WASHINGTON -- Builders ended 2011 with a third straight year of dismal home construction and the worst on record for single-family home building. But improvement at the end of the year lifted hopes for a recovery.
In December, builders broke ground on a seasonally adjusted annual rate of 657,000 homes, the Commerce Department said Thursday. A third straight increase in single-family home building was offset by a drop in volatile apartment construction.
The housing market still appears years away from full health.
For the entire year, builders began work on 606,900 homes. That's slightly better than in the previous two years. But it's only about half the number that economists equate with healthy markets.
Construction began on 428,600 single-family homes in 2011. It was the fewest on records dating back a half-century. In a good economy, builders tend to break ground on roughly twice as many. Single-family homes are key to a housing rebound because they account for roughly 70 percent of the market.
Still, analysts said the final months point to improvement.
"We expect further sustained gains in starts and permits over the next few months; a real recovery is getting started," said Ian Shepherdson, chief U.S. economist at High Frequency Economics.
Homebuilders have grown slightly less pessimistic because more people are saying that they might be open to buying a home this year. The National Association of Home Builders/Wells Fargo builder sentiment index rose in January to its highest level since June 2007.
The number of actual purchases remains weak, but the rising interest from would-be buyers, along with record-low mortgage rates, is raising optimism.
Builders are struggling to compete with deeply discounted foreclosures and short sales, however. (Short sales occur when lenders allow homes to be sold for less than what's owed on the mortgage.)
Though new homes represent just 20 percent of the overall home market, they have an big impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.
After previous recessions, housing accounted for at least 15 percent of U.S. economic growth. Since the recession officially ended in June 2009, it has contributed just 4 percent.
Another reason new-home sales have fallen is that previously occupied homes have become a better deal. The median price of a new home is about 30 percent higher than the median price for a re-sale. That's nearly twice the markup typical in a healthy housing market.
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$50K+ job postings per 100 unemployed: 47 (U.S. avg.: 11)
Manchester weathered the recession with a 6% unemployment rate, and the former mill town’s strong income growth and refurbished business district still make it a promised land for job seekers. Finance and health care are traditionally strong sectors here, with average wages between $64,000 and $75,000 a year. Six percent of city residents work in management positions, pulling in $105,000, on average. Employers such as the Southern New Hampshire Medical Center and Elliot Hospital are hiring for high-paid positions in nursing, information technology and management.
The District of Columbia promises job openings in the tens of thousands – and not any old openings, either. The average annual wage in the District runs 40% above the national average, dwarfing even larger, costlier cities such as Boston and New York. Nearly 1 in 10 Washingtonians work in finance, often as government analysts, pulling in more than $83,000 a year. An additional 8% work in management jobs, where average salaries run above $125,000. Government contractors, such as General Dynamics and Northrop Grumman, are hiring.
A former industrial town turned government center, Trenton’s job, salary and technology-sector growth rank among the top 50 in the country. The overlooked capital city boasts something else, too: low competition for high-paying jobs. Bristol Myers Squibb, Princeton University and the University of Medicine and Dentistry of New Jersey are all hiring in the region, with openings for business managers, financial analysts and research scientists. Trenton’s largest industries include finance, health care and computer technology, which collectively employ 20% of the city’s workforce at an average of $75,000 to $87,000 a year.
Boston is the center of New England’s finance, information-technology and health care sectors, which means that jobs in Beantown are both abundant and well-paid. In fact, the city’s most common occupations include registered nurse ($87,630 a year, on average), general manager ($125,400) and software developer ($102,950). Firms such as Genzyme and Tufts Medical Center are currently hiring in the life sciences. And if current patterns hold, Boston’s economy will continue to grow. In 2011, it outpaced other large cities on almost every recovery metric, from unemployment levels to manufacturing job growth.
Baltimore’s booming life-science, international finance and maritime commerce sectors make the port city a prime place to score a competitive job. Johns Hopkins University and its accompanying medical system are the city’s largest employers, with 1 in 10 city residents working in health care or research. Meanwhile, Baltimore’s technology and defense sectors are growing. Mosaic Techologies Group, SAIC and Northrop Grumman are hiring analysts, systems administrators and program managers at starting salaries well over $50,000.
Worcester’s life-science sector is growing fast, and the sudden crop of new labs and offices means many biotech firms are hiring. Genzyme, a global medical research company, posted openings for automation engineers, analytical scientists and manufacturing associates; the UMass Medical Center needs analysts and developers. Roughly 15% of Worcester residents work in health care, life science or information technology. The annual salaries for these jobs fall in the $75,000 to $80,000 range. Managers, who make up 6% of Worcester’s workforce, can expect to make more than $109,000 annually.
Cedar Rapids anchors the Midwestern tech, health care and finance sectors, and there are plenty of high-power firms hiring in all three. Rockwell Collins, an aircraft systems designer and the city’s largest employer, is looking for financial analysts, solutions architects and systems engineers. Aegon and the University of Iowa are also hiring en masse. Health care occupations pay an average of $62,000 a year in Cedar Rapids; computer and tech jobs pull in $65,000. One of every 20 residents works in a management position, earning roughly $95,000 a year.
Anchorage’s remoteness works in job seekers’ favor: Competition for jobs is relatively low, and companies pay top wages to lure talent north. Health care and energy are both top industries, with roughly 6% of the population working in each. CH2M, the international engineering firm, runs a large operation in the area and is currently hiring engineers, analysts and project managers. The Alaska Regional Hospital is looking for RNs. Average salaries for health care and extraction jobs are $89,240 and $60,410, respectively. Wages for all professions skew 16% above the national average.
Despite a recent brush with bankruptcy, Harrisburg continues to be a boomtown for job seekers. Health care and state government, two of the city’s largest employers, always seem to need new blood. WellSpan Health, PinnacleHealth and the Penn State Hershey Medical Center are all hiring in Pennsylvania’s capital for positions ranging from nurse and physical therapist to systems manager. Harrisburg’s health care workers make $66,600 annually, on average. Thirteen percent of the city works in government, where salaries vary but managers can easily make more than $100,000.
Oklahoma City is the place the recession forgot. Even in the darkest days of 2008, the city skimmed by with a 3.7% unemployment rate and saw considerable growth in its medical, education and energy sectors. The pattern still holds: 7% of city residents work in health care, 6% work in education, and 6% work in construction and extraction, often for large oil and gas operations, such as Devon and Chesapeake Energy. In fact, Chesapeake is currently hiring accountants, analysts, project managers and a range of other positions. Salaries average north of $60,000 per year.
Twenty-one Fortune 500 companies are headquartered in the Twin Cities, and thanks to a strong, diversified local economy, many of them are hiring. Minneapolis boasts vibrant finance, manufacturing, and professional and technical service sectors, as well as a growing export and medical technology industry. UnitedHealth, Target and Picis are all looking for business and systems analysts. General Mills and Xcel Energy are also hiring in the region. Salaries in Minneapolis’s business sector run about $65,000, while technical occupations rake in nearly $80,000 annually.
Landing a lucrative job in Springfield is easy. The city lies on a so-called “Knowledge Corridor” between Southern Massachusetts and Hartford, a region rich in tech companies, top hospitals and big universities. All three fields promise good jobs: Baystate Health is hiring nurses and speech pathologists; Travelers and Cigna Insurance are looking for research analysts and project managers. Salaries run about $70,000 a year and up.