4 & 5 BHK Spacious Apartments for sale in Anamika High Point, Off SG Highway ...
Vanderbilt Presentation (April 2012)
1. Economic and Housing Market
TRENDS and OUTLOOK
Lawrence Yun, Ph.D.
Chief Economist
NATIONAL ASSOCIATION OF REALTORS®
Presentation at Vanderbilt University
April 18, 2012
2. Monthly Pending Home Sales Index
(Seasonally Adjusted)
115
Homebuyer Tax Credit
110
105
100
95
90
85
80
75
70
2007 - 2007 - 2008 - 2008 - 2009 - 2009 - 2010 - 2010 - 2011 - 2011 - 2012 -
Jan Jul Jan Jul Jan Jul Jan Jul Jan July Jan
3. 1,000,000
2,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
3,000,000
0
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
Monthly Existing Home Sales
2011 - May
2011 - Sep
2012 - Jan
4. 200
600
800
1000
1200
1400
1800
2000
400
1600
0
2005 - Jan
2005 - May
2005 - Sep
2006 - Jan
2006 - May
2006 - Sep
2007 - Jan
2007 - May
New Home Sales
2007 - Sep
2008 - Jan
2008 - May
2008 - Sep
2009 - Jan
2009 - May
2009 - Sep
2010 - Jan
2010 - May
Monthly New Homes
Single-Family Housing Starts
2010 - Sep
2011 - Jan
2011 - May
2011 - Sep
2012 - Jan
5. Improving Factors for Higher Home Sales
• Improving Factors
– Very high affordability
– Job creation
– Solid stock market recovery from 2008
– Rising rents and larger pool of qualified renters
– Household formation pent-up release
– Smart money chasing real estate
• Potential Huge Positive … Lending opens up
• Potential Huge Negative … Washington policy
18. Labor Force Participation Rate
%
68
67
66
65
64
63
62
61
2002 - Jan
2008 - Jan
1990 - Jan
1991 - Jan
1992 - Jan
1993 - Jan
1994 - Jan
1995 - Jan
1996 - Jan
1997 - Jan
1998 - Jan
1999 - Jan
2000 - Jan
2001 - Jan
2003 - Jan
2004 - Jan
2005 - Jan
2006 - Jan
2007 - Jan
2009 - Jan
2010 - Jan
2011 - Jan
2012 - Jan
Labor Force Participation Rate has been falling at the beginning of the recession. Many
went to school or took early retirement packages and are therefore no longer counted as
part of the labor force. If the labor force participation were to be normal (or had it not
fallen) then the corresponding unemployment rate would be closer to 11%.
21. Homes Bought How?
More People Sought Help From REALTORS®
Homebuilder Directly from owner Real estate agent
100
90
80
70
60
50
40
30
20
10
0
2005 2006 2007 2008 2009 2010 2011
22. Foreclosure Inventory
(% of all mortgage outstanding; about 1/3 of homes are free and clear)
10.0
New Jersey Arizona
8.0
6.0
4.0
2.0
0.0
2000 - 2001 - 2002 - 2003 - 2004 - 2005 - 2006 - 2007 - 2008 - 2009 - 2010 - 2011 -
Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1
Important Judicial States with slow foreclosure process:
• IL, IN, OH (Midwest)
• NJ, NY, CT (Northeast)
• FL
25. Banks/Regulators
Restricting Credit
(Average Credit Scores of Approved Loans)
Normal 2009 2010 If Normal
Fannie 720 761 762 720
Freddie 720 757 758 720
FHA 650 682 698 660
15% to 20% Higher Sales
26. Annual Household Formation…
Future Rent Pressure?
(3 separate Census data)
In millions
Household Formation leads to increase ownership and renters;
Could begin to return to normal of at least 1 million from 2012.
27. Cost Comparisons over 30 years
Item Price Index Price % Change
in 1981 Index in
2011
Consumer price index 87.2 226.3 160%
Rent index 84.7 254.3 200%
Food price index 91.6 229.6 150%
Gasoline price index 103.6 308.4 197%
College tuition index 75.8 601.3 693%
Medical care index 78.6 401.4 410%
Monthly mortgage payment on a $598 Same if no 0%
median priced home (14% mortgage cash out (free and clear
rate)
refi ownership)
Home Prices (FHFA index) 100 319 219%
28. Annual Forecast
2011 2012 2013
History Forecast Forecast
Existing Home Sales 4.26 million 4.65 million 4.71 million
New Home Sales 304,000 400,000 530,000
Housing Starts 611,000 760,000 960,000
Existing Home Price $166,100 $168,000 $172,000
GDP Growth +1.8% +2.3% +3.1%
Payroll Job Gains +1.7 million +2.7 million +2.7 million
Fed Funds Rate 0.1% 0.1% 0.1%
30-yr Mortgage 4.7% 4.3% 4.9%