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When trying to understand why the residential housing market is facing a hard time in certain markets, looking at the numbers may give us a big clue. Cities like Las Vegas, Austin, Orlando, Atlanta, and  Phoenix all have few natural boundaries so expansion is  possible. Cities like Los Angeles and New York have very few places to build so even in a downturn pricing will hold steadier.

So if there are no natural boundaries, builders have few restrictions and optimism will abound. When the markets turned sour in some of these cities in 2005 builders did not react, instead continued to flood the market with new inventory and the glut develops. The chase for market share dwarfs common sense and huge industry losses will occur.

I would love to be the builder  who slowed down in 2006, set aside their assets to buy  land at the bottom while the other builders are dumping, and then started building in 2008. Of course, that builders name will be the household name replacing many that we know now.

Top 10 Highest Residential Building Rates in USA in 2006

(residential building permits, building permits per 100,000 people) 

1. Charlotte-Gastonia-Concord, NC-SC 20,281 12.93
2. Las Vegas-Paradise, NV 21,590 12.16
3. Austin-Round Rock, TX 17,753 11.87
4. Orlando-Kissimmee, FL 23,498  11.71
5. Atlanta-Sandy Springs-Marietta, GA 53,944  10.70
6. Houston-Sugar Land-Baytown, TX 55,105  10.23
7. Nashville-Davidson–Murfreesboro, TN 13,771 9.49
8. Jacksonville, FL 11,497 9.03
9. Phoenix-Mesa-Scottsdale, AZ 35,790 8.90
10. Riverside-San Bernardino-Ontario, CA 33,508 8.30

Related posts:

1. Top 10 Markets With Highest Mortgage Risk, Summer 2007
2. Top 10 Cities With Highest Foreclosure Rates in 3rd Quarter, 2007
3. Top 10 Lowest Office Vacancy Rates - 2nd Quarter, 2007
4. Top 10 Cities With Highest Foreclosure Rates - 1st Half of 2007
5. Housing Inventory Increases For Majority Of Cities, Drops In Boston and San Diego