When the National Association of Homebuilders/First American Improving Markets Index was released Jan. 9, it included good news for Missouri – or at least, two of its cities, with both Joplin and Columbia nabbing spots on the list.
The index identifies metropolitan areas that have shown improvements from their respective lows in housing permits, employment and house prices for at least six consecutive months.
Joplin and Columbia were among 40 areas nationwide that were added to the list in January, becoming the state’s only two cities on the list and bringing the total number of areas listed to 76.
“The fact that the list of improving housing markets nearly doubled this month shows that a significant, positive trend is developing, and is even more relevant when you consider the expanding geographic distribution of the list, which now includes 31 states and the District of Columbia,” said NAHB Chairman Bob Nielsen, in a news release.
While the index brings good news for home builders in Columbia and Joplin, perhaps a bigger question is what Springfield’s absence means for builders in the Queen City.
Matt Bailey, president of the Home Builders Association of Greater Springfield and part owner of the Bailey Co., said he suspects the reason Springfield didn’t make the list is because the area simply didn’t get hit as hard economically during the recession as areas that are on the list.
“Some of the other markets that show gains were around 11 (percent) or 12 percent unemployment, so they have better room for growth than we did,” Bailey said.
That doesn’t mean, however, that all is rosy in the local home-building market. Data from the NAHB show that single-family building permits dropped 30 percent in the Springfield metropolitan statistical area between November 2010 and November 2011. During that same year, Joplin’s permits were down 9 percent, even factoring in home-building efforts after the May 22 tornado, and Columbia’s volume fell 6 percent. Factoring increases in multifamily housing for all three markets, both Joplin and Columbia posted overall growth, while Springfield showed a 3 percent decrease.
“I don’t take permitting as an indicator in growth and housing, because it’s skewed sometimes,” Bailey said, noting that permits are sometimes issued in spurts, such as multiple permits pulled at once for a single housing project.
Ryan Mooney, senior vice president of economic development for the Springfield Area Chamber of Commerce, classifies the regional economy as very stable, noting that because the Ozarks didn’t get hit as hard as other areas, recovery here has begun more quickly. He points to a couple of recent bright spots as evidence.
In December, Greene County was ranked No. 5 in the Top 10 midsize counties for economic strength in the Fourth Economy Community Index. The index measures a community’s ability to attract and retain modern investment, and Greene County was the only Missouri county to make the list.
Also last month, researchers at 24/7 Wall St. LLC ranked Springfield third in the nation for job growth between November 2010 to October 2011.
“Unemployment is 6.7 percent, as of November,” Mooney said. “For the first time in three or four years, we dropped below 7 percent. At the same time, we’re adding jobs. … That’s certainly a positive sign, as we see more and more jobs becoming available. They usually have a direct correlation to new homes being built in the area.”
BLS data show November unemployment at 6 percent in Columbia and 6.6 percent in Joplin.
Another positive factor, for Missouri as a whole and Springfield, particularly, is cost-of-living data. Missouri’s statewide cost of living ranked 13th-lowest nationwide, and Springfield’s cost of living was the lowest among the state’s six largest metropolitan areas, according to the Missouri Economic Research and Information Center in the Department of Economic Development.
Bailey and Mooney agreed that job creation and reduced unemployment will be the keys to reviving home building.
“The more jobs you have, the more people will build,” Bailey said.
Based on his own experience and feedback from other builders, Bailey thinks the area will start to see some recovery in the home-building sector later this year.
“We are seeing an uptick in people talking about building. I think more people are interested in it now,” Bailey said. “But again, it’s not going to be this great jump. You’re not going to see a great jump up 30 percent over last year because right now people are being cautious about building.”[[In-content Ad]]
