April 4, 2017 2 p.m. Eastern Worldwide ERC would like to thank today s sponsor: 2017 Worldwide ERC
Tips and Tools for Understanding the U.S. Real Estate Market, and Its Impact on Your Relocation Program Presented by Tom Lacey; Director, Real Estate Services, Cartus Anthony Cristaudo; Director, Business Development, Cartus Home Loans 2017 Worldwide ERC
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Today s Presenters Tom Lacey Director, Real Estate Services Cartus Anthony Cristaudo Director, Business Development Cartus Home Loans
Real Estate Market Snapshot Median Home Price Unemployment Underwater First-time Buyers Listing Inventory Total Sales Median Home Price: $234,900 Up 5.1% YOY Unemployment: 4.8% October 2009: 10% at peak Percentage of underwater homes: 10% 2010: 27.3% at peak Percentage of firsttime buyers: 33% Typically represents 40% Months of listing inventory: 4.9 months 6 month s supply equals a balanced market Total home sales: 5.61 million seasonally adjusted Up 1.9% YOY Source: RealtyTrac; Zillow; NAR; Bureau of Labor
United States Job Growth 500 8.7 Million Jobs Lost Payroll changes 000 s 300 100-100 -300-500 -700-900 13 Million Jobs Recovered Source: US Census Bureau
Overall Market Indicators are all positive Job growth is strong Home sale programs affected by value increases/lower inventory Growth vs. income
National Rental Rates TOP10 1 BEDROOM MEDIAN RENT PRICES West Coast 1. San Francisco, CA 4. San Jose, CA 5. Oakland, CA 7. Los Angeles, CA 10. Seattle, WA North East 2. New York, NY 3. Boston, MA 6. Washington, DC January 2017 Midwest 8. Chicago, IL South 9. Miami, FL Source: Zumper
Rental Rates & Vacancies Surplus/Shortage of Vacant Homes Numbers in Millions Source: Freddie Mac
Rental Rates & Vacancies Transferee Challenges Extremely low inventory levels Cost benefits of owning vs. renting Low supply will drive increased rents Assistance may be needed
Student Loan Debt
Student Debt & The Market 70% more students are getting loans Tripled in size in the last decade to $1.3 trillion Typical student taking on twice as much debt First time homebuyers historically average 40% of the market Source: CFPB
Student Debt & The Market Age 60 and older with Student Debt 3.5 Number of Borrowers (in Millions) 3 2.5 2 1.5 1 0.5 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: CFPB
First-Time Homebuyers What does this mean for your transferees? Most states are below the 40% first time homebuyers Student debt
Mortgage Delinquency Rate 9 8 7 Historical Average below 2% Great Recession Percent # of Loans 6 5 4 3 2 1 0 1953 1963 1973 1985 1995 2005 2016 Mortgage Delinquency rate Source: Corelogic
Home Price Performance by State Q4 2015 Q4 2016 United States 7% Source: Freddie Mac
Top 10 Hottest Suburbs Source: NAR 20
Housing Supply & Demand Levels have shifted Sellers market (six months or less) Limited supply will affect values Corporate inventory
Forecasted Home Price by State 2017 Projections Source: Corelogic
Portland- Vancouver Price: 6.6% Sales Growth: 5.0% 2017 Projected Top 10 Metros 3 Boston- Cambridge Price: 6.1% Sales Growth: 6.3% Sacramento- Roseville Price: 7.2% Sales Growth: 4.9% 1 4 Raleigh Los Angeles- Anaheim 2 8 10 Price: 4.2% Sales Growth: 7.6% Price: 6.9% Sales Growth: 6.0% 6 5 Jacksonville Riverside- San Bernardino 7 9 Price: 5.7% Sales Growth: 6.1% Price: 5.7% Sales Growth: 6.9% Phoenix-Mesa- Scottsdale Price: 5.9% Sales Growth: 7.2% Tucson Price: 6.1% Sales Growth: 5.5% Orlando- Kissimmee Price: 5.6% Sales Growth: 6.1%
Forecasted Appreciation CUMULATIVE APPRECIATION BY 2021 35 30 30.8 25 20 21.4 15 10 10.2 5 0 Bulls All Projections Bears Source: Home Price Expectation Survey
Interest Rates & Fed Funds Rate Recession Year Recession Years 9 8 7 6 5 4 3 2 1 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 Mortgage Rate Fed Funds Rate Source: NAR
Interest Rates Forecast Affordability Incentives
2017 Housing Market Temperatures 0 2 4 6 8 10 Existing Home Sales to 5.46M 1.9% 0 2 4 6 8 10 Overall Price Appreciation 3.9% 0 2 4 6 8 10 Home Ownership Rate from 62.9 to 63.5% 0.6% 0 2 4 6 8 10 26 Markets to see 1% or more Appreciation 1.0% 0 2 4 6 8 10 New Home Sales 10% 0 2 4 6 8 10 100 Mkts Listing Inventory as dropped 11% New Home Sales 11% 0 2 4 6 8 10 New Home Starts 3.0% 0 2 4 6 8 10 Mortgage Rates to jump from 3.5% to 4.5% 4.5% Source: NAR 2
2017 Trends That Could Reshape Housing 33% Millennials. 30% Baby Boomers Expected to fuel demand for at least the next decade in the housing market. o Millennials expected to make up 33 percent of buyers. o Baby boomers expected to make up 30 percent of buyers. Midwest 15 / 19 Strong Affordability Midwestern cities will get more attention from millennials GO WEST! Western markets continue to dominate top housing markets list The following metros have an average millennial market share of 42 percent or higher: Madison, Wis.; Columbus, Ohio; Omaha, Neb.; Des Moines, Iowa; and Minneapolis, Minn. Source: FHFA, NAR
2017 Trends That Could Reshape Housing Better Affordability Rental affordability will Smaller House Cities will focus on denser Public Transportation A new focus on housing Driving To Work The % of people who drive to improve as incomes rise and growth in rents slows development of smaller homes close to public transit and urban centers work will rise for the first time in a decade Source: Zillow
2017 Policy Discussion Needs vs. cost Culture changes Multiple policy types
Questions & Answers
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