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Economic and Housing Market
Trends and Outlook
Jed Smith
Managing Director, Quantitative Research
NATIONAL ASSOCIATION OF REALTORS®
North Carolina Real Estate Summit
Embassy Suites, Cary, North Carolina
July 16, 2013
The Outlook: Forecast
Slow Economic Expansion
2011 2012 2013
Forecast
2014
Forecast
GDP Growth +1.8% +2.1% +1.8% 2.7%
Existing Home
Sales
4.3 million 4.7 million 5.0 million 5.2 million
Housing Starts 610 K 780 K 1.0 million 1.25 million
Existing Home
Price Growth
- 4% + 6% + 8% + 5%
30-yr Mortgage
Rate
4.7% 3.7% 4.0% 4.7%
“It Was the Best Of Times, and the Worst of Times”
Index Continues Below 100: Expansion Slow, Weaker than Normal
Conference Board: Consumer Confidence
SA, 1985=100
100500959085
Source: The Conference Board 07/02/13
150
125
100
75
50
25
150
125
100
75
50
25
“It Was the Best Of Times, and the Worst of Times”
Levels of Uncertainty Higher than Normal
Economy: Slower/Weaker Expansion
Economic Policy Uncertainty Index
1985-09=100
100500959085
Source: PolicyUncertainty.com 07/02/13
250
200
150
100
50
250
200
150
100
50
U.S. Total Payroll Jobs
Labor Force Participation Rate Down 3 Percent
11.8 Million Unemployed
124000
126000
128000
130000
132000
134000
136000
138000
140000
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-May
In thousands
Employment: The Major Issues
Unemployed, 16 Years & Over: 16 yr +
SA, Thous
100500959085
Source: Bureau of Labor Statistics 07/02/13
16000
14000
12000
10000
8000
6000
4000
16000
14000
12000
10000
8000
6000
4000
• Employment Lower than
Normal.
• Unemployment Duration:
Higher than Normal.
• Job Creation is Lagging.
• It’s Hard to Find a Job!
• Housing Market
Expanding, But Could do
Better.
• Good News—But Still
Underperforming.
Housing Outlook: Annual Existing Home Sales
Good News: Impending Multiyear Growth
7.08
6.52
5.02
4.12 4.34 4.18 4.26
4.66
5.00 5.22
5.7
0
1
2
3
4
5
6
7
8
2005
2006
2007
2008
2009
2010
2011
2012
2013f
2014f
2015f
In million units
Housing Outlook: Home Prices Still Reasonable
Market is Recovering—A Function of Jobs.
Affordability Good, but Credit Availability Needs to Ease.
0
50000
100000
150000
200000
250000
2000-Jan
2000-Sep
2001-May
2002-Jan
2002-Sep
2003-May
2004-Jan
2004-Sep
2005-May
2006-Jan
2006-Sep
2007-May
2008-Jan
2008-Sep
2009-May
2010-Jan
2010-Sep
2011-May
2012-Jan
2012-Sep
may
2014-Jan
sept
Existing Home Prices
Actual and Forecast
Home Prices, Monthly Forecast, Annual
Housing Outlook: Affordability
0
50
100
150
200
250
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
Affordability
Housing Outlook: Pending Home Sales
Seasonally Adjusted 2001 = 100; Tax Credit Blips in 2010
0
20
40
60
80
100
120
140
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
Economic and Housing Market Trends and Outlook
Economic and Housing Market Trends and Outlook
Housing Outlook
Low Inventories
0
2
4
6
8
10
12
14
2000-Jan
2000-Aug
2001-Mar
2001-Oct
2002-May
2002-Dec
2003-Jul
2004-Feb
2004-Sep
2005-Apr
2005-Nov
2006-Jun
2007-Jan
2007-Aug
2008-Mar
2008-Oct
2009-May
2009-Dec
2010-Jul
2011-Feb
2011-Sep
2012-Apr
2012-Nov
Months Supply of Housing
EHS Months Supply New SF Homes
Housing Recovery—Why Sustainable?
Housing Starts Requirement
• 1.1 million household formation.
• 0.3 million demolition and uninhabitable.
(Implicitly assumes depreciation rate of more than 200
years)
• 0.2 million net new vacation home demand.
• Total New Housing Need = 1.6 million each
year.
Housing Recovery—Why Sustainable?
Household Formation Accelerating After Great Recession
(in millions)
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00
Housing Recovery—Why Sustainable?
Quantifying Housing Shortage
(2001 to 2012)
Household
Formation
Demolition New Vacation
Home
Housing
Starts
11.0 million 3.6 million 2.0 million 15.7 million
16.6 million 15.7 million
This housing shortage imbalance could grow because
(1) Household Formation will exceed 1 million in 2013 and beyond
(2) Housing Starts need to be 1.5 million per year … Not there in 2013
Housing Recovery—Why Sustainable?
Housing Starts: Long Term Demand Greater than Supply
0
500
1000
1500
2000
2500
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
multifamily single-family
Thousand units (annualized)
Long-term Average
Housing Recovery—Why Sustainable?
Existing vs. New Home Prices … Big Gap
(single-family homes)
0
50000
100000
150000
200000
250000
300000
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
New
Existing
Number of “Qualified” Renters
(credit scores unknown and not factored)
Year Income Needed to
Buy a Median
Priced Home
Number of Renters
with necessary
income
Share of Renters
Qualified
2000 $40,300 11.8 million 33%
2005 $50,400 9.0 million 24%
2012 $31,700 20.1 million 51%
If the year 2000 is considered as normal, then 11.8 million renters had
the income to buy a median priced home but chose not to.
In 2012 there are about 8 million more renters with the necessary
income but choosing not to be or are unable to be a homeowner.
Economic and Housing Market Trends and Outlook
Price Expectations--Next 12 Months
Source: REALTOR® Survey
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
200810
200901
200904
200907
200910
201001
201004
201007
201010
201101
201104
201107
201110
201201
201204
201207
201210
201301
Constant/Rising Prices
Falling Prices
Price Expectations for Next 12 Months
As Reported by REALTORS®
Summary of Outlook: Where Are We Headed?
• Likely Multiyear Housing Recovery.
– No Recession but Slow Economy.
– Continued Job Growth and Household Formation.
– Lagging Housing Starts and Continuing Housing
Shortage.
• Home prices are primed to rise further, by 13%
cumulatively in 2013 and 2014.
• Smooth Sailing Right Now—But Would be Better
with Increased Credit Availability and Job
Creation.
• But There are Major Risks.
Risks to Forecast—Housing Related
• Upside Uncertainties … Credit Availability
– Housing recovery so far even with tight credit
– What happens if mortgage accessibility opens up?
• Downside … Washington Housing Policies
– Rising g-fees and FHA insurance premiums
– QRM 20% down payment requirement?
– Basel 3 … capital rule that punishes private mortgage
with low down payment and commercial loans
– Trim mortgage interest deduction?
– Capital gains tax on home sale?
Credit Risks--Ready to Open Credit?
(Average Credit Scores of Approved Loans)
Normal 2009 to 2012 If Normal
Fannie 720 760 to 770 720
Freddie 720 760 to 770 720
FHA 650 680 to 700 660
15% to 20% Higher Sales
Possible if Normal Conditions
Economic and Housing Market Trends and Outlook
Downside Risk: Mortgage Investor Rights
–Court system clogging the foreclosure
process
–Eminent Domain to take mortgages out of
investors’ hands? (In order to restructure
mortgages)
Downside Risk: Aging Baby Boomers
(Live Births per 1000 population in U.S.)
0
5
10
15
20
25
30
35
Baby Boomers … now aged 49 to 68 …
Mix, Preferences, Millennial Buying Power
Downside Risk: Student College Debt
Important Issues: Are Colleges Effective, Are Expectations Realistic?
($ trillion)
0.0
0.2
0.4
0.6
0.8
1.0
1.2
2003 -
Q1
2004 -
Q1
2005 -
Q1
2006 -
Q1
2007 -
Q1
2008 -
Q1
2009 -
Q1
2010 -
Q1
2011 -
Q1
2012 -
Q1
Downside Risk: GDP Growth … Unimpressive
How Fragile is the Recovery?
Housing, Quantitative Easing, Other
-6
-4
-2
0
2
4
6
8
10
1960-Q1
1962-Q2
1964-Q3
1966-Q4
1969-Q1
1971-Q2
1973-Q3
1975-Q4
1978-Q1
1980-Q2
1982-Q3
1984-Q4
1987-Q1
1989-Q2
1991-Q3
1993-Q4
1996-Q1
1998-Q2
2000-Q3
2002-Q4
2005-Q1
2007-Q2
2009-Q3
2011-Q4
GDP Growth
Percent Change, Year to Year, Constant Dollars
North Carolina Outlook
Employment Tracks National Trends
3500
3600
3700
3800
3900
4000
4100
4200
4300
124000
126000
128000
130000
132000
134000
136000
138000
140000
2000 -
Jan
2002 -
Jan
2004 -
Jan
2006 -
Jan
2008 -
Jan
2010 -
Jan
2012 -
Jan
Employment, Establishment Data
U.S. North Carolina
North Carolina Outlook
Building Permits: Recovering
0
2000
4000
6000
8000
10000
12000
0
50000
100000
150000
200000
250000
2000-Jan
2000-Sep
2001-May
2002-Jan
2002-Sep
2003-May
2004-Jan
2004-Sep
2005-May
2006-Jan
2006-Sep
2007-May
2008-Jan
2008-Sep
2009-May
2010-Jan
2010-Sep
2011-May
2012-Jan
2012-Sep
Authorized Building Permits
U.S. North Carolina
North Carolina Outlook
Percent of Mortgages Past Due
0
2
4
6
8
10
12
Past Due Mortgages
U.S. North Carolina
North Carolina Outlook
Indexes of Coincident Indicators
0
20
40
60
80
100
120
140
160
180
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
Index of Coincident Economic Indicators
North Carolina US
North Carolina Outlook
North Carolina Unemployment Rate Slightly Higher than Nation as a Whole
0
2
4
6
8
10
12
2000-Jan
2000-Aug
2001-Mar
2001-Oct
2002-May
2002-Dec
2003-Jul
2004-Feb
2004-Sep
2005-Apr
2005-Nov
2006-Jun
2007-Jan
2007-Aug
2008-Mar
2008-Oct
2009-May
2009-Dec
2010-Jul
2011-Feb
2011-Sep
2012-Apr
2012-Nov
Unemployment Rates
U.S. North Carolina
North Carolina Outlook
Home Prices Have Stabilized
0
50
100
150
200
250
300
350
400
FHFA Home Price Index
U.S. North Carolina
Community Leaders—Thought Leadership
• Thought Leadership: People Look to Leaders
for Ideas on Important Topics.
• Short Term—Recovery is Proceeding Nicely.
• Longer Term—There are Major Problems.
• The “Longer Term” Could be a Year or Two.
– Problems are not Certainties.
– But Problems Need to be Addressed.
– And Can Show Up as a Surprise.
Major Economic Risks: Problems Not to be Ignored.
For Now—Smooth Sailing. Longer Run—Avoid Surprises.
Problems: just ignored.
• Budget Deficit.
• Quantitative Easing.
• Home Ownership Levels.
• Entitlements: Social Security, Medical
Care, Disability, Social Welfare
Programs.
• State/Local Government Finances.
• Labor Force Issues.
• Student Loans.
• Generational Split.
• Income Distribution.
• Lack of Growth.
• Regulation.
• Divisive Rancor.
The iceberg: just ignored.
• Photographed morning April 15, 1912…smear of red
paint along the base of the berg, indication that it had
collided with a ship sometime in the previous twelve
hours.
NAR Research—On Line
• Twitter: https://twitter.com/NAR_Research
• Blog: http://economistsoutlook.blogs.realtor.org/
• NAR Research Page http://www.realtor.org/research-and-statistics
• NAR Housing Statistics
– http://www.realtor.org/research-and-statistics/housing-statistics
• Research Reports
– http://www.realtor.org/research-and-statistics/housing-statistics
• NAR Commercial Reports
– http://www.realtor.org/research-and-statistics/research-
reports/commercial-real-estate

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Economic and Housing Market Trends and Outlook

  • 1. Economic and Housing Market Trends and Outlook Jed Smith Managing Director, Quantitative Research NATIONAL ASSOCIATION OF REALTORS® North Carolina Real Estate Summit Embassy Suites, Cary, North Carolina July 16, 2013
  • 2. The Outlook: Forecast Slow Economic Expansion 2011 2012 2013 Forecast 2014 Forecast GDP Growth +1.8% +2.1% +1.8% 2.7% Existing Home Sales 4.3 million 4.7 million 5.0 million 5.2 million Housing Starts 610 K 780 K 1.0 million 1.25 million Existing Home Price Growth - 4% + 6% + 8% + 5% 30-yr Mortgage Rate 4.7% 3.7% 4.0% 4.7%
  • 3. “It Was the Best Of Times, and the Worst of Times” Index Continues Below 100: Expansion Slow, Weaker than Normal Conference Board: Consumer Confidence SA, 1985=100 100500959085 Source: The Conference Board 07/02/13 150 125 100 75 50 25 150 125 100 75 50 25
  • 4. “It Was the Best Of Times, and the Worst of Times” Levels of Uncertainty Higher than Normal Economy: Slower/Weaker Expansion Economic Policy Uncertainty Index 1985-09=100 100500959085 Source: PolicyUncertainty.com 07/02/13 250 200 150 100 50 250 200 150 100 50
  • 5. U.S. Total Payroll Jobs Labor Force Participation Rate Down 3 Percent 11.8 Million Unemployed 124000 126000 128000 130000 132000 134000 136000 138000 140000 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-May In thousands
  • 6. Employment: The Major Issues Unemployed, 16 Years & Over: 16 yr + SA, Thous 100500959085 Source: Bureau of Labor Statistics 07/02/13 16000 14000 12000 10000 8000 6000 4000 16000 14000 12000 10000 8000 6000 4000 • Employment Lower than Normal. • Unemployment Duration: Higher than Normal. • Job Creation is Lagging. • It’s Hard to Find a Job! • Housing Market Expanding, But Could do Better. • Good News—But Still Underperforming.
  • 7. Housing Outlook: Annual Existing Home Sales Good News: Impending Multiyear Growth 7.08 6.52 5.02 4.12 4.34 4.18 4.26 4.66 5.00 5.22 5.7 0 1 2 3 4 5 6 7 8 2005 2006 2007 2008 2009 2010 2011 2012 2013f 2014f 2015f In million units
  • 8. Housing Outlook: Home Prices Still Reasonable Market is Recovering—A Function of Jobs. Affordability Good, but Credit Availability Needs to Ease. 0 50000 100000 150000 200000 250000 2000-Jan 2000-Sep 2001-May 2002-Jan 2002-Sep 2003-May 2004-Jan 2004-Sep 2005-May 2006-Jan 2006-Sep 2007-May 2008-Jan 2008-Sep 2009-May 2010-Jan 2010-Sep 2011-May 2012-Jan 2012-Sep may 2014-Jan sept Existing Home Prices Actual and Forecast Home Prices, Monthly Forecast, Annual
  • 9. Housing Outlook: Affordability 0 50 100 150 200 250 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 Affordability
  • 10. Housing Outlook: Pending Home Sales Seasonally Adjusted 2001 = 100; Tax Credit Blips in 2010 0 20 40 60 80 100 120 140 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
  • 14. Housing Recovery—Why Sustainable? Housing Starts Requirement • 1.1 million household formation. • 0.3 million demolition and uninhabitable. (Implicitly assumes depreciation rate of more than 200 years) • 0.2 million net new vacation home demand. • Total New Housing Need = 1.6 million each year.
  • 15. Housing Recovery—Why Sustainable? Household Formation Accelerating After Great Recession (in millions) 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00
  • 16. Housing Recovery—Why Sustainable? Quantifying Housing Shortage (2001 to 2012) Household Formation Demolition New Vacation Home Housing Starts 11.0 million 3.6 million 2.0 million 15.7 million 16.6 million 15.7 million This housing shortage imbalance could grow because (1) Household Formation will exceed 1 million in 2013 and beyond (2) Housing Starts need to be 1.5 million per year … Not there in 2013
  • 17. Housing Recovery—Why Sustainable? Housing Starts: Long Term Demand Greater than Supply 0 500 1000 1500 2000 2500 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 multifamily single-family Thousand units (annualized) Long-term Average
  • 18. Housing Recovery—Why Sustainable? Existing vs. New Home Prices … Big Gap (single-family homes) 0 50000 100000 150000 200000 250000 300000 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 New Existing
  • 19. Number of “Qualified” Renters (credit scores unknown and not factored) Year Income Needed to Buy a Median Priced Home Number of Renters with necessary income Share of Renters Qualified 2000 $40,300 11.8 million 33% 2005 $50,400 9.0 million 24% 2012 $31,700 20.1 million 51% If the year 2000 is considered as normal, then 11.8 million renters had the income to buy a median priced home but chose not to. In 2012 there are about 8 million more renters with the necessary income but choosing not to be or are unable to be a homeowner.
  • 21. Price Expectations--Next 12 Months Source: REALTOR® Survey 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 200810 200901 200904 200907 200910 201001 201004 201007 201010 201101 201104 201107 201110 201201 201204 201207 201210 201301 Constant/Rising Prices Falling Prices
  • 22. Price Expectations for Next 12 Months As Reported by REALTORS®
  • 23. Summary of Outlook: Where Are We Headed? • Likely Multiyear Housing Recovery. – No Recession but Slow Economy. – Continued Job Growth and Household Formation. – Lagging Housing Starts and Continuing Housing Shortage. • Home prices are primed to rise further, by 13% cumulatively in 2013 and 2014. • Smooth Sailing Right Now—But Would be Better with Increased Credit Availability and Job Creation. • But There are Major Risks.
  • 24. Risks to Forecast—Housing Related • Upside Uncertainties … Credit Availability – Housing recovery so far even with tight credit – What happens if mortgage accessibility opens up? • Downside … Washington Housing Policies – Rising g-fees and FHA insurance premiums – QRM 20% down payment requirement? – Basel 3 … capital rule that punishes private mortgage with low down payment and commercial loans – Trim mortgage interest deduction? – Capital gains tax on home sale?
  • 25. Credit Risks--Ready to Open Credit? (Average Credit Scores of Approved Loans) Normal 2009 to 2012 If Normal Fannie 720 760 to 770 720 Freddie 720 760 to 770 720 FHA 650 680 to 700 660 15% to 20% Higher Sales Possible if Normal Conditions
  • 27. Downside Risk: Mortgage Investor Rights –Court system clogging the foreclosure process –Eminent Domain to take mortgages out of investors’ hands? (In order to restructure mortgages)
  • 28. Downside Risk: Aging Baby Boomers (Live Births per 1000 population in U.S.) 0 5 10 15 20 25 30 35 Baby Boomers … now aged 49 to 68 … Mix, Preferences, Millennial Buying Power
  • 29. Downside Risk: Student College Debt Important Issues: Are Colleges Effective, Are Expectations Realistic? ($ trillion) 0.0 0.2 0.4 0.6 0.8 1.0 1.2 2003 - Q1 2004 - Q1 2005 - Q1 2006 - Q1 2007 - Q1 2008 - Q1 2009 - Q1 2010 - Q1 2011 - Q1 2012 - Q1
  • 30. Downside Risk: GDP Growth … Unimpressive How Fragile is the Recovery? Housing, Quantitative Easing, Other -6 -4 -2 0 2 4 6 8 10 1960-Q1 1962-Q2 1964-Q3 1966-Q4 1969-Q1 1971-Q2 1973-Q3 1975-Q4 1978-Q1 1980-Q2 1982-Q3 1984-Q4 1987-Q1 1989-Q2 1991-Q3 1993-Q4 1996-Q1 1998-Q2 2000-Q3 2002-Q4 2005-Q1 2007-Q2 2009-Q3 2011-Q4 GDP Growth Percent Change, Year to Year, Constant Dollars
  • 31. North Carolina Outlook Employment Tracks National Trends 3500 3600 3700 3800 3900 4000 4100 4200 4300 124000 126000 128000 130000 132000 134000 136000 138000 140000 2000 - Jan 2002 - Jan 2004 - Jan 2006 - Jan 2008 - Jan 2010 - Jan 2012 - Jan Employment, Establishment Data U.S. North Carolina
  • 32. North Carolina Outlook Building Permits: Recovering 0 2000 4000 6000 8000 10000 12000 0 50000 100000 150000 200000 250000 2000-Jan 2000-Sep 2001-May 2002-Jan 2002-Sep 2003-May 2004-Jan 2004-Sep 2005-May 2006-Jan 2006-Sep 2007-May 2008-Jan 2008-Sep 2009-May 2010-Jan 2010-Sep 2011-May 2012-Jan 2012-Sep Authorized Building Permits U.S. North Carolina
  • 33. North Carolina Outlook Percent of Mortgages Past Due 0 2 4 6 8 10 12 Past Due Mortgages U.S. North Carolina
  • 34. North Carolina Outlook Indexes of Coincident Indicators 0 20 40 60 80 100 120 140 160 180 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 Index of Coincident Economic Indicators North Carolina US
  • 35. North Carolina Outlook North Carolina Unemployment Rate Slightly Higher than Nation as a Whole 0 2 4 6 8 10 12 2000-Jan 2000-Aug 2001-Mar 2001-Oct 2002-May 2002-Dec 2003-Jul 2004-Feb 2004-Sep 2005-Apr 2005-Nov 2006-Jun 2007-Jan 2007-Aug 2008-Mar 2008-Oct 2009-May 2009-Dec 2010-Jul 2011-Feb 2011-Sep 2012-Apr 2012-Nov Unemployment Rates U.S. North Carolina
  • 36. North Carolina Outlook Home Prices Have Stabilized 0 50 100 150 200 250 300 350 400 FHFA Home Price Index U.S. North Carolina
  • 37. Community Leaders—Thought Leadership • Thought Leadership: People Look to Leaders for Ideas on Important Topics. • Short Term—Recovery is Proceeding Nicely. • Longer Term—There are Major Problems. • The “Longer Term” Could be a Year or Two. – Problems are not Certainties. – But Problems Need to be Addressed. – And Can Show Up as a Surprise.
  • 38. Major Economic Risks: Problems Not to be Ignored. For Now—Smooth Sailing. Longer Run—Avoid Surprises. Problems: just ignored. • Budget Deficit. • Quantitative Easing. • Home Ownership Levels. • Entitlements: Social Security, Medical Care, Disability, Social Welfare Programs. • State/Local Government Finances. • Labor Force Issues. • Student Loans. • Generational Split. • Income Distribution. • Lack of Growth. • Regulation. • Divisive Rancor. The iceberg: just ignored. • Photographed morning April 15, 1912…smear of red paint along the base of the berg, indication that it had collided with a ship sometime in the previous twelve hours.
  • 39. NAR Research—On Line • Twitter: https://twitter.com/NAR_Research • Blog: http://economistsoutlook.blogs.realtor.org/ • NAR Research Page http://www.realtor.org/research-and-statistics • NAR Housing Statistics – http://www.realtor.org/research-and-statistics/housing-statistics • Research Reports – http://www.realtor.org/research-and-statistics/housing-statistics • NAR Commercial Reports – http://www.realtor.org/research-and-statistics/research- reports/commercial-real-estate