Using two both new home sales figures and new home sales share,CoreLogic determined that eight out of the 10 hottest markets for new home sales are located in the South, let by Nashville, Tennessee, at 17 percent year-over-year growth.
In CoreLogic’s recently-released May 2015 MarketPulse, Chief Economist Sam Khater noted that Nashville is one of only five markets nationwide which has had a greater number of home sales in 2015 than it had in the pre-crisis years of the early 2000s.
Khater said his report that while Census Bureau data reports 441,000 in new home sales nationwide for the 12-month period ending in January 2015 is still more than 200,000 below the national average of 660,000 for the last 50 years, this data does not tell the whole story since it masks areas where new home sales are thriving. Of the 50 metropolitan areas measured, 17 of them experienced year-over-year growth in new home sales.
According to CoreLogic, San Jose, California, was the metro area with the second-highest year-over-year home sales growth with 14 percent. San Jose was one of only two of the top 10 markets for highest year-over-year new home sales growth; the other was Portland, Oregon, which was eighth. Atlanta, Georgia, ranked third at 10 percent.
“Atlanta’s new home market strength is particularly remarkable given that distressed sales still account for 16 percent of all sales – by far the highest of the (top) three markets,” Khater said. “As distressed sales continue to fall in Atlanta, that will give additional marginal lift to new sales.”
Filling out the top 10 for hottest new home sales growth were Jacksonville, Florida (fourth); Greenville, South Carolina (fifth), Sarasota-Bradenton, Florida (sixth); Fort Worth, Texas (seventh); San Antonio, Texas (ninth); and Miami, Florida (10th). Houston and Dallas ranked at No. 12 and 13, respectively, giving Texas four of the top 13 markets for new home sales growth.
Seven of the top 10 markets for new home sales share as of January 2015, according to CoreLogic, were located either in Texas or the Carolinas. The top market was El Paso, where 22 percent of all home sales were new home sales (the national average for new home sales share was 8 percent). Raleigh, North Carolina, was second a 21 percent despite a downward trend in new home sales in 2014 due to home price appreciation and high rates, according to Khater.
“The good news is that Raleigh’s permits have strengthened in the first three months of 2015 and are running slightly ahead of 2014,” Khater said.
Charleston, South Carolina, ranked third at 20 percent, followed by Houston, San Antonio, and Austin at fourth through sixth, and Charlotte, North Carolina, at seventh. Charleston has had a steadily improving home sales market and is one of those five markets in the top 50 where new home sales are at higher levels than they were in the early 2000s, despite a $60,000 new home price appreciation in the last two years, Khater said.
“Looking forward, southern markets with strong demographic growth will exhibit robust new home sales activity,” Khater said. “In many of the remaining metros with solid job growth, the reality of very low inventory of unsold new homes, declining vacancies, and rapid price appreciation will lead to more construction in the next few years that will lift many more markets above their current new home sales trajectory.”