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WHERE ARE THE NEW HOUSES? NOT IN THE PIPELINE! Presented by: Elliot F. Eisenberg, Ph.D. President: GraphsandLaughs, LLC January 26, 2017 Orlando, FL
The Economy is Stable! GDP = C+I+G+(X-M)
Rising Rates!
Import Prices for all Commodities: Inflation!! Rising nicely, but largely due to energy price increases
Producer Prices Show Signs of Inflation!!
Consumer Price Index: Inflation is Up a Bit Headline inflation is rising due to energy but Core is largely flat.
Core PCE Price Index: Inflation is Rising! It s due to rising wages, a weakening dollar and rising energy prices.
Inflation Expectations are Way Up of Late! 5 year and 10 year breakeven rates
Federal Reserve Behavior Rates Will Rise. But, How Fast?
Federal Reserve Behavior Fed funds is 0.625% 12/31/17: 1.375% 10-yr Treasury @ 2.60% 12/31/18: 2.125% 10-yr Treasury @ 3.10% 12/31/19: 2.875% Hike in June? Lots of Trump Uncertainty!
Home Equity Lines of Credit are Back in Fashion! Volume is double what is was at the trough in 09-10- 11.
Housing? It s Improving but In Fits and Starts!
Residential Fixed Investment Slowly Rises! Up 3.4% Y-o-Y. Non-residential up 1%, public down 12% and residential down 31% from peaks
Household Formation is on the Move But, it is all due to renter households. This should change.
Student Debt Payments are Not That High Median payment is $200/month while the average is $350/month
Change in Wealth by Median Household 2003-2013 Credit Source: Russell Sage Foundation
Credit is Generally Very Hard to Get It is getting easier, but very slowly.
New Home Prices Are Too High Due to Regulation
Y-o-Y Percent Change in Hourly Earnings
Changes in Median Wage Growth Looks Good! Looks only at those continuously full-time employed
Months of Existing Home Inventory is Falling!
New Home Inventories Fell Fast and Now What? Was moving towards normalcy but is now reversing!
Apartment Vacancy Rates The MF cycle has probably turned. Rental vacancy rates are starting to level off.
Single-family Rental Increases Very large increases resulting from huge increases in demand
Price Growth is Very Fast Prices rise faster than wages! Y-o-Y prices up 4.3% 5.1% or 5.6% depending on the measure
Bigger Houses Continue to Get Built
To Many Big Houses
Builders Are Happier, But Is This As Good As It Gets? Builders have rarely been happier
Single-Family and Multifamily Starts A Nice Recovery Lack of lots, gun shy lenders, high prices, higher rates, SF looks good
Single-Family Starts by Region The South is clearly the best region
Cash Sales are Down from Peak Cash sales were 31.7% in 9/16, down 130 BP Y-o-Y. Resales are 80% of all sales. Historically cash sales are 25%. Peak was 46.5% in 1/11. Return to normal by 2019.
Negative Equity is Less and Less of a Problem Percent of loans in negative equity situation
Delinquencies & Foreclosures Continue Falling 30 and 60 day delinquencies are below normal!
REO Inventory Held by Banks is Declining too!
The U.S. Home Ownership Rate Has Bottomed? Demographic changes should start pushing it up
What About Things Here?
The Future Looks Better than the Present
State Unemployment Rates Significant differences exist: However, unemployment is below 7% everywhere!
Let s Do this Without A Lawyer, Thank You! Foreclosure inventory is 1% of homes with mortgage, still double the historic average.
Housing Starts in Miami-Fort Lauderdale Single-family is listless, Multifamily is super strong and holding.
Housing Starts in Tampa-St Petersburg Single-family is rising, multifamily is very strong and is strengthening.
Housing Starts in Orlando-Kissimmee Single-family steadily strengthens. Multifamily is strong and solid.
Housing Starts in Jacksonville Single-family is plateauing, multifamily looks to be strengthening.
Housing Starts in Bradenton-Sarasota Single-family plateaued in 2016, multifamily is gaining strength
Housing Starts in Cape Coral-Fort Myers Holy Cow! Single-family grows slowly, multifamily is generally improving.
Housing Starts in Naples-Marco Island Single-family is largely flat, Multifamily is also flat.
ANY QUESTIONS? Elliot F. Eisenberg, Ph.D. Cell: 202.306.2731 elliot@graphsandlaughs.net www.econ70.com Do you want to get my daily 70 word economics email? Please give me your business card or text bowtie to 22828 Thank YOU all very very much! @ECON70