CHICAGO, April 8 /PRNewswire/ -- Housing starts are expected to total
1.410 million this year, down 4.4 percent from 1996's 1.475 million, according
to Chicago Title and Trust Co.'s annual Housing Starts Forecast. The reason
for 1997's downturn: higher interest rates.
"The Fed has been tinkering with the economy, and I expect this tightening
to continue through the first half of the year, with some easing during the
second half," said John Pfister, vice president and Marketing Research
manager, Chicago Title and Trust Co. (CT&T).
Top cities to watch
In spite of the slight downturn, several markets will continue to shine
throughout 1997. For the seventh year in a row, Atlanta maintains its
No. 1 ranking, outrivaling all other major U.S. metropolitan areas. "Atlanta
is the financial and distribution center for the entire Southeast area
(including the Carolinas, Florida and Alabama). As the Southeast continues to
grow, Atlanta must grow with it," said Pfister. Despite its steady growth,
Atlanta's starts will fall 4.5 percent to 47,100 in 1997. This decline
mirrors that of the U.S. average (-4.4 percent). Pfister attributes Atlanta's
decrease to a post-Olympics flattening that is taking hold in the city.
Ranking in at No. 2, Phoenix will build only 200 fewer homes this year
than in '96, for a total of 40,000 starts. According to Pfister, Phoenix will
fare well in '97 due to its excellent combination of high-tech businesses and
its strong presence as a resort and retirement market center.
Of the top 10 cities featured in the forecast, Pfister expects two to
increase their starts from last year: Ranked fourth, Las Vegas will add
33,500 starts (+4.0 percent); and ranked seventh, Seattle-Tacoma will add
21,500 (+1.9 percent). "It is remarkable that Las Vegas will push ahead of
Chicago into the No. 4 spot, despite the fact that it is about one-sixth the
size of Chicago. If we adjusted the number of starts in Las Vegas based on
actual market size, it would be the top market in the country," said Pfister.
"Seattle-Tacoma continues to fare well thanks to Boeing and its high-tech
businesses," added Pfister.
Another surprising market is Detroit (ranked No. 9). With employment
growth decently above the U.S. average and unemployment below the U.S.
average, Pfister forecasts that Detroit will match last year's figure of
19,800 starts.
1997 HOUSING STARTS FORECAST
TOP 10 STATES
Change
Rank 1993 1994 1995 1996 1997 '97/'96
1 Florida 115,100 128,600 126,600 126,800 125,300 -1.2%
2 Texas 77,800 102,600 108,300 117,100 111,800 -4.5%
3 California 84,400 97,000 86,400 93,300 98,900 6.0%
4 Georgia 53,900 64,900 74,400 81,300 77,600 -4.6%
5 North
Carolina 53,300 62,900 62,800 68,100 64,500 -5.3%
6 Arizona 39,800 52,700 54,300 55,500 55,300 -0.4%
7 Michigan 39,800 46,500 48,600 52,500 50,000 -4.8%
8 Illinois 44,800 49,300 48,900 51,500 49,400 -4.1%
9 Ohio 44,300 47,200 46,100 50,400 48,000 -4.8%
10 Virginia 45,100 46,800 44,400 47,000 44,600 -5.1%
Total U.S.
Starts 1,288,000 1,457,000 1,354,000 1,475,000 1,410,000 -4.4%
Top 10 states for housing starts
Of the 10 states projected to have the largest number of starts in '97,
Florida maintains its No. 1 ranking for the sixth consecutive year with
125,300 starts (-1.2 percent). Of the 10 Florida markets included in the
forecast, three are expected to increase in '97, and one will remain constant
with last year's numbers. The most notable increase is in Miami, where
8,000 starts are projected, (+35.6 percent). Other Florida cities expected to
improve are West Palm Beach (+3.1 percent) and Daytona Beach (+2.7 percent),
while Fort Myers will add 5,600 starts this year -- the same as in '96.
Maintaining its No. 2 ranking for the fourth consecutive year, Texas is
expected to add 111,800 starts in '97, down 4.5 percent from last year.
Although Texas continues to gain on Florida, Pfister doesn't yet foresee the
day it will pass the Sunshine State. However, both Dallas-Fort Worth and
Houston are within the top 10 metropolitan areas, ranking third and eighth,
respectively.
California again takes third place for its total number of starts in '97.
While it is the only top 10 state expected to add more starts in '97 than the
previous year (98,900 starts, +6.0 percent), California's residential real
estate market still has a long road to travel toward recovery. According to
Pfister, California's last decent year was in 1988 -- when it boasted
255,000 starts. That same year, San Bernardino-Riverside was the No. 1 market
in the country with 53,100 starts, and Los Angeles ranked No. 2 with
50,300 starts. In contrast, last year the entire state had 93,300 starts,
with San Bernardino-Riverside at 12,500 starts and Los Angeles at
8,600 starts.
Will California recover to the success level of its past? Pfister
believes a recovery will take place, but not in 1997; possibly in 1998.
"People talk about the fact that California is currently recovering. But the
recovery has taken place mainly in Northern California -- where there are not
a substantial number of housing starts to begin with. Southern California has
the potential for housing starts, but this area is slow to recover," said
Pfister.
Chicago Title and Trust Co. is the source of real estate services,
providing title insurance, escrow and closing services, as well as appraisal,
credit and flood certification products through a network of more than
300 offices and approximately 3,700 agents nationwide. The Chicago Title and
Trust Family of Title Insurers -- including Chicago Title Insurance Co., Ticor
Title Insurance Co. and Security Union Title Insurance Co. -- together issues
approximately one in every four title insurance policies in the United States
with annual gross revenues in excess of $1.3 billion. CT&T also is the parent
company of National Flood Information Services Inc. of Arlington, Texas;
Credit Data Reporting Services Inc. of Kingston, N.Y.; and Market Intelligence
Inc. of Hopkinton, Mass. Chicago Title and Trust Co. is a wholly-owned
subsidiary of Alleghany Corp. (NYSE: Y).
1997 HOUSING STARTS FORECAST
MAJOR METROPOLITAN AREAS
Change
Rank 1993 1994 1995 1996 1997 '97/'96
1 Atlanta 35,700 41,400 48,800 49,300 47,100 -4.5%
2 Phoenix 25,500 35,000 38,200 40,200 40,000 -0.5%
3 Dallas-Fort
Worth 27,300 34,100 37,200 39,800 38,100 -4.3%
4 Las Vegas 21,100 28,100 29,800 32,200 33,500 4.0%
5 Chicago 30,900 33,500 32,500 34,900 33,400 -4.3%
6 Washington,
D.C. 30,400 32,000 29,600 31,500 30,000 -4.8%
7 Seattle-
Tacoma 18,600 23,600 18,500 21,100 21,500 1.9%
8 Houston 14,400 19,900 19,100 21,200 21,000 -0.9%
9 Detroit 14,900 17,700 18,100 19,800 19,800 0.0%
10 Portland,
Ore. 13,800 17,200 18,000 19,300 18,300 -5.2%
11 Denver 13,100 16,800 17,100 18,000 17,700 -1.7%
12 Minneapolis-
St. Paul 19,300 17,700 17,900 18,200 17,400 -4.4%
13 Charlotte-
Gastonia,
N.C. 10,800 13,800 14,000 18,700 17,300 -7.5%
14 Austin,
Texas 8,600 10,900 13,900 17,800 16,200 -9.0%
15 Orlando,
Fla. 16,700 16,800 16,200 16,400 16,000 -2.4%
16 Nashville,
Tenn. 8,200 10,300 11,600 15,900 14,900 -6.3%
17 Philadelphia 15,400 14,700 13,300 14,900 14,300 -4.0%
18 Tampa-St.
Petersburg,
Fla. 12,600 14,900 13,800 14,700 14,000 -4.8%
19 Raleigh-
Durham, N.C. 10,600 15,200 14,100 14,500 14,000 -3.4%
20 Fort
Lauderdale,
Fla. 13,000 15,800 13,000 14,900 13,900 -6.7%
21 Indianapolis 10,400 12,000 13,800 14,400 13,600 -5.6%
22 Salt Lake
City 8,900 8,800 10,800 13,000 13,200 1.5%
23 Riverside-San
Bernardino,
Calif. 13,200 12,900 10,800 12,500 13,000 4.0%
24 St. Louis 11,600 13,300 11,600 13,000 12,300 -5.4%
25 Columbus,
Ohio 11,400 11,600 10,500 12,500 12,000 -4.0%
26 Kansas City
Metro 9,600 11,000 11,300 12,400 11,800 -4.8%
27 New York 7,300 6,600 7,300 11,800 11,200 -5.1%
28 Baltimore 13,100 12,700 11,600 11,000 11,000 0.0%
28 San Francisco
-Oakland 7,600 9,200 8,800 10,400 11,000 5.8%
28 Anaheim,
Calif. 6,400 12,800 8,300 10,400 11,000 5.8%
31 Jacksonville,
Fla. 7,600 8,700 8,800 11,600 10,700 -7.8%
32 West Palm
Beach, Fla. 9,000 11,700 10,400 9,800 10,100 3.1%
33 Los Angeles 7,400 7,800 7,900 8,600 9,800 14.0%
34 San Antonio 5,800 9,400 8,500 9,900 9,500 -4.0%
35 Greensboro,
N.C. 7,600 8,000 9,000 9,700 9,400 -3.1%
36 Cincinnati 9,100 12,100 9,100 9,800 9,300 -5.1%
37 Memphis, Tenn.7,400 7,500 9,100 9,800 9,000 -8.2%
38 Miami 9,100 11,500 14,700 6,600 8,700 31.8%
39 Sacramento,
Calif. 7,900 9,400 7,500 8,400 8,400 0.0%
40 Norfolk, Va. 9,700 9,000 8,800 8,300 7,800 -6.0%
40 San Jose,
Calif. 3,500 4,000 3,500 7,700 7,800 1.3%
42 San Diego 5,800 7,000 6,800 7,000 7,700 10.0%
43 Grand Rapids,
Mich. 5,400 6,600 7,300 7,900 7,500 -5.1%
44 Milwaukee 7,200 7,000 6,300 7,600 7,400 -2.6%
45 Boston (PMSA) 7,400 7,300 6,700 7,400 7,200 -2.7%
46 Cleveland 6,700 7,200 7,700 7,400 7,000 -5.4%
46 Greenville,
S.C. 5,100 6,300 6,200 7,400 7,000 -5.4%
48 Tucson, Ariz. 6,200 8,500 7,300 6,600 6,800 3.0%
49 Louisville,
Ky. 5,700 6,300 5,700 6,400 6,100 -4.7%
50 Sarasota,
Fla. 4,600 5,200 5,100 6,400 6,000 -6.3%
50 Richmond, Va. 6,600 6,500 6,100 6,300 6,000 -4.8%
50 Albuquerque,
N.M. 4,400 6,600 6,700 6,200 6,000 -3.2%
53 Fort Myers,
Fla. 5,300 5,400 5,000 5,900 5,900 0.0%
53 Middlesex-
Somerset,
N.J. 5,100 4,500 5,100 6,000 5,900 -1.7%
53 Birmingham,
Ala. 5,100 5,000 6,100 6,200 5,900 -4.8%
56 Pittsburgh 6,400 6,800 5,500 6,000 5,800 -3.3%
57 Nassau-Suffolk,
N.Y. 3,800 4,700 4,200 5,500 5,500 0.0%
58 Monmouth-Ocean,
N.J. 5,300 6,000 5,000 5,700 5,400 -5.3%
59 Naples, Fla. 3,700 4,300 4,300 5,700 5,200 -8.8%
59 Colorado
Springs,
Colo. 3,700 3,800 4,800 5,500 5,200 -5.5%
61 Omaha, Neb. 4,000 3,300 4,100 5,600 4,900 -12.5%
61 Oklahoma City 4,000 4,300 4,400 5,100 4,900 -3.9%
63 Reno, Nev. 2,700 3,500 3,300 4,900 4,800 -2.0%
64 Knoxville,
Tenn. 3,900 4,300 4,600 4,900 4,600 -6.1%
65 Fresno,
Calif. 5,000 5,300 5,000 3,900 4,100 5.1%
65 New Orleans 3,600 4,100 4,100 4,300 4,100 -4.7%
67 Boise City,
Idaho 6,100 6,600 4,900 4,500 4,000 -11.1%
68 Daytona Beach,
Fla. 3,700 3,400 3,900 3,500 3,600 2.9%
69 Tulsa, Okla. 3,000 3,100 3,600 3,600 3,500 -2.8%
69 Newark, N.J. 4,800 4,800 4,100 3,700 3,500 -5.4%
71 Des Moines,
Iowa 2,800 3,900 3,300 3,400 3,400 0.0%
72 El Paso,
Texas 2,700 3,900 2,700 3,500 3,300 -5.7%
73 Bakersfield,
Calif. 3,400 3,200 3,500 2,700 3,000 11.1%
74 Madison, Wis. 3,900 3,900 3,500 2,700 2,700 0.0%
75 Ventura,
Calif. 1,400 2,500 2,200 2,400 2,600 8.3%
76 Buffalo, N.Y. 2,800 3,000 2,400 2,300 2,200 -4.3%
77 Albany, N.Y. 2,900 2,900 2,600 2,100 2,000 -4.8%
78 Honolulu 3,400 4,600 4,600 2,300 1,600 -30.4%
SOURCE Chicago Title and Trust
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CONTACT:
Stephen Flanagan, 312-223-2959, or Amy
Beckman Sekili, 312-223-2459, or, For technical information, John
Pfister, 312-223-2310, all of the Chicago Title and Trust Co.
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