Plentiful, better paying jobs drive local housing markets. This link between economic performance and metro housing markets underlies the Housing Market Vitality Indicators (HMVI). With over 100 months of historic data covering all metro areas, the HMVI are well-studied, tested, and validated. What has been missing thus far is an independent assessment of metropolitan area economic performance.
The recently published research “The Most Dynamic Metropolitans” by the Walton Family Foundation fills that gap by ranking the economic performance of metropolitan areas across the country. The research uses metrics such as job growth, income gains, and proportion of total jobs at young firms to gauge economic performance. The research demonstrates the beneficial link between economic growth and investments in the knowledge economy.
HMVI is concerned with the impact of economic conditions on future house prices and the Walton Research is studying the impact of new economy investments on economic performance. Intuitively, the two rankings should agree. In the table below, we report the top 10 metropolitan areas for economic performance as identified by the Walton Research and tag each area with the HMVI metrics that assess the area’s current house price situation and forecast relative to the national market.
In 9 out of the 10 metros, HousingIQ and the Walton research rankings agree. The manufacturing heavy Elkhart-Goshen MSA is the sole exception likely because of the ongoing trade situation.
Conclusion: Metro areas that outperform in the knowledge economy understandably also have better performing housing markets. As local areas boost investments in the new economy, planners must pay greater attention to the housing situation or risk worsening the affordability crisis and hurting economic growth.