A simple measure of tightness in a market for owner-occupied housing is the homeowner vacancy rate (number of homes for sale divided by the number either for sale or owner-occupied). Builders are often interested in markets that are tight by this measure, because it indicates prospective buyers will have difficulty finding a suitable home among the available existing units.
Several federal government surveys provide homeowner vacancy rates, but the one with the greatest geographic detail by far is the Census Bureau’s American Community Survey (ACS). In a recent study, NAHB tabulated the most recent (2010) ACS this data for all metropolitan areas in the country.
Overall, the tightest markets tend to be relatively small: Corvallis, Ore. (with a homeowner vacancy rate of 0.23 percent), Lebanon, Pa. (0.49 percent), Billings, Mont. (0.54 percent), San Angelo, Texas (0.61 percent), and Eau Claire, Wis. (also 0.61 percent).
The two tightest large markets in 2010—Nassau-Suffolk, N.Y. and Santa Ana-Anaheim-Irvine, Calif.—were also the two tightest large markets the last time NAHB looked at the ACS data in 2008.
The NAHB study provides a rundown of the top-10 metros according to nine key measures, including: owner-occupied housing units; homeownership rate; home owner vacancy rate; share of single-family detached homes; value of homes owned; home owner incomes; growth in stock of single-family detached homes; and share of homes built recently. It also has a spreadsheet that shows how more than 350 other metro areas stack up in each category.
Read the original article at the National Association of Home Builder blog, Eye on Housing.