Tuesday, August 14, 2012

NAHB: Housing Opportunity Index up in most metros

According to the Housing Opportunity Index (HOI), released today by the National Association of Home Builders, the affordability of homes for purchase increased in all Colorado metros except Greeley from the second quarter of 2011 to the second quarter of 2012. Grand Junction was not included in the survey.

The HOI increased, year over year in Boulder, Denver-Aurora, Colorado Springs, Ft. Collins-Loveland, and Pueblo.

Comparing the different metro areas to each other, Pueblo was found to have the highest HOI and Boulder had the lowest HOI.

The values for each metro area during the second quarter of this year were:

Boulder 71.6
Colorado Springs 84.6
Denver-Aurora 76.8
Ft. Collins-Loveland 83.9
Greeley 85.6
Pueblo 90.5

The graph shows the trends in the HOI since the first quarter of 1999:

The HOI looks at for-purchase housing only and does not consider rental housing and rent levels. There are few surprises here, as Boulder is known for its expensive housing, and Pueblo is known for low-cost housing, although with much lower incomes as well.

Nevertheless, the increase in the HOI for most metros suggests that for-sale housing prices have remained rather stable while a little progress has been made in incomes.

In recent years, even with reports of bidding wars, we're finding that in many areas, home prices still aren't matching what they were in 2007 and 2008, and that the fiercest price competition is for the more modestly-priced homes. Although home prices have recently shown growth, most of these comparisons are only with 2011 prices and neglect the larger declines we've seen since 2008.