In an October 2011 webinar, an Associated General Contractors of America (AGC) panel discussed current and long-term trends in residential homebuilding, showing recovery several years off. Annual national housing starts continue to be in the 600,000 – 650,000 range (since 2009), which remains far below long-run estimated needs ranging between 1.5 million and 1.8 million annual starts.
The Pittsburgh metro area, however, continues to show very positive trends in housing prices and percentage of mortgages underwater. Pittsburgh ranked #1 with a 4% increase in house price index, ahead of typical leaders Boston, New York and Washington, DC. Tampa, Sacramento, Phoenix and Las Vegas markets continued to suffer, as all experienced double-digit decreases in housing price index during the past 12 months. The national average for housing prices in metro areas was a 4.4% decrease during 2011.
Relative to metro areas with homeowners having mortgages underwater, Pittsburgh again was the #1 ranked metro area at only 6%. Only Philadelphia(8%) and San Antonio(9%) were the other metro areas with less than 10% of homeowners with mortgages in excess of the fair value of their homes. Conversely, over 45% of the mortgages in Miami, Orlando, Phoenix and Las Vegas were underwater, while the national average hovered around 23%.
While the panel noted that private residential spending actually increased 4% in 2011 and anticipated substantial growth in housing starts over the next two years, multifamily construction continues to carry residential spending as rental demand far outpaces single-family housing starts. Experts have estimated that certain metro areas, such as those with negative trends noted, may have five years worth of housing inventory available, flooding the market with underpriced housing in a slowly recovering economy. The Pittsburgh area though, fueled by Marcellus Shale opportunities and somewhat isolated from the extreme fluctuations experienced throughout the country, continues to enjoy modest growth in an otherwise difficult market.
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