8/20/2019 Leadership Summit (August 2015)
1/30
Economic and Real Estate
OutlookBy Lawrence Yun, Ph.D.
Chief Economist, National ssociation of REL!OR"#
Presentation at NR Leadershi$ "ummit
Chica%o, &L
u%ust '(, )('*
8/20/2019 Leadership Summit (August 2015)
2/30
+os- million lost / ') million %ained0
')(,(((
')*,(((
'1(,(((
'1*,(((
'2(,(((
'2*,(((In thousands
8/20/2019 Leadership Summit (August 2015)
3/30
!o$ and Bottom "tates for +os
The Best
% Gain in12 months
3tah 2.(4
5lorida 1.4
Ore%on 1.24
6ashin%ton
1.24
California 1.)4
7eor%ia 1.)4
NorthDakota
1.)4
Ne8ada 1.(4
TheWorst % Gain in12 months
6est:ir%inia
;(.4
laska (.>4
8/20/2019 Leadership Summit (August 2015)
4/30
!oo ?ot-@os in thousands0
• "eattle
A)((,((( from)('(
• Den8er
A)*(,((( from)('(
')((')*('1(('1*('2(('2*('*(('**('>((
'>*(
'((('(*(''((''*(')((')*('1(('1*('2((
'2*(
8/20/2019 Leadership Summit (August 2015)
5/30
Lake Erie Resur%ence
8/20/2019 Leadership Summit (August 2015)
6/30
Bualo +os New ?i%hs-A1(,((( net new @os from )('(0
*((
*'(
*)(
*1(
*2(
**(
*>(
*
8/20/2019 Leadership Summit (August 2015)
7/30
Detroit +os-A1((,((( net new @os from )('(0
'*((
'>((
'
8/20/2019 Leadership Summit (August 2015)
8/30
=onthly Pendin% "ales &nde-"easonally d@usted0
)('' ; +an)('' ; 5e)('' ; =ar)('' ; $r)('' ; =ay)('' ; +une)('' ; +uly)('' ; u%)('' ; "e$)('' ; Oct)('' ; No8)('' ; Dec)(') ; +an)(') ; 5e)('); =ar)(');$r)(') ; =ay)(') ; +une)(') ; +ul)(') ; u%)(') ; "e$)(') ; Oct)(') ; No8)(') ; Dec)('1 ; +an)('1 ; 5e)('1 ; =ar)('1 ; $r)('1 ; =ay)('1 ; +un)('1 ; +ul)('1 ; u%)('1 ; "e$)('1 ; Oct)('1 ; No8)('1 ; Dec)('2 ; +an)('2 ; 5e)('2 ; =ar)('2 ; $r)('2 ; =ay)('2 ; +un)('2 ; +ul)('2 ; u%)('2 ; "e$)('2 ; Oct)('2 ; No8)('2 ; Dec)('* ; +an)('* ; 5e)('* ; =ar)('* ; $r)('* ; =ay)('* ; +un
8/20/2019 Leadership Summit (August 2015)
9/30
"ales Chan%e y Price Points-4 chan%e from one year a%o0
;*
(
*
'(
'*
)(
)*
1(
8/20/2019 Leadership Summit (August 2015)
10/30
Distressed "ales
(
'(
)(
1(2(
*(
>(
5oreclosure "hort;"ale
8/20/2019 Leadership Summit (August 2015)
11/30
=edian ?ome Price
'((,(((
')(,(((
'2(,((('>(,(((
'(,(((
)((,(((
))(,(((
)2(,(((
)>(,(((
8/20/2019 Leadership Summit (August 2015)
12/30
Buyer !raFc Conditions
8/20/2019 Leadership Summit (August 2015)
13/30
!rade;3$ O$$ortunities
from ?ousin% EGuity
(
*(((
'((((
'*(((
)((((
)*(((
Real Estate :alue =ort%a%e Det
$ billion
8/20/2019 Leadership Summit (August 2015)
14/30
nnual ?ome "ales
(
'((((((
)((((((
1((((((
2((((((
*((((((
>((((((
8/20/2019 Leadership Summit (August 2015)
15/30
New Price BuleH
2005-2006 Bubble
• m new home sales
• !i%ht Credit and all;cash
• '.' m housin% starts
8/20/2019 Leadership Summit (August 2015)
16/30
?ome Price 5orecast for )('> /14 to *4
First Scenario
• New construction slowly
reco8er / housin% shorta%e
• Prices initially rise fast
• Chokes demand and sales fall
• ?ome $rice %rows 14 to *4
• Not Desirale
Second Scenario
• New construction roustly
reco8er / in8entory relief
• ?ome $rice %rows 14 to *4
• Demand e$ands and sales rise
• &ncrease moility and oost @os
• Desirale
8/20/2019 Leadership Summit (August 2015)
17/30
?ousin% "tarts
()((2((>((
MultifamilThousand units
(*((
'((('*((
)(((
Sin!le-famil
8/20/2019 Leadership Summit (August 2015)
18/30
=onetary Policy and5orecast
8/20/2019 Leadership Summit (August 2015)
19/30
5ed Policy and =ort%a%eRate
(
'
)
1
2
*>
<
9
=ort%a%e Rate 5ed 5unds Rate
8/20/2019 Leadership Summit (August 2015)
20/30
6hat Determines Bond YieldsH
• 5ederal Reser8eIs short;term ratechan%es
• &nJation and erosion of $urchasin% $ower
• 5orei%n ca$ital Jow and demand fordollar
• "a8in%s rate
• 3.". ud%et deKcit• Printin% of money
• /
8/20/2019 Leadership Summit (August 2015)
21/30
5ederal DeKcit ; "hrinkin%- million, ') month total0
;'>(((((
;'2(((((
;')(((((
;'((((((
;(((((
;>(((((
;2(((((
;)(((((
(
)(((((
2(((((
8/20/2019 Leadership Summit (August 2015)
22/30
5ederal Det / Cumulati8e- millionM det held y $ulic ecludin% intra;%o8ernmental holdin%s0
(
),(((,(((
2,(((,(((
>,(((,(((
,(((,(((
'(,(((,(((
'),(((,(((
'2,(((,(((
8/20/2019 Leadership Summit (August 2015)
23/30
Louis :in% of 5rance
from '
8/20/2019 Leadership Summit (August 2015)
24/30
U.S. Dollar
Reversing the Decline … Stronger and Stronger
(
9(
'((
''(')(
'1(
'2(
"ollar Stren!th #nde$ Trade Wei!hted
8/20/2019 Leadership Summit (August 2015)
25/30
6ashin%ton Risks
• !R&DH
• =ort%a%e 8ailailityH
• !a Preference Chan%esH
"tate and Local Risks
• 5oreclosure rulesH
• Eminent DomainH
• !a Preference Chan%esH
8/20/2019 Leadership Summit (August 2015)
26/30
!aylor "wift !aQ in Rhode&sland
8/20/2019 Leadership Summit (August 2015)
27/30
Commercial Real Estate
8/20/2019 Leadership Summit (August 2015)
28/30
&ommercial #n'estment Sales of (ar!e )ro*erties+)ro*erties 'alued at ,25 million and o'er.
'1(
)')
1>)
2)1
*
8/20/2019 Leadership Summit (August 2015)
29/30
'(1' Like;ind Echan%es)1 of =emers 3sed
2(4
'2424*4
1
8/20/2019 Leadership Summit (August 2015)
30/30
'(1' and Economic &m$act
Less than '(4
'(4 to )24
)*4 to 294
*(4 to '((4
7reater than '((4
Not a$$lica,le
'>4
**4
'>4
*4
'4