Four of Colorado’s seven metropolitan areas outperformed the nation in overall score based on three critical measures of economic health: employment, housing price and single-family building permits, according to the most recent National Association of Home Builders/First American Leading Markets Index (LMI).
The LMI ranked Boulder 145th – the third highest of Colorado metros – out of about 340 metros nationwide. In price and employment data, Boulder County outperformed all Colorado metro areas and the nation.
Boulder County is running at 96 percent of normal economic and housing activity, based on LMI’s combined calculations of permit, price and employment data.
Denver-Aurora-Lakewood was the highest ranking Colorado metro at 121st, with an overall score of 0.99. Fort Collins claimed second among the Colorado metro areas at 129th in the nation and an overall score of .98.
Boulder County’s overall score of 0.96 ran a close third, with the biggest differential being in the lower permit score of 0.37 – the third lowest of the Colorado metros and below the 0.48 national score.
Pueblo again measured the lowest among Colorado metros with an overall score of 0.77, meaning that it’s performing at 77 percent of normal economic and housing activity, though it has risen slightly over a previous score of 0.72.
The index’s nationwide score inched up to 0.94, meaning that the nationwide average is 94 percent of normal economic and housing activity. Meanwhile, 90 percent of markets have shown an improvement year-over-year.
The LMI compares current levels of employment, housing price and single-family building permits to their last normal, sustainable levels. The normal period used for comparison of single-family permits and home prices is 2000-2003. For employment, 2007 is the base comparison – the year before the beginning of the Great Recession. The three components are then averaged to calculate an overall score for each market and for the nation. An index value above one indicates that a market has advanced beyond its previous normal level of economic activity.
All seven of Colorado’s metropolitan areas showed continued resilience in their economies and housing markets, as reflected in the fourth quarter of 2015.
Here’s how Colorado’s metro areas performed:
“The number of markets on this quarter’s Leading Markets Index at or above 90 percent has reached 217—almost 65 percent of all markets nationwide,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Company, which co-sponsors the LMI report. “This demonstrates that the breadth of the housing recovery continues to grow.”
Housing prices showed gains in 95 percent of the markets.
“Among the LMI components, house prices continue to show the most extensive recovery, with 322 markets having returned to or exceeded their last normal levels,” said NAHB Chief Economist David Crowe. “Single-family permits are edging forward, but remain at only 48 percent of normal activity.”
The LMI identifies those areas that are now approaching and exceeding their previous normal levels of economic and housing activity. Approximately 340 metro areas are scored by taking their average permit, price and employment levels for the past 12 months and dividing each by their annual average over the last period of normal growth. In calculating the LMI, NAHB utilizes employment data from the Bureau of Labor Statistics, house price appreciation data from Freddie Mac and single-family housing permits from the U.S. Census Bureau. In 2015, the Census Bureau revised the manner in which it obtains monthly counts of MSA single-family permits data. To maintain consistency within the LMI, NAHB excluded certain MSAs and improved comparability with previous years for the remaining areas.
For the full report visit: http://www.nahb.org/en/research/housing-economics/housing-indexes/leading-markets-index.aspx
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