Latest Annual U.S. and Canadian City Housing Starts (Parts 2)

Article source: CMDGroup

In the previous Economy at a Glance, there was an examination of ‘total’ housing starts in the largest urban centers in the U.S. and Canada.

2015 ‘actuals’ and year-over-year percent changes were laid out in two tables for 12 cities south of the border and six on the northern side.

The figures are being called ‘starts’, although for the U.S. centers they are actually derived from residential building permits.

The city definitions are based on broad boundaries that include downtown cores and nearby suburbs with close commuting ties.

In this current EAAG, the focus will be narrowed to the single-family market.

Nation-wide in the U.S., single-family starts are now accounting for about two-thirds of total starts, with multiples making up the other 33%. (In Canada last year, the proportions were the reverse, 35% for singles and 65% for multiples.)

The share in the U.S. taken by ‘singles’ has dropped dramatically over the past several years. A decade ago, it wasn’t uncommon for singles to be as much as 80% of total starts.

There has been a clear trend away from new residential construction in the ‘boonies’ and towards high-rise living under ‘big city lights”. Both young adults, leaving academia and launching their careers, and aging empty-nesters are enjoying the convenience of close-at-hand entertainment, shopping and all manner of other amenities.

One interesting way to measure this shift is to compare average annual single-family starts over the past ten years with the ‘mean’ over the most recent five years. (And keep in mind that the 10-year average has an unfavorable bias on account of capturing the worst of times in 2008-2009.)

For ten of the 12 largest U.S. cities, the most recent five-year average is lower than the 10-year average. In three cases, the drop has been considerable. Chicago has gone from a 10-year annual average of 9,500 units for single-family starts to a five-year average of 6,500.

Dallas-Fort Worth has fallen back from 22,300 to 20,900 and Atlanta from 17,600 to 13,400.

Only Boston (4,400 units on average over both 10 and five years) and San Francisco (3,500 units according to both time frames) have stayed the same.

None of the cities among America’s 12 largest has recorded an annual average increase.

Looking at other U.S. cities beyond the dozen in Tables 3 and 4, Minneapolis-St Paul (6,100 units) and San Diego (2,700 units) have managed 10-year and 5-year averages that are the same in the single-family market.

Denver, remarkably, has eked out a small gain (from 6,500 to 6,700).

A similar pattern has prevailed in Canada. The most readily apparent declining trend in single-family starts in the land of Mounties and maple leaves has occurred in Montreal, but Ottawa-Gatineau, Toronto and Calgary have also exhibited long slides. (Toronto’s +15.8% year over year change in 2015, as shown in Table 4, may have been a random blip.)

To the extent that Edmonton and Vancouver have been bucking the trend, their single-family starts levels have been relatively flat over the past decade to fifteen years, although definitely not on ascendant paths.

From Table 3, the two biggest cities in Texas – Houston (36,700 units) and Dallas-Fort Worth (28,400) – were the frontrunners for single-family starts in the U.S. in 2015.

Scouring through all the Census Bureau/NAHB data yields an additional amazing fact or two. Both Charlotte (11,700 units) and Nashville (10,800) can boast that they recorded single-family starts levels last year that were higher than in New York.

(Continued in “Latest Annual U.S. and Canadian City Housing Starts (Part 3)“.)

Tags: Alex Carrick, Canada, CMD, CMDGroup, Housing, market, single-family, US

Category: CMD Group

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