2015 05 Residential Issues and Trends Forum Robert Dietz Presentation Slides

8/9/2019 2015 05 Residential Issues and Trends Forum Robert Dietz Presentation Slides

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Growth Potential and Headwinds forNew Home Construction

Robert Dietz, Ph.D.

Vice President, Tax and Mark

@dietz_econ www.eyeonh

NATIONAL ASSOCIATION OF REALTORS

RESIDENTIAL ECONOMIC ISSUES AND TRENDS FORUM

May 14, 2015


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Home Construction (Single-Family) Continues to L

the Oerall Housing !ecoery

"hy#

$emand is relatiely wea%!ental continues to lead

Su&&lyProduction constraints hold 'ac% inentory


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acroeconomic Conditions


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!eal G$P GrowthWeak First Qarters !"#$i%& 'a(k A%%a# )ai%s


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*m&loyment GrowthI/r".i%& e/#"y/e%t &r"*t+ t" ("%ti%e ".er 2015 a%$ 201


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Consumer Confidence'a(k t" re-re(essi"% #e.e#s


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Household Formations on the !ise#Uti(k i% year-".er-year (+a%&e i% +"se+"#$s

+housands

,g ./0 million(.12 renters)

,g 3/4 million(.532 renters )

,g 3/6 mi(.172 rente


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*ffects on Housing $emand8,nd "hat uilders are uilding


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First-+ime Home uyer Share of *9isting Home Sales


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First-+ime Home uyer Share of New Home Sales


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Homeownershi& and arriageoth declining for illennials


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Com&osition of Home Construction732 +y&ical Single-Family ShareCurrently Only ::2


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uilders Shifted Production to Higher *nd of the ar%et


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Custom uilding Share ;s *leated


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Condo ar%et $ormant < ultifamily Si=e Lower on !ental Concentratio


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Single-Family !ental Production !emains Small < ut *leated


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"hen First-+ime uyers Come ac% < +ownhouse ar%et is Leading ;nd


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;nentory of New Homes Growing8//Slowly


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Su&&ly Side Headwinds

The 3 Ls (and 1M)


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Lot Su&&lyShortage indicators rise and fall with leel of starts> e9ce&t recently


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Lending (,$?C loans)+ight8


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8ut *asing

' e t t e r

W " r s e

3SLOS Se%i"r L"a% Oi(er Sr.ey


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uilding aterial Pricesuilders !e&orting ;ncreases in Last : onths


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uilding aterial Prices


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Forecasts

! d li % t ; d (!;)


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!emodeling ar%et ;nde9 (!;) At "r a6".e 50 /"st " ast 27 years


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!esidential !emodeling

illions 133@ A> S,,!

,ctual

,dBusted

ltif il P d ti ; d


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ultifamily Production ;nde927 years at "r a6".e 50

ultifamily Housing Starts


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.@@4-1335 55.>333 Normal13.. .67>333

13.1 106>333 [email protected] 53@>333 142

13.0 544>333 .42

13.4 555>333 -:213.: 550>333 32

ultifamily Housing Starts!ea#t+y Res"%se r"/ )r"*t+ i% Re%ters

+rough to Current0th D 3@ E 71>333

.st D .4 E 555>333 53:2

13.4D.@62 ofNormal

N,H"ells Fargo Housing ar%et ;nde9


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N,H"ells Fargo Housing ar%et ;nde9'i#$ers re/ai% "ti/isti(

Single-Family Starts


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Single Family StartsC"%ti%i%& t" re(".er

+rough to Current

ar 3@ E 545>333ar .4 E :.7>333 642

13.4D.

062 of Normal

1

1333-1335 .>505>333 Normal

13.. 050>333

13.1 456>333 10213.5 :1.>333 .:2

13.0 :0:>333 0213.4 630>333 @2

13.: @66>333 5@2


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Positie Long-!un Outloo% for Housing

Po&ulation 'y Single-Iear of ,ge!i i l ti i i h h ld f ti


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!ising &o&ulation in &rime household formation years

illions

orn .@6@ or later orn .@:4-67 orn .@0:-:0 orn .@04 or ear

+otal Housing Starts*9&ected to normali=e 'y second half of decade


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*9&ected to normali=e 'y second half of decade

illions


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+han% you to N,! and for your attendanc

Duestions#

Robert Dietz, Ph.D.

Vice President, Tax and

@dietz_econ www.ey

2015 05 Residential Issues and Trends Forum Robert Dietz Presentation Slides

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