U.S. Housing Market Conditions, First Quarter 2003: National Data

Springfield, Missouri
Springfield’s diverse economy has enabled it to moderate the impact of the nation’s general economic downturn, and the local job market has outperformed the state of Missouri as a whole. In the 12 months ending February 2003 total nonfarm employment increased 1 percent to 164,000 employees with approximately 75 percent of the workforce in the metropolitan area employed in medical, retail, education, and leisure and hospitality businesses. The unemployment rate as of February was 3.5 percent.

With a nearly 8-percent gain, the leisure and hospitality sector has registered the highest rate of job growth in the area during the past year. Employment has grown because of Springfield’s proximity to the Ozarks, a major destination spot for outdoor enthusiasts, and the area’s proximity to Branson, Missouri.

One of Springfield’s resort retailers is Bass Pro Shops, the area’s fourth largest employer. The company’s world headquarters is located in the area, as is the company’s largest retail outlet. Springfield’s two largest employers, Cox Health Systems and St. John’s Health System, are each building additions to their medical complexes and consequently will be adding medical employees.

Southwestern Missouri State University, the third largest employer in the area, also recently expanded, enlarging the university’s infrastructure to accommodate an increasing student body and faculty. These expansions, along with the construction of a new 174,000-square-foot regional convention and exposition center and a new 8,000-seat minor league baseball park, are stimulating overall job creation, household growth, and demand for housing in the Springfield area.

As a result of the strong increase in the economy between 1990 and 2000, households increased by 27 percent in the metropolitan area to approximately 130,000 by 2000. Net migration contributed to household growth, adding approximately 2,500 people annually to the area. Approximately 2,000 housing units were added to the inventory annually during this period.

Single-family activity has been relatively stable in recent years. Between 1996 and 2002 single-family permit activity averaged approximately 2,000 units. Unusually harsh winter conditions slowed single-family building activity during the first 3 months of 2003. Permit activity was down 16 percent compared with the same quarter in 2002 but is expected to increase significantly during the next 6 months due to strong demand. Home sales remained at high levels during the first quarter of 2003. Existing home sales increased 16 percent compared with the same quarter a year ago. The average sales price was $115,000. The hottest housing markets for new homes are in southwestern Greene County and western Christian County.

The rental market has been relatively tight throughout most of the year because of the demand for rental housing from the students of Southwestern Missouri State and from medical staff employed at Cox Systems and St. Johns. The overall rental vacancy rate currently is approximately 5 percent, with the rate forecasted to increase during the summer months.

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