Date post: | 23-Dec-2015 |
Category: |
Documents |
Upload: | branden-peter-robbins |
View: | 221 times |
Download: | 0 times |
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
Slow and Steady Wins the Race:Housing Market Outlook
David Stiff, Principal Economist, Case-ShillerNovember 19, 2014
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
Agenda
U.S. Economy U.S. Housing Markets Boston Housing Market Demographics (the “Millennials”) Globalization and Real Estate Markets
2
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
Trying to Close a Large Output GapGross domestic product, $ bil 2009, SAAR
Sources: Bureau of Economic Analysis, Congressional Budget Office
$5.6 trillion in lost output, about $46,000 per household
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
Households Have Deleveraged% of disposable income
Sources: Federal Reserve, Bureau of Economic Analysis
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
Banking System is Well CapitalizedCommercial banks
Source: FDIC
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
Businesses Are Highly Profitable …After-tax corporate profit margin, %
Sources: Bureau of Economic Analysis, National Federation of Independent Business
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
… but Wage Growth Continues to LagEmployment cost index, total compensation, Y/Y % change
Source: Bureau of Labor Statistics
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
Houses Are Cheap (U.S.)% of median family income
Sources: NAR, Freddie Mac, HUD, Census Bureau, CoreLogic (calculation)
(2014 dollars)
Median P & I
Payment
Median Asking Rent
Jul-1971 $818
Jul-2006 $1,340 $726
Jul-2014 $811 $747
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
Home Sales Inching UpwardU.S. single-family home sales, ths, SAAR
Sources: NAR, U.S. Census
Gap because of foreclosure sales and limited new construction
Increases due to homebuyer tax credits
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
Distressed Sales No Longer Dominating MarketsShare of U.S. home sales, SA
Source: CoreLogic
Decrease due to homebuyer tax credits
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
Housing Market Has Regained BalanceMonths supply of single-family homes, existing and new, U.S.
Sources: National Association of Realtors, U.S. Census
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
Big Price Bounces in the “Sand” StatesChange in single-family home prices, July 2011 to July 2014
12
Source: CoreLogic Case-Shiller
Decline
0% to 7.5% increase
7.5% to 15% increase
15% increase or m ore
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
Difficult to Buy a House with Less Income
Source: U.S. Census
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
Mortgage Lenders Are Too Cautious
14
Source: CoreLogic
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
Average annual appreciation since 1976 (4.8%)
Sources: CoreLogic, Moody’s Analytics
Price Appreciation is ModeratingU.S. single-family home prices, Y/Y % change
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
Houses Are Cheap (Boston)% of median family income
Sources: Freddie Mac, HUD, Census Bureau, CoreLogic (calculation)
(2014 dollars)
MedianP & I
Payment
Median Gross Rent
Jul-2006 $1,940 $1,211
Jul-2014 $1,447$1,281 (2013)
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
Very Limited Inventory …Months supply of homes, Boston metro area
Sources: Greater Boston Association of Realtors
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
… is Restraining Sales ActivityHome sales, SA, Boston metro area
Source: Greater Boston Association of Realtors
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
Largest Price Gains in Towns Inside I-495 Change in single-family home prices, July 2011 to July 2014
19
Source: CoreLogic Case-Shiller
0% to 7.5% increase
7.5% to 10% increase
10% to 15% increase
15% increase or m ore
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
Sources: CoreLogic, Moody’s Analytics
Average annual appreciation since 1976 (6.3%)
Price Appreciation is ModeratingSingle-family home prices, Y/Y % change, Boston metro area
“Boomers” Have Entered Their Prime Earnings Years (slide from 2001)
“Boomers” Have Entered Their Prime Earnings Years (slide from 2001)
Age of Householder
Households, 1990, millions
Households, 2000, millions
Change, 1990 to 2000, millions
Median Household
Income, 2000, $ thousands
Home Ownership Rate, 2000
15 to 24 5.1 5.4 0.3 $27.7 17.0%
25 to 34 20.4 18.1 -2.3 $44.5 46.1%
35 to 44 20.6 24.4 3.8 $53.2 66.7%
45 to 54 14.5 20.7 6.2 $58.2 75.8%
55 to 64 12.5 13.9 1.4 $45.0 80.1%
65 to 74 11.7 11.4 -0.3 $23.0 82.8%
75 and Over 8.4 11.4 3.0 $18.9 76.9%
All Ages 93.2 105.3 12.1 $42.1 67.0%
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
The “Millennials” Will Drive Markets
22
Sources: Census, Pew Research Center, NAR, Freddie Mac, CoreLogic
Early Baby Boom Late Baby Boom Generation X Millennials
Born 1946 to 1954 1955 to 1964 1965 to 1980 After 1980
Age in 2014 60 to 68 50 to 59 34 to 49 18 to 33
Population (2013) 30.2 mil 43.8 mil 65.7 mil 70.2 mil
Unemp. rate (age 25 to 32)
5.7%(in 1979)
7.3%(in 1986)
5.8%(in 1995)
8.2%(in 2013)
P&I payment median home(2013 dollars)
$1,380(in 1979)
$1,216(in 1986)
$1,035(in 1995)
$748(in 2013)
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
Careers Starting Well (for College Grads) …Median annual earnings full-time workers ages 25 to 32, $ 2012
23
Sources: U.S. Census, Pew Research Center
Early Boomers
(1979)
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
… but Jobs Needed to Form New Households
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
Millennials Are Moving Into the Housing Market …Population
Source: U.S. Census
Largest Age CohortMedian Age of
First-Time Homebuyers
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
… Driving a Rebound in Apartment ConstructionHousing starts, ths, SAAR, 12-month average, U.S.
Source: U.S. Census Bureau
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
More Multi-Family Development in Boston
27
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential 28
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
U.S. Real Estate Became Less ExpensiveHome price indexes, 2000:Q1=100
29
Sources:The Economist, National Bureau of Statistics of China, Standard & Poor's, Teranet and National Bank
United States
China
Canada
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
Global Markets Drive U.S. Interest RatesTreasury securities holdings, $ bil
Sources: Federal Reserve, U.S. Treasury
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
Globalization Leads to Greater VolatilityFinancial crises vs. capital mobility
31
©2014 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
Summary
U.S. economic recovery is accelerating (slowly) U.S. housing markets will continue steady improvement
Increasing sales and construction activity Moderating price appreciation
Boston housing market constrained by limited inventory “Millennials” will be as important as “Boomers” Increasing direct and indirect effects of globalization on
local real estate markets
32