Local Leaders: 2019 Shows Strongest New Home Sales in the Top 50 Markets Since 2007

This year’s Local Leaders list—a record of the nation’s 50 largest markets ranked by new-home closings in 2019—provides a bird’s-eye view of the new-home construction industry’s most productive year in over a decade.

However, with the onset of the COVID-19 pandemic, the Local Leaders list has become one of many 2019 datasets thrown into turmoil. While it is accurate in its view of the past, it will be difficult to use to project continued growth, positive or negative, without the context of the virus’s effects on each market.

“The new-home market in 2019 had the best year of sales going back to 2007,” says Ali Wolf, chief economist at BUILDER sister company Meyers Research. “Demographic tailwinds, low mortgage rates, and economic confidence kept the housing market in high gear throughout the year and into the early months of 2020. The impact of the coronavirus on the economy and housing market was abrupt and severe. The housing market went from the strongest year since the Great Recession to stalling out as consumers felt the economic impacts of COVID-19, including job losses and uncertainty.”

The Dallas-Fort Worth-Arlington market in Texas remains at the top of our latest list with 34,197 new-home closings in 2019, up from 32,161 closings in 2018. Another market in the state, Houston-The Woodlands-Sugar Land, is not far behind with 30,566 new-home closings in 2019, up from 27,368 closings in 2018.

These Texas markets, driven by high populations and land availability, are among the most active in the United States. The third-largest home market, Georgia’s Atlanta-Sandy Springs-Alpharetta, had 21,558 new-home closings in 2019. The top nine home markets have retained their positions on the latest list compared with last year, while Tampa has risen to No. 10 and Denver has moved down to No. 11.

Wolf and the Meyers Research team have identified a number of new-home markets that they consider at “high risk” or “low risk” of COVID-19 impact on single-family construction in the short term, based on regional economic conditions, job losses, construction delays, and the proliferation of COVID-19 itself. Dallas has been identified as a low risk in the short term, as well as Phoenix (No. 4), Austin (No. 5), and Tampa.

Wolf notes that Austin, Charlotte, San Antonio, and Tampa have all had positive net migration in recent years and offer relative affordability, lifestyle benefits, and a warm climate. This, she says, accounts for their strong performance despite lower populations.

Notably, Houston is among the high-risk markets, along with Atlanta, Orlando (No. 6), Las Vegas (No. 13), and Miami (No. 15). “Houston, the second highest market for 2019 closings, is on our short-term high-risk list,” Wolf says. “This is largely due to Houston’s exposure to the energy sector. While Houston is more diversified than it was 20 years ago, the energy sector is still a main part of the economy. Houston is facing a one-two punch from COVID-19 and the energy sector, but it will likely remain a top market for closings in 2020 based on the sheer market size.”

While circumstances remain unpredictable, these observations—combined with past performance—can provide a framework for the future of each market, both as the pandemic continues and as the recovery begins. “Housing is poised to help lead the economy out of the recession, but home sales will be inconsistent,” Wolf says. “In particular, markets with a large concentration of at-risk jobs related to COVID-19 and/or a high concentration of the illness will likely take longer to recover.”

Click here to view the full Local Leaders list for 2020, including the top 10 builders in each of the Local Leaders markets and scroll below for a look at popular layouts by leading home builders in Tampa, Fla., Houston, and Nashville, Tenn.