Lawrence yun dbor power point presentation oct 27 2016
- 1. Economic and Real Estate Outlook By Lawrence Yun, Ph.D. Chief Economist, National Association of REALTORS® Presentation at Darien Board of REALTORS® Darien, CT October 27, 2016
- 2. Lifetime Wealth at near All-Time High 0 10000 20000 30000 40000 50000 60000 70000 80000 90000 100000 1990-Q1 1991-Q1 1992-Q1 1993-Q1 1994-Q1 1995-Q1 1996-Q1 1997-Q1 1998-Q1 1999-Q1 2000-Q1 2001-Q1 2002-Q1 2003-Q1 2004-Q1 2005-Q1 2006-Q1 2007-Q1 2008-Q1 2009-Q1 2010-Q1 2011-Q1 2012-Q1 2013-Q1 2014-Q1 2015-Q1 2016-Q1 $ billion
- 3. Median Household Income (Inflation Adjusted) $50,000 $51,000 $52,000 $53,000 $54,000 $55,000 $56,000 $57,000 $58,000 $59,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
- 4. Annual GDP … Below 3% for 11 straight years -4 -2 0 2 4 6 8 10 1950 1952 1954 1956 1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 GDP Annual Growth Rate
- 5. Sluggish GDP and Gap after Recession ($2.5 trillion gap … $7,000 per person) 10000 11000 12000 13000 14000 15000 16000 17000 18000 19000 20000 2000-Q1 2000-Q3 2001-Q1 2001-Q3 2002-Q1 2002-Q3 2003-Q1 2003-Q3 2004-Q1 2004-Q3 2005-Q1 2005-Q3 2006-Q1 2006-Q3 2007-Q1 2007-Q3 2008-Q1 2008-Q3 2009-Q1 2009-Q3 2010-Q1 2010-Q3 2011-Q1 2011-Q3 2012-Q1 2012-Q3 2013-Q1 2013-Q3 2014-Q1 2014-Q3 2015-Q1 2015-Q3 $ billion 3% Growth Line Slow 2% Growth Line
- 6. Sluggish Business Spending Despite High Profit 0 500 1000 1500 2000 2500 Profits Business Spending
- 7. Jobs (8 million lost … 15 million gained) 120,000 125,000 130,000 135,000 140,000 145,000 150,000 2000-Jan 2000-Jul 2001-Jan 2001-Jul 2002-Jan 2002-Jul 2003-Jan 2003-Jul 2004-Jan 2004-Jul 2005-Jan 2005-Jul 2006-Jan 2006-Jul 2007-Jan 2007-Jul 2008-Jan 2008-Jul 2009-Jan 2009-Jul 2010-Jan 2010-Jul 2011-Jan 2011-Jul 2012-Jan 2012-Jul 2013-Jan 2013-Jul 2014-Jan 2014-Jul 2015-Jan 2015-Jul 2016-Jan In thousands
- 8. Unemployment Rate vs. Employment Rate 0 2 4 6 8 10 12 2000 - Jan 2002 - Jan 2004 - Jan 2006 - Jan 2008 - Jan 2010 - Jan 2012 - Jan 2014 - Jan 2016 - Jan Unemployment Rate 54 56 58 60 62 64 66 2000 - Jan 2002 - Jan 2004 - Jan 2006 - Jan 2008 - Jan 2010 - Jan 2012 - Jan 2014 - Jan 2016 - Jan Employment Rate
- 11. Jobs in New Haven 250 255 260 265 270 275 280 285 290 2000-Jan 2000-Jul 2001-Jan 2001-Jul 2002-Jan 2002-Jul 2003-Jan 2003-Jul 2004-Jan 2004-Jul 2005-Jan 2005-Jul 2006-Jan 2006-Jul 2007-Jan 2007-Jul 2008-Jan 2008-Jul 2009-Jan 2009-Jul 2010-Jan 2010-Jul 2011-Jan 2011-Jul 2012-Jan 2012-Jul 2013-Jan 2013-Jul 2014-Jan 2014-Jul 2015-Jan 2015-Jul 2016-Jan 2016-Jul
- 12. Jobs in Norwich-New London 100 105 110 115 120 125 130 135 140 145 2000-Jan 2000-Jul 2001-Jan 2001-Jul 2002-Jan 2002-Jul 2003-Jan 2003-Jul 2004-Jan 2004-Jul 2005-Jan 2005-Jul 2006-Jan 2006-Jul 2007-Jan 2007-Jul 2008-Jan 2008-Jul 2009-Jan 2009-Jul 2010-Jan 2010-Jul 2011-Jan 2011-Jul 2012-Jan 2012-Jul 2013-Jan 2013-Jul 2014-Jan 2014-Jul 2015-Jan 2015-Jul 2016-Jan 2016-Jul
- 14. Jobs in NYC metro 8000 8200 8400 8600 8800 9000 9200 9400 9600 9800 2000-Jan 2000-Jul 2001-Jan 2001-Jul 2002-Jan 2002-Jul 2003-Jan 2003-Jul 2004-Jan 2004-Jul 2005-Jan 2005-Jul 2006-Jan 2006-Jul 2007-Jan 2007-Jul 2008-Jan 2008-Jul 2009-Jan 2009-Jul 2010-Jan 2010-Jul 2011-Jan 2011-Jul 2012-Jan 2012-Jul 2013-Jan 2013-Jul 2014-Jan 2014-Jul 2015-Jan 2015-Jul 2016-Jan 2016-Jul
- 15. No CPI Inflation – Yet -3 -2 -1 0 1 2 3 4 5 6 2000-Jan 2000-May 2000-Sep 2001-Jan 2001-May 2001-Sep 2002-Jan 2002-May 2002-Sep 2003-Jan 2003-May 2003-Sep 2004-Jan 2004-May 2004-Sep 2005-Jan 2005-May 2005-Sep 2006-Jan 2006-May 2006-Sep 2007-Jan 2007-May 2007-Sep 2008-Jan 2008-May 2008-Sep 2009-Jan 2009-May 2009-Sep 2010-Jan 2010-May 2010-Sep 2011-Jan 2011-May 2011-Sep 2012-Jan 2012-May 2012-Sep 2013-Jan 2013-May 2013-Sep 2014-Jan 2014-May 2014-Sep 2015-Jan 2015-May
- 16. Renting Painful Rents Rising at 7-year high -1 0 1 2 3 4 5 Renters' Rent
- 17. National Home Sales Rising 0 1000000 2000000 3000000 4000000 5000000 6000000 7000000 8000000 9000000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 New Existing
- 18. CT Housing Stats • Home Sales … up 9% in August, from a year ago • Price … no meaningful change
- 19. CT Metro Home Price Index 100 120 140 160 180 200 220 240 260 1995-Q1 1995-Q4 1996-Q3 1997-Q2 1998-Q1 1998-Q4 1999-Q3 2000-Q2 2001-Q1 2001-Q4 2002-Q3 2003-Q2 2004-Q1 2004-Q4 2005-Q3 2006-Q2 2007-Q1 2007-Q4 2008-Q3 2009-Q2 2010-Q1 2010-Q4 2011-Q3 2012-Q2 2013-Q1 2013-Q4 2014-Q3 2015-Q2 2016-Q1 Stamford New Haven
- 20. Rising Home Price and Rising Housing Wealth 0 5000 10000 15000 20000 25000 2000-Q1 2000-Q3 2001-Q1 2001-Q3 2002-Q1 2002-Q3 2003-Q1 2003-Q3 2004-Q1 2004-Q3 2005-Q1 2005-Q3 2006-Q1 2006-Q3 2007-Q1 2007-Q3 2008-Q1 2008-Q3 2009-Q1 2009-Q3 2010-Q1 2010-Q3 2011-Q1 2011-Q3 2012-Q1 2012-Q3 2013-Q1 2013-Q3 2014-Q1 2014-Q3 2015-Q1 2015-Q3 Real Estate Value Mortgage Debt $ billion
- 21. Homeownership Rate Near 50-year low 60 61 62 63 64 65 66 67 68 69 70 1965 - Q1 1968 - Q1 1971 - Q1 1974 - Q1 1977 - Q1 1980 - Q1 1983 - Q1 1986 - Q1 1989 - Q1 1992 - Q1 1995 - Q1 1998 - Q1 2001 - Q1 2004 - Q1 2007 - Q1 2010 - Q1 2013 - Q1 2016 - Q1
- 22. Younger Households Less Likely to Own a Home 0% 20% 40% 60% 80% 100% 34 and younger 65 and older Homeownership Rate 2004 (Peak) 2016Q1 Source: Census Bureau
- 23. Median net worth of households headed by… Wealth Gap Between Young Adults (under-35) and Retiree (65+) in 1983 and 2013 $0 $50,000 $100,000 $150,000 $200,000 $250,000 1983 2013
- 24. Student Loan … NAR-ASA Study implies 5 year Delay (in $billion) 0 200 400 600 800 1000 1200 1400 2006 - Q1 2006 - Q3 2007 - Q1 2007 - Q3 2008 - Q1 2008 - Q3 2009 - Q1 2009 - Q3 2010 - Q1 2010 - Q3 2011 - Q1 2011 - Q3 2012 - Q1 2012 - Q3 2013 - Q1 2013 - Q3 2014 - Q1 2014 - Q3 2015 - Q1 2015 - Q3
- 25. Consumer Price Index over the Long Haul 0 100 200 300 400 500 600 700 800 900 1983 - Jul 1985 - Jul 1987 - Jul 1989 - Jul 1991 - Jul 1993 - Jul 1995 - Jul 1997 - Jul 1999 - Jul 2001 - Jul 2003 - Jul 2005 - Jul 2007 - Jul 2009 - Jul 2011 - Jul 2013 - Jul 2015 - Jul Tuition Medical Rent CPI
- 26. Social Benefits to Homeownership • Higher student test score • Lower juvenile delinquency rate • Better health outcome and higher self-esteem from having a sense of control in life • Increased charitable donations and volunteering • Local civic engagement • Terrible social results if foreclosure … therefore need sustainable homeownership
- 27. Barrack “Real Estate Market is Getting Bubblicious”
- 28. National Pending Sales Index (Seasonally Adjusted) 70.0 75.0 80.0 85.0 90.0 95.0 100.0 105.0 110.0 115.0 120.0 2011-Jan 2011-Mar 2011-May 2011-July 2011-Sep 2011-Nov 2012-Jan 2012-Mar 2012-May 2012-Jul 2012-Sep 2012-Nov 2013-Jan 2013-Mar 2013-May 2013-Jul 2013-Sep 2013-Nov 2014-Jan 2014-Mar 2014-May 2014-Jul 2014-Sep 2014-Nov 2015-Jan 2015-Mar 2015-May 2015-Jul 2015-Sep 2015-Nov 2016-Jan 2016-Mar 2016-May 2016-Jul Source: NAR
- 29. Foot Traffic (Lockbox openings - below 50 Reading for 3 straight months)
- 31. Inventory of Homes per Households (currently 1.5 homes for 100 households) 1.0 1.5 2.0 2.5 3.0 3.5 4.0 2000 - Jan 2001 - Jan 2002 - Jan 2003 - Jan 2004 - Jan 2005 - Jan 2006 - Jan 2007 - Jan 2008 - Jan 2009 - Jan 2010 - Jan 2011 - Jan 2012 - Jan 2013 - Jan 2014 - Jan 2015 - Jan 2016 - Jan
- 32. Single-family Housing Starts – Grossly Inadequate Thousand units 0 200 400 600 800 1000 1200 1400 1600 1800 2000 2000 - Jan 2001 - Jan 2002 - Jan 2003 - Jan 2004 - Jan 2005 - Jan 2006 - Jan 2007 - Jan 2008 - Jan 2009 - Jan 2010 - Jan 2011 - Jan 2012 - Jan 2013 - Jan 2014 - Jan 2015 - Jan 2016 - Jan
- 33. Borrowers Not Defaulting (Serious Delinquency Rate) 0.0 2.0 4.0 6.0 8.0 10.0 12.0 2005-Q1 2005-Q2 2005-Q3 2005-Q4 2006-Q1 2006-Q2 2006-Q3 2006-Q4 2007-Q1 2007-Q2 2007-Q3 2007-Q4 2008-Q1 2008-Q2 2008-Q3 2008-Q4 2009-Q1 2009-Q2 2009-Q3 2009-Q4 2010-Q1 2010-Q2 2010-Q3 2010-Q4 2011-Q1 2011-Q2 2011-Q3 2011-Q4 2012-Q1 2012-Q2 2012-Q3 2012-Q4 2013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q1 2014-Q2 2014-Q3 2014-Q4 2015-Q1 2015-Q2 2015-Q3 2015-Q4 2016-Q1 2016-Q2 U.S. All Mortgages Veterans Affairs Mortgages CT Mortgages
- 34. Commercial Property Price may be Bubblish 0 50 100 150 200 250 300 2000-Q1 2000-Q3 2001-Q1 2001-Q3 2002-Q1 2002-Q3 2003-Q1 2003-Q3 2004-Q1 2004-Q3 2005-Q1 2005-Q3 2006-Q1 2006-Q3 2007-Q1 2007-Q3 2008-Q1 2008-Q3 2009-Q1 2009-Q3 2010-Q1 2010-Q3 2011-Q1 2011-Q3 2012-Q1 2012-Q3 2013-Q1 2013-Q3 2014-Q1 2014-Q3 2015-Q1 2015-Q3 2016-Q1 Source: Federal Reserve
- 35. Rising Cap Rates and Commercial Real Estate Prices • Steady prices in mid-tier markets • Price drops in trophy properties – Green Street price index could fall 4% to 8% over the next two years
- 36. Fed Rate Hike in December ‘15 Next hike in December ‘16? then again in …
- 37. Fed Policy and Mortgage Rate 0 1 2 3 4 5 6 7 8 9 2000-Jan 2000-Jul 2001-Jan 2001-Jul 2002-Jan 2002-Jul 2003-Jan 2003-Jul 2004-Jan 2004-Jul 2005-Jan 2005-Jul 2006-Jan 2006-Jul 2007-Jan 2007-Jul 2008-Jan 2008-Jul 2009-Jan 2009-Jul 2010-Jan 2010-Jul 2011-Jan 2011-Jul 2012-Jan 2012-Jul 2013-Jan 2013-Jul 2014-Jan 2014-Jul 2015-Jan 2015-Jul 2016-Jan Mortgage Rate Fed Funds Rate
- 38. Forecast
- 39. Normal vs. Now 2000 (Likely Normal) 2015 Existing Home Sales 5.2 million 5.2 million New Home Sales 900,000 500,000 Population 282 million 320 million Jobs 132 million 144 million Total U.S. Household Wealth $44 trillion $85 trillion
- 40. Economic Forecast 2014 2015 2016 Forecast 2017 Forecast GDP Growth 2.6% 2.1% 1.6% 2.2% Job Growth +3.0 million +2.6 million +2.0 million +2.2 million CPI Inflation 1.6% 0.3% 1.4% 2.7%
- 41. Housing Forecast 2014 2015 2016 Forecast 2017 Forecast New Home Sales 437,000 500,000 540,000 600,000 Existing Home Sales 4.9 million 5.3 million 5.4 million 5.5 million Median Price Growth + 5.7% + 6.8% +4.5% 3.2% 30-year Rate 4.2% 3.9% 3.7% 4.1%
- 42. Commercial Real Estate Forecast 2016-2017 Vacancy Rent Apartment From 4.7% to 5.0% 3.5% per year Office From 13% to 12% 4% per year Industrial Stable at near 9% 4% per year Retail Stable at near 11% 2% per year
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