Metros where job growth outpacing new housing supply
Stacker, March 29, 2022 (excerpt)
We’ve all heard tales about how tough it can be to find—let alone afford—housing in cities like New York or San Francisco. When the demand far outweighs the available properties in a given area, costs get artificially driven up and it becomes commonplace for many people to be forced out into the suburbs to find housing, only to be stuck in long commutes to and from work each day.
In a normal market, there’s typically a six-month supply of houses. While we typically think of huge metro areas like the aforementioned cities when we consider housing shortages, the truth is a shortage of housing can happen anywhere and in any type of market. All it takes is a local issue, like strict zoning laws—or one major event, such as a global pandemic—to cause a housing shortage.
A perfect storm of pandemic factors since 2020, including record-low mortgage rates and more mobility for remote workers, have caused widespread housing shortages from busy metropolitan areas like Los Angeles to small cities in the middle of Indiana or Michigan. Supply chain issues, a lack of labor forces, and building materials shortages have exacerbated the issue. Housing shortages have led buyers and investors to pull out all of the stops in order to land housing contracts, making the market even more competitive. Sellers, on the other hand, reap the benefits of getting multiple offers over the asking price….
#15. Urban Honolulu, Hawaii
– Job-to-housing permit ratio: 32.3
– New jobs added between August 2020-August 2021: 34,600 (420,500 total employment)
– Single-unit housing permits issued between August 2020-August 2021: 1,072
Honolulu has had a housing shortage for decades. Unlike the other cities or metro areas on this list, much of the shortage here is due to wealthy buyers purchasing vacation homes that sit vacant for large parts of the year, leaving little inventory for new and existing residents.
Other factors, from low mortgage loan interest rates to the remote-work shift, have also led newcomers to relocate to picturesque Hawaii. This has led to high demand for housing and high prices that incentivize investors to sell—but the rate at which new construction homes are built, the high cost of building materials, and a lack of labor force make it tough for builders to keep up with demand. Another issue frustrating the housing shortage crisis is the fact that Hawaii residents can only develop homes on 5% of Hawaii’s landmass….
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