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Labor Day Special: Celebrating 5 Markets With Awesome Job and Housing Growth

Labor Day is way more than a time to watch weird local parades, or zone out to the U.S. Open, or have one last chance to mooch a free summer weekend from a pal with a country home. No, this is the holiday we set aside each year to celebrate the contribution labor makes to the prosperity of the country. After all, nothing moves financial markets like changing trends in employment reported by the Bureau of Labor Statistics.

As an economist, I love data—the more, the better. But if I were stranded on a lonely island and could have access to only one data point to understand the direction and health of the housing market (and yes, this is something I think about way too often), I would want to keep track of jobs over all else.

Job creation leads to household formation (people moving out to get their own place), and household formation defines the need for new construction and influences the pace at which existing homes turn over.

When employment is strong and growing, consumers are more confident about their present and future. When consumers are more confident, they are more likely to buy a home (or sell an existing home and buy another one).

To celebrate Labor Day 2016, I’d like to put a spotlight on the five major markets that have seen the most collective growth in jobs and home sales over the past two years. These markets are seeing incredible growth in their respective housing markets thanks in large part to incredible growth in jobs.

5. Raleigh, NC

Raleigh is setting new record highs for home prices amid continuing strong growth in home sales because of continued stellar growth in employment. The past two years have seen more than 47,000 jobs created, while unemployment has fallen to 4.6%.

4. Boise, ID

Boise has enjoyed a compound annual growth rate in home sales of 13% over the past two years, which is one of the highest sales growth rates in the country. That growth rate has been spurred by almost 17,000 jobs created over the 24 months ending in June. The unemployment rate has fallen all the way down to 3.6% this summer, providing a solid foundation for strong consumer confidence to keep the momentum going.

3. Charlotte, NC

Yes, North Carolina features two incredible housing markets being powered by incredible gains in employment—the greater Charlotte metropolitan market includes both Concord and Gastonia. More than 75,000 jobs have been created over the past 24 months in Charlotte, which has resulted in unemployment falling to 5.2%. The housing market has followed these gains as home values are now fully recovered and sales have grown at a compounded annual rate of 11% over the past two years.

2. Nashville, TN

Nashville is the hipster capital of the South, and the housing market has been as hot as its chicken. The market—including the surrounding Davidson County and nearby Murfreesboro and Franklin—has seen twice the pace of job creation as the U.S. has enjoyed over the past two years. Unemployment is down to 3.4%. Home prices are setting record highs, but the area’s relative affordability is enabling millennials to get into homeownership and drive a compounded annual growth rate in home sales of 10% over the past two years.

1. Portland, OR

Only Portland can challenge Nashville for hipster and housing bragging rights. Like Nashville, the market—including nearby Hillsboro, OR, and Vancouver, WA—has enjoyed twice the U.S. pace of job growth over the past two years, which amounts to almost 94,000 more people employed. Unemployment this summer was down to 4.3%. Home sales have grown at a compound annual rate of 12%. And home prices in Portland are now at record highs.

These markets produced the best results for employment and housing over the past two years. They have attracted young people because of economic opportunity, but they also offer a recognized quality of life that attracts workers and employers alike. The challenge they face is keeping this positive mojo going, which means seeing growth in new construction to support the growth in jobs and households.

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