less than one in 10 metro areas in the nation. And the gains, though the percentage changes may be high, are compared with a period a year ago when housing construction nearly stopped dead in many areas. The data reflect all new housing, whether single-family or multi-family.

Jobs: 20 metro areas showed increases in employment. Many of these are the metro areas that had been slow to join the recession. The number of areas gaining jobs has continued to slide from month to month, so there's no sign the bottom has been reached. Areas showing the greatest jobs growth were Odessa, Texas, up 3.5 percent; Madera-Chowchilla, Calif., up 2.8 percent; and Lewiston, Idaho, up 2.7 percent.

Manufacturing: Not a single metro area showed gains in industrial production. In fact, the number of metro areas with gains in industrial production has been at zero for the five months spanning December 2008 to April 2009. The smallest declines in the nation were recorded in Carson City, Nev., down 3.8 percent, and Wichita, Kan., down 4.3 percent.

Home prices: We also now have values for home prices for the first quarter, January through March, with 140 metro areas showing gains in home prices from a year earlier. Most of the gains are slight. The greatest was in the Elmira, N.Y., metro area, up 10 percent from a year earlier.

These variations are expected, with jobs likely to be last to come back, economists say.

"Different economic indicators will signal recovery at different points of the business cycle," Gledhill said. "Production metrics such as industrial production and housing starts are more likely to show a turn up first. Businesses first make efforts to increase worker productivity; in other words, try to maximize output with their existing workers. Hiring does not follow until later as these efforts are exhausted."

Info on every metro area
Here are several ways to explore this month's Adversity Index:

  • An
  • The updated index will be published every month at . There is a lag of nearly two months, so May data will be out in July.
  • An tells how the Adversity Index assesses the economy.

The national pictureOf the 50 states, only Alaska had shown enough growth to delay a declaration of recession by the end of March. Add the District of Columbia to that list, too. But both were in recession when April ended.

Among metro areas, 99 percent, or 377 out of 381, were in recession by the end of April, up from 98 percent, or 373, i n the March data.

The four metro areas still not in recession are judged to be at risk of recession, meaning they are decelerating toward the downturn. They are Bismarck, N.D.; Killeen-Temple-Fort Hood, Texas; Laredo, Texas; and Texarkana, Texas-Arkansas. Joining the recession in April were the metro areas of Anchorage, Alaska; Las Cruces, N.M.; Midland, Texas; and Odessa, Texas.

A view from ElkhartThe numbers continued to slide in Elkhart, where has been reporting on the nation's struggles through the lens of the Indiana city.

  • Employment in the Elkhart-Goshen metro area fell 14.3 percent from a year earlier, according to the latest Adversity Index, compared with a 13.7 percent annual decline reported in the March data. Again, this was the greatest decline in the nation. The next two on the list showed milder declines: 9.8 percent in the metro area of Holland, Mich., and 9.7 percent in the carpet manufacturing area of Dalton, Ga.
  • Industrial production in the Elkhart area fell 27.4 percent year over year, compared with a 27.2 percent annual decline reported in the Adversity Index a month earlier. This was second-worst among metro areas. First was Gary, Ind., down 27.6 percent.
  • The housing construction industry fell by 55 percent in Elkhart from a year earlier, according to the latest Adversity Index. That's a slight improvement from the 57.3 percent decline a month earlier. On this measure, Eklhart has moved to the middle of metro areas, no longer at the bottom, with 200 metro areas showed worse declines in housing starts. The fastest fall was in Battle Creek, Mich., down 95 percent.

Those three measures are based on comparisons of three-month moving averages for the periods ending April 2008 and April 2009.

The fourth component of the Adversity Index, house prices, has been updated for the first quarter of the year, comparing the three months ending March 2008 and March 2009.

In Elkhart, housing values rose 1.38 percent from a year earlier. Elkhart has shown slight growth in housing values throughout the recession, having avoided the bubble and the bust.

The greatest decline in housing values was in the Merced, Calif., area, down 31.9 percent. Las Vegas was next, down 27.8 percent.

Areas with more housing starts
Only these 33 metro areas had increasing housing starts, out of 381 metro areas in the U.S., according to the Adversity Index from Moody's Analytics and They each showed increases between the three-month periods ending April 2008 and April 2008. Some areas cross state lines and are listed more than once.

Texarkana, Texas-Arkansas, up 48%

Vallejo-Fairfield, 440%

Bradenton-Sarasota-Venice, 22%
Palm Coast, 45%
Tallahassee, 20%

Lake County-Kenosha, Illinois-Wisconsin, 12%

Kokomo, 117%

Dubuque, 35%
Waterloo-Cedar Falls, 35%

Lawrence, 253%

Clarksville, Tennessee-Kentucky, 99%

Baton Rouge, 8%

Portland-South Portland-Biddeford, 21%

Bethesda-Frederick-Gaithersburg, 16%
Cumberland, Maryland-West Virginia, 16%

Cambridge-Newton-Framingham, 47%
Providence-New Bedford-Fall River, Mass.-R.I., 20%

Ann Arbor, 153%

Grand Forks, North Dakota-Minnesota, 0.7%

New Jersey
Atlantic City, 32%

New York
Syracuse, 54%

North Dakota
Grand Forks, North Dakota-Minnesota, 0.7%

Columbus, 19%

Harrisburg-Carlisle, 49%
Lancaster, 53%
Reading, 34%

Rhode Island
Providence-New Bedford-Fall River, Mass.-R.I., 20%

Clarksville, Tennessee-Kentucky, 99%
Cleveland, 9%

Longview, 263%
Odessa, 19%
San Angelo, 56%
Texarkana, 48%

Olympia, 77%
Tacoma, 32%

West Virginia
Cumberland, Maryland-West Virginia, 16%

Lake County-Kenosha, Illinois-Wisconsin, 12%
Madison, 25%
Racine, 42%