A New Housing Boom

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By Chris Isidore


The long-battered housing market is finally starting to get back on its feet. But some experts believe it could soon become another housing boom.

Signs of recovery have been evident in the recent pick ups in home prices, home sales and construction. Foreclosures are also down and the Federal Reserve has acted to push mortgage rates near record lows.

But while many economists believe this emerging housing recovery will produce only slow and modest improvement in home prices, construction and jobs, others believe the rebound will be much stronger.

Barclays Capital put out a report recently forecasting that home prices, which fell by more than a third after the housing bubble burst in 2007, could be back to peak levels as soon as 2015.

"In our view, the housing market had undergone a dramatic over-correction during the prior five years, resulting in pent-up demand for housing purchases that would spark a rapid rise in housing starts," said Stephen Kim, an analyst with Barclays, in a note to clients.

In addition to what Kim sees as a big rebound in building, he's bullish on home prices, expecting rises of 5 percent to 7.5 percent a year.

Construction is expected to be even stronger, with numerous experts forecasting home construction to grow by at least 20percent a year for each of the next two years. Some believe building could be back near the pre-bubble average of about 1.5 million new homes a year by 2016, about double the 750,000 homes expected this year.

"We think the recovery is for real this time around," said Rick Palacios, senior analyst with John Burns Real Estate Consulting. "If you look across the U.S. economy right now, there are only a handful of industries looking at 20 to 30 percent growth over the next four to five years, and housing is one of those."

Home builder stocks are up 162 percent in the last 12 months, led by a 250 percent jump at PulteGroup. Other leading builders including DR Horton, Toll Brothers, KB Home and Lennar have all seen their stocks more than double over that time. New orders at publicly-traded builders are up 30 percent since January, according to Kim.

Palacios said stocks in other sectors, from manufacturers of drywall to flooring to kitchen and bath fixtures, have all more than doubled as well this year.

The housing rebound can have a ripple effect that could help get the entire economy growing at a much stronger pace, which will add to more demand for housing.

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A New Housing Boom

For years, Brooklyn took a backseat to its towering neighbor, Manhattan -- but no longer.

Today, Brooklyn is one of the fastest growing cities with a population of about 2.5 million, making it the most populous borough in New York and independently one of the largest cities in the U.S.

This hipster-friendly borough attracts young chefs, artists, entrepreneurs, families and more, who have opened farm-to-table restaurants, cool art galleries and boutiques, and trendy shopping areas like the Brooklyn Flea and Dekalb Market. With amazing cultural venues like the Brooklyn Academy of Music and the Brooklyn Museum, and the addition of the Barclays Center, NYC’s newest sports and entertainment venue, the area is bound to continue to develop and gentrify.

Find homes for sale in Brooklyn.

Seattle picked up momentum back in the ‘90s when Kurt Cobain popularized the grunge trend and a little coffee shop called Starbucks began to gain traction.

Today the city continues to attract young people and was recently ranked the best place for young professionals to thrive, according to mobile events company timeRAZOR, thanks to its high number of bars and restaurants (numbering over 6,000) and its high median income (the average college graduate there earns $53,185 annually).

Seattle was also ranked one of the 10 Cities With the Fastest Growing Wages in America. Home to major corporations Microsoft, Amazon and Boeing, and tech startups like Facebook and Zynga (which recently opened offices there), the city will continue to attract young, creative professionals in the next few decades.

Find homes for sale in Seattle.

This college town was recently ranked the Next Biggest Boomtown in the U.S. by Forbes.

It’s the third fastest-growing city in the U.S., according to the Census Bureau, with high rates of job creation.

Austin is also a hip, artsy college town that attracts artists, students, intellectuals and creative types. The thriving live music scene and Tex-Mex food add to the allure, ensuring that people will continue to call Austin home.

Find homes for sale in Austin, Texas.

With its laid-back outdoorsy lifestyle, organic restaurants, hip coffee shops, and a featured role on the IFC show Portlandia, Portland has become a popular destination for young twenty-somethings.

According to a recent YPulse survey, more and more millennials are opting to live in small cities, like Portland.

This small, creative city was ranked the number one green city in the US by the Mother Nature Network, and it's also one of the most bike-friendly cities in the US.

Find homes for sale in Portland, Ore.

Boulder is fast becoming the newest tech center with a thriving community of startups, earning it the nickname of Silicon Flatirons.

In fact, there are so many new jobs here, with at least 50 tech companies hiring, that the organizers of Boulder Startup Week paid for people to fly to Boulder to fill these open jobs.

Boulder is widely regarded as one of the healthiest and happiest cities in the U.S., according to Gallup, thanks to the active outdoor lifestyle and the thriving intellectual community that comprises this college town.

Find homes for sale in Boulder, Colo.

This charming city attracts college students, families, and immigrants, with its job prospects, safety, affordable housing, and short commutes.

As a result, Raleigh was ranked the No. 1 city for business and careers by Forbes, with the fastest growing job market in the U.S. It’s also the fastest growing city in the U.S., according to the Census Bureau.

Find homes for sale in Raleigh, N.C.

After years of neglect and devastation -- sinking so low that the state of Michigan threatened to take it over -- Detroit is poised for a comeback.

According to a recent YPulse survey, more and more millennials are opting to live in small cities like Detroit.

These young idealists are moving back to Detroit, breathing new life into the downtrodden city with their small businesses, many of which are socially and environmentally responsible. The Urban Innovation Exchange showcases Detroit’s growing social innovation movement, promoting small businesses such as Recycle Here! and Food Lab Detroit. This type of optimism and innovation makes Detroit a city to watch.

Find homes for sale in Detroit.

The low housing prices, affordable lifestyle, and cool arts scene are attracting young people to Philadelphia.

These people are getting involved in the city through organizations like Young Involved Philadelphia and bringing a new sense of dynamism to it, with new restaurants, shops, galleries, and a cool music and arts scene.

The City of Brotherly Love has some of the best public art in the country. It's famous for its murals, which adorn buildings all around the city. The City of Philadelphia Mural Arts Program coordinates these murals, connecting artists to the community.

Philadelphia was also ranked one of the 10 Cities With the Fastest Growing Wages in America.

Find homes for sale in Philadelphia.

There used to be only one main reason to move to Nashville: country music. But that’s changed.

Nashville’s economy is booming, and the city has one of the fastest growing job markets in the U.S. Forbes ranked it as one of the Next Big Boom Towns in the U.S.

Between the steady job growth, the thriving music and culture scene, and the diverse population, the country music capital will continue to grow.

Find homes for sale in Nashville, Tenn.

Walmart, the second biggest American corporation according to the Fortune 500, is headquartered in this relatively small city in northwest Arkansas.

The Walmart campus and Walton family play a big role in the Bentonville culture. Walmart heir Alice Walton spent $800 million on the Crystal Bridges Museum of American Art, which was designed by architect Moshe Safdie and houses her vast personal collection.

As the Waltons continue to invest and Walmart continues to thrive, Bentonville will become a top city.

Find homes for sale in Bentonville, Ark.

This laid-back city epitomizes small-town charm, but it’s also emerging as a leader in sustainability.

Most restaurants here serve local organic fare, shops sell local Vermont-made products, and people shop for groceries in community-owned co-ops. Much of the food consumed in town comes from local farms or from the Intervale Center, a nonprofit organization that cultivates 350 acres of land to provide food for the city's  residents.

This environmentally-friendly city has turned its focus on sustainability into a form of economic self-reliance -- a model which will become increasingly more important in the years ahead.

Find homes for sale in Burlington, Vt.

Home to major tech companies Google, Microsoft, LinkedIn, Mozilla and more, Mountain View is arguably one of the most tech-centered cities in the world.

In fact the city is so tech-focused that there’s citywide free Wi-Fi, courtesy of Google, and the Computer History Museum.

With more and more startups finding a home here, this Silicon Valley hub is bound to continue to innovate and attract tech-savvy residents.

Find homes for sale in Mountain View, Calif.

With its affordable housing, thriving student population, emerging arts and hip-hop scenes, and fast-growing job market, Pittsburgh is quickly becoming the newest hipster haven.

The Steel City is attracting and retaining these young creative types with its cool cultural environment and thriving economy.

It was recently ranked the second-best performing city in the U.S. by the Metro Monitor from the Brookings Institute and one of the top cities in the U.S. where people are hiring, according to Gallup.

Find homes for sale in Pittsburgh.

With its active healthy lifestyle, its beautiful mountainous surroundings, and its thriving job market, Salt Lake City, recently ranked One of the 10 Best Cities for College Grads, will continue to attract eager young college graduates.

The city was also recently ranked One of the Fastest Growing Job Markets in the U.S.

Find homes for sale in Salt Lake City.

North Dakota is experiencing an oil boom, which could make Williston and the nearby towns one of the largest sources of petroleum in the country -- and that means unprecedented wealth in the years ahead.

The population has exploded as people flock there in droves to seek their fortunes, and although the city is undertaking a building frenzy, it hasn’t been able to keep up with the influx of wannabe oil workers.

This oil boom is both a blessing and a curse as it has meant overcrowding, traffic and a housing shortage, but Williston is frantically trying to keep up and will be an area to watch.

Find homes for sale in Williston, N.D.

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