3. www.NoradaRealEstate.com
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About Metropolitan Statistical Areas and This Report
This report focuses primarily on Metropolitan Statistical Areas (MSA), the geographic building blocks of
America’s economy and society. Why metropolitan areas? Unlike individual cities and towns, or large
political units like states, these are the places within which most people live their daily lives. Most
Americans (84 percent) live in metropolitan areas. Most workers (58 percent) commute to jobs within
their metropolitan area, but in a city or town different from the one in which they live. Most
metropolitan residents who move (79 percent) choose another location within the same metro area.
We do our shopping in different parts of metropolitan areas, get our media from metro‐wide
newspapers and television stations, and root for sports teams and visit cultural institutions that service
whole regions. We share natural resources and infrastructure — air, water, roads, airports — at the
metropolitan level. Related businesses cluster and share innovations and labor force expertise within
metro areas. In short, metropolitan areas represent the critical geographic lens through which to
understand a changing housing market trend.
Metropolitan areas as a statistical concept join cities and their suburbs together to represent local and
regional markets. In the United States, Metropolitan Statistical Areas are defined by the U.S. Office of
Management and Budget (OMB) based on data gathered by the Census Bureau. The OMB locates these
areas around a densely populated core, typically a city, of at least 50,000 people. Counties that have
strong commuting ties to the core are then included in the definition of the metropolitan area. The
OMB currently identifies 366 metropolitan areas nationwide, with populations ranging from 55,000
(Carson City, NV) to 19 million (New York–Northern New Jersey–Long Island, NY‐NJ‐PA).
Within this group of metropolitan areas, this report concentrates the bulk of its attention on the 100
largest, which in 2008 coincided almost exactly with those metro areas having populations of at least
500,000. While there is nothing especially magical about the half million‐person threshold, these
metropolitan areas are fairly recognizable places to most Americans. Moreover, nearly all of their
largest cities have populations of at least 100,000. Even more remarkably, these large metro areas
continue to slowly but steadily increase their share of the nation’s population. At the turn of the 20th
century, 44 percent of Americans lived in the counties that today make up the 100 largest metro areas.
By 2000 that share had risen to 65 percent, and by 2009 reached 66 percent.
Figures within this report are based on single‐family residential properties, and future job growth
percentages are 10‐year projections unless otherwise noted.
Forecasts are created by over one dozen economists and real estate professionals providing data for the
economic forecast model. Data sources include but are not limited to the following: U.S. Census Bureau,
Bureau of Labor Statistics, Consumer Price Index, Federal Housing Finance Agency (FHFA), Uniform
Crime Reports, Federal Bureau of Investigation, Consumer Expenditure Survey Index, Moody’s
Economy.com, The Brookings Institution, National Association of Realtors, State Association of Realtors,
National Association of Home Builders, Hanley Wood and the Expert Metropolitan Board.
17. www.NoradaRealEstate.com
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Understanding the Graphs
Total Employment and Unemployment
Total employment refers to non‐farm wage and salaried employees in the area. The unemployment rate is the percentage of
unemployed persons in the region’s labor force. Employment data are based upon a survey of businesses, while unemployment
rate information is based upon a survey of households.
How to Use It
Total employment and the unemployment rate typically have an inverse relationship. These metrics can be used to determine
the health of the local labor market. Jobs are a major factor for housing demand. High levels of employment and low
unemployment rates tend to lead to healthier housing markets.
Annualized Net Migration
The difference between the number of people who immigrate in and emigrate out of a particular region. These graphs show
annualized data updated monthly.
How to Use It
Can be used to forecast population trends. Migration trends can be indicative of demographic and employment trends in a
particular area. Market areas with substantial inflows of new residents will have greater demand for new and existing homes.
Market areas with negative net migration will have less demand for additional homes.
Market Share of Home Sales
Displays home closing share by sale type with each type representing their percentage of the entire market. Sale types are New
Homes, Regular Resale Homes (typical resale transactions between private parties), REO Sales (Real‐Estate Owned by Banks),
and Foreclosures (properties being transferred from homeowners to mortgage holders).
How to Use It
Communicates the segments in the local housing market which are most active in the current month as well as in the same
month one and two years prior. Seeing the change in percentage from one year to a next is an indicator of the performance of
that sale type. This can also be a gauge of market health; for instance, a large percentage of activity in REO Sales and
Foreclosure Sales may imply a distressed market.
Year over Year Change in Price and Price/Sq Ft
Displays the average closing sales amount and the average price per square foot for the current month along with the same
month a year ago and the year prior to that. These price metrics include all re‐sales, REO sales, and new home sales in the
market and therefore take into account all arm’s length transactions.
How to Use It
Provides a trending view of year‐over‐year pricing in the market. Year‐over‐year comparisons are more reliable to follow than
month‐over‐month as seasonal differences can impact monthly trends. Taken together, the two pricing trends enable reliable
insights into the pricing strength of the market. A positive trend in both indicates a healthy and strong market. A negative
trend in both reveals weakness. A mixed trend, such as one where the average closing price is increasing but price per square
foot is decreasing reflects likely changes in product mix and so conflicting pricing trends do not provide reliable insights in such
a mixed scenario.