Economic and Real Estate Market Outlookfiles.constantcontact.com/1386ce3a001/19b510e7...Utah...
51
Economic and Real Estate Market Outlook By Lawrence Yun, Ph.D. Chief Economist, National Association of REALTORS® Presentation at Park City Board of Realtors and Salt Lake Board of REALTORS® February 2017
Transcript of Economic and Real Estate Market Outlookfiles.constantcontact.com/1386ce3a001/19b510e7...Utah...
Economic and Real Estate Market Outlook
By Lawrence Yun, Ph.D.Chief Economist, National Association of REALTORS®
Presentation at Park City Board of Realtors and Salt Lake Board of REALTORS®
February 2017
Lifetime Wealth at All-Time High
0100002000030000400005000060000700008000090000
10000019
90 -
Q1
1991
- Q
119
92 -
Q1
1993
- Q
119
94 -
Q1
1995
- Q
119
96 -
Q1
1997
- Q
119
98 -
Q1
1999
- Q
120
00 -
Q1
2001
- Q
120
02 -
Q1
2003
- Q
120
04 -
Q1
2005
- Q
120
06 -
Q1
2007
- Q
120
08 -
Q1
2009
- Q
120
10 -
Q1
2011
- Q
120
12 -
Q1
2013
- Q
120
14 -
Q1
2015
- Q
120
16 -
Q1
Median Household Income(Inflation Adjusted)
$50,000$51,000$52,000$53,000$54,000$55,000$56,000$57,000$58,000$59,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Annual GDP … Below 3% for 11 straight years
-4
-2
0
2
4
6
8
10
1950
1952
1954
1956
1958
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
GDP Annual Growth Rate
Sluggish Business Spending Despite High Profit
0
500
1000
1500
2000
2500
ProfitsBusiness Spending
Animal Spirit Revival? Small Business Optimism
80
85
90
95
100
10520
08 -
Oct
2008
- De
c20
09 -
Feb
2009
- Ap
r20
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2009
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2010
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c20
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2012
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2012
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2013
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g20
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2014
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2014
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2015
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r20
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2015
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g20
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2015
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c20
16 -
Feb
2016
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r20
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Jun
2016
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g20
16 -
Oct
2016
- De
c
Animal Spirit Revival? Consumer Confidence
0
20
40
60
80
100
12020
08 -
Oct
2008
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c20
09 -
Feb
2009
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r20
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2009
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g20
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2009
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c20
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2010
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c20
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2011
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g20
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2011
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c20
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2012
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2012
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2012
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2013
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r20
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2013
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2013
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c20
14 -
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2014
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r20
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2014
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g20
14 -
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2014
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c20
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r20
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Jun
2015
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g20
15 -
Oct
2015
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c20
16 -
Feb
2016
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r20
16 -
Jun
2016
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g20
16 -
Oct
2016
- De
c
Stock Market: S&P 500 Index
0
500
1000
1500
2000
2500
2000
- Ja
n20
00 -
May
2000
- Se
p20
01 -
Jan
2001
- M
ay20
01 -
Sep
2002
- Ja
n20
02 -
May
2002
- Se
p20
03 -
Jan
2003
- M
ay20
03 -
Sep
2004
- Ja
n20
04 -
May
2004
- Se
p20
05 -
Jan
2005
- M
ay20
05 -
Sep
2006
- Ja
n20
06 -
May
2006
- Se
p20
07 -
Jan
2007
- M
ay20
07 -
Sep
2008
- Ja
n20
08 -
May
2008
- Se
p20
09 -
Jan
2009
- M
ay20
09 -
Sep
2010
- Ja
n20
10 -
May
2010
- Se
p20
11 -
Jan
2011
- M
ay20
11 -
Sep
2012
- Ja
n20
12 -
May
2012
- Se
p20
13 -
Jan
2013
- M
ay20
13 -
Sep
2014
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n20
14 -
May
2014
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p20
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Jan
2015
- M
ay20
15 -
Sep
2016
- Ja
n20
16 -
May
2016
- Se
p
Jobs(8 million lost … 15 million gained)
120,000
125,000
130,000
135,000
140,000
145,000
150,00020
00 -
Jan
2000
- Ju
l20
01 -
Jan
2001
- Ju
l20
02 -
Jan
2002
- Ju
l20
03 -
Jan
2003
- Ju
l20
04 -
Jan
2004
- Ju
l20
05 -
Jan
2005
- Ju
l20
06 -
Jan
2006
- Ju
l20
07 -
Jan
2007
- Ju
l20
08 -
Jan
2008
- Ju
l20
09 -
Jan
2009
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l20
10 -
Jan
2010
- Ju
l20
11 -
Jan
2011
- Ju
l20
12 -
Jan
2012
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l20
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Jan
2013
- Ju
l20
14 -
Jan
2014
- Ju
l20
15 -
Jan
2015
- Ju
l20
16 -
Jan
2016
- Ju
l
In thousands
Non-farm Employment Growth By State
Total Jobs in Salt Lake City; including Park City(33% growth vs 11% nationwide from 2000 )
500
550
600
650
700
750
2000
- Ja
n20
00 -
Jul
2001
- Ja
n20
01 -
Jul
2002
- Ja
n20
02 -
Jul
2003
- Ja
n20
03 -
Jul
2004
- Ja
n20
04 -
Jul
2005
- Ja
n20
05 -
Jul
2006
- Ja
n20
06 -
Jul
2007
- Ja
n20
07 -
Jul
2008
- Ja
n20
08 -
Jul
2009
- Ja
n20
09 -
Jul
2010
- Ja
n20
10 -
Jul
2011
- Ja
n20
11 -
Jul
2012
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n20
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Jul
2013
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n20
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Jul
2014
- Ja
n20
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Jul
2015
- Ja
n20
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Jul
2016
- Ja
n20
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Jul
In thousands
Jobs in Summit County(30% growth)
15
17
19
21
23
25
27
2000
- Ja
n20
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Jul
2001
- Ja
n20
01 -
Jul
2002
- Ja
n20
02 -
Jul
2003
- Ja
n20
03 -
Jul
2004
- Ja
n20
04 -
Jul
2005
- Ja
n20
05 -
Jul
2006
- Ja
n20
06 -
Jul
2007
- Ja
n20
07 -
Jul
2008
- Ja
n20
08 -
Jul
2009
- Ja
n20
09 -
Jul
2010
- Ja
n20
10 -
Jul
2011
- Ja
n20
11 -
Jul
2012
- Ja
n20
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Jul
2013
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n20
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Jul
2014
- Ja
n20
14 -
Jul
2015
- Ja
n20
15 -
Jul
2016
- Ja
n20
16 -
Jul
In thousands
Total Jobs in Ogden and Provo(35% growth and 59% growth)
150
170
190
210
230
250
270
2000
- Ja
n20
00 -
Jul
2001
- Ja
n20
01 -
Jul
2002
- Ja
n20
02 -
Jul
2003
- Ja
n20
03 -
Jul
2004
- Ja
n20
04 -
Jul
2005
- Ja
n20
05 -
Jul
2006
- Ja
n20
06 -
Jul
2007
- Ja
n20
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Jul
2008
- Ja
n20
08 -
Jul
2009
- Ja
n20
09 -
Jul
2010
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n20
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Jul
2011
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n20
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Jul
2012
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n20
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Jul
2013
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n20
13 -
Jul
2014
- Ja
n20
14 -
Jul
2015
- Ja
n20
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Jul
2016
- Ja
n20
16 -
Jul
In thousands
Total Jobs in New Orleans
400
450
500
550
600
650
2000
- Ja
n20
00 -
Jul
2001
- Ja
n20
01 -
Jul
2002
- Ja
n20
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Jul
2003
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n20
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Jul
2004
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n20
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2005
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n20
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2006
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2007
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n20
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2008
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n20
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Jul
2009
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n20
09 -
Jul
2010
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n20
10 -
Jul
2011
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n20
11 -
Jul
2012
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n20
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2013
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n20
13 -
Jul
2014
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n20
14 -
Jul
2015
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n20
15 -
Jul
2016
- Ja
n20
16 -
Jul
In thousands
Jobs in St. George
30
35
40
45
50
55
60
65
2000
- Ja
n20
00 -
Jul
2001
- Ja
n20
01 -
Jul
2002
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n20
02 -
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2003
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n20
03 -
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2004
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n20
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Jul
2005
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2006
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2007
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Jul
2008
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n20
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Jul
2009
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n20
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Jul
2010
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n20
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Jul
2011
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n20
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2012
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n20
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2013
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n20
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Jul
2014
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n20
14 -
Jul
2015
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n20
15 -
Jul
2016
- Ja
n20
16 -
Jul
In thousands
Utah Manufacturing Jobs
100
105
110
115
120
125
130
135
2000
- Ja
n20
00 -
Jul
2001
- Ja
n20
01 -
Jul
2002
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n20
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Jul
2003
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n20
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2004
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2005
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n20
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2006
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2007
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2008
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2009
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2012
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2014
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n20
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2015
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n20
15 -
Jul
2016
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n20
16 -
Jul
In thousands
Pennsylvania Manufacturing Jobs
500
550
600
650
700
750
800
850
900
2000
- Ja
n20
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Jul
2001
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n20
01 -
Jul
2002
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n20
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2003
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2009
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2011
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2012
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2013
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2014
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n20
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2015
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Jul
2016
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16 -
Jul
In thousands
Housing Market Turning?
Dollar Volume Growth Rate%
4.38.8
15.518.2
20.7
13.9
-8.0
-23.0-25.5
-5.6 -2.1 -1.1
15.219.0
0.9
10.97.0
-30
-20
-10
0
10
20
30
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
NAR HOME Survey(March 2015 to September 2016)
50%55%60%65%70%75%80%85%90%
315 415 515 615 715 815 915 1015 1115 1215 116 216 316 416 516 616 716 816 916
Do you believe that now is a good time to BUY a home or not? …
YES
REALTOR Buyer Traffic Index(% change from a year ago)
-40
-20
0
20
40
60
80
100
Mortgage Purchase Applications(% change from a year ago)
-50-40-30-20-10
0102030405060
Jan
7 20
11M
ar 1
8 20
11M
ay 2
7 20
11Au
g 5
2011
Oct
14
2011
Dec
23 2
011
Mar
2 2
012
May
11
2012
Jul 2
0 20
12Se
p 28
201
2De
c 7
2012
Feb
15 2
013
Apr 2
6 20
13Ju
l 5 2
013
Sep
13 2
013
Nov
22
2013
Jan
31 2
014
Apr 1
1 20
14Ju
n 20
201
4Au
g 29
201
4N
ov 7
201
4Ja
n 16
201
5M
ar 2
7 20
15Ju
n 5
2015
Aug
14 2
015
Oct
23
2015
Jan
1 20
16M
ar 1
1 20
16M
ay 2
0 20
16Ju
l 29
2016
Pending Home Sales Index(Seasonally Adjusted)
80859095
100105110115120
2011
- Ja
n20
11 -
Mar
2011
- M
ay20
11 -
Jul
2011
- Se
p20
11 -
Nov
2012
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n20
12 -
Mar
2012
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ay20
12 -
Jul
2012
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p20
12 -
Nov
2013
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n20
13 -
Mar
2013
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ay20
13 -
Jul
2013
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p20
13 -
Nov
2014
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n20
14 -
Mar
2014
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ay20
14 -
Jul
2014
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p20
14 -
Nov
2015
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n20
15 -
Mar
2015
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ay20
15 -
Jul
2015
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p20
15 -
Nov
2016
- Ja
n20
16 -
Mar
2016
- M
ay20
16 -
Jul
2016
- Se
p20
16 -
Nov
Rent Growth(% change from a year ago)
0.00.51.01.52.02.53.03.54.04.5
2011
- Ja
n
2011
- Ap
r
2011
- Ju
l
2011
- O
ct
2012
- Ja
n
2012
- Ap
r
2012
- Ju
l
2012
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ct
2013
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n
2013
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r
2013
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l
2013
- O
ct
2014
- Ja
n
2014
- Ap
r
2014
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l
2014
- O
ct
2015
- Ja
n
2015
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r
2015
- Ju
l
2015
- O
ct
2016
- Ja
n
2016
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r
2016
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l
2016
- O
ct
Park City Housing Data• Unit Sales … down 18% in 3rd quarter• Median Price … up 18% .. $1.63 million
• Sales stronger in Wasatch County because of lower price
Salt Lake City Housing Data• Unit Sales … up 1.3% in 2016 … best in decade
• Median Price … up 8% .. $290,000
Nationwide Vacation Home Sales
0
200
400
600
800
1000
1200
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
In thousands
Median Vacation Home Price
0
50
100
150
200
250
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
In thousands
Constant Quality Home Price Index
100120140160180200220240260
1995
- Q
1
1995
- Q
4
1996
- Q
3
1997
- Q
2
1998
- Q
1
1998
- Q
4
1999
- Q
3
2000
- Q
2
2001
- Q
1
2001
- Q
4
2002
- Q
3
2003
- Q
2
2004
- Q
1
2004
- Q
4
2005
- Q
3
2006
- Q
2
2007
- Q
1
2007
- Q
4
2008
- Q
3
2009
- Q
2
2010
- Q
1
2010
- Q
4
2011
- Q
3
2012
- Q
2
2013
- Q
1
2013
- Q
4
2014
- Q
3
2015
- Q
2
2016
- Q
1
SLC St. George
Home Price Index – CO and PA
150170190210230250270290
2007
- Q
120
07 -
Q2
2007
- Q
320
07 -
Q4
2008
- Q
120
08 -
Q2
2008
- Q
320
08 -
Q4
2009
- Q
120
09 -
Q2
2009
- Q
320
09 -
Q4
2010
- Q
120
10 -
Q2
2010
- Q
320
10 -
Q4
2011
- Q
120
11 -
Q2
2011
- Q
320
11 -
Q4
2012
- Q
120
12 -
Q2
2012
- Q
320
12 -
Q4
2013
- Q
120
13 -
Q2
2013
- Q
320
13 -
Q4
2014
- Q
120
14 -
Q2
2014
- Q
320
14 -
Q4
2015
- Q
120
15 -
Q2
2015
- Q
320
15 -
Q4
2016
- Q
120
16 -
Q2
Allentown Denver
Market Turning? Not Clear,
though weakening momentum
Do You Ever Want to Own a Home in Future?
%10%20%30%40%50%60%70%80%90%
100%
315 415 515 615 715 815 915 1015 1115 1215 116 216 316 416 516 616 716 816 916
Yes No
Homeownership RateAt Near 50-year low
6061626364656667686970
1965- Q1
1968- Q1
1971- Q1
1974- Q1
1977- Q1
1980- Q1
1983- Q1
1986- Q1
1989- Q1
1992- Q1
1995- Q1
1998- Q1
2001- Q1
2004- Q1
2007- Q1
2010- Q1
2013- Q1
2016- Q1
Younger Households Less Likely to Own a Home
0%
20%
40%
60%
80%
100%
34 and younger 65 and older
Homeownership Rate
2004 (Peak) 2016 Q3
Source: Census Bureau
Median net worth of households headed by…
Wealth Gap Between Young Adults (under-35) and Retiree (65+)
$15,260 $10,460 $8,500
$120,524
$210,500$230,000
$0
$50,000
$100,000
$150,000
$200,000
$250,000
1983 2013 2016 est.
Student Loan …NAR-ASA Study implies 5 year Delay
(in $billion)
0
200
400
600
800
1000
1200
1400
1600
2006- Q1
2006- Q3
2007- Q1
2007- Q3
2008- Q1
2008- Q3
2009- Q1
2009- Q3
2010- Q1
2010- Q3
2011- Q1
2011- Q3
2012- Q1
2012- Q3
2013- Q1
2013- Q3
2014- Q1
2014- Q3
2015- Q1
2015- Q3
2016- Q1
Consumer Price Index over the Long Haul(Rental Income > CPI by 25%)
0
50
100
150
200
250
300
350
1983- Jul
1985- Jul
1987- Jul
1989- Jul
1991- Jul
1993- Jul
1995- Jul
1997- Jul
1999- Jul
2001- Jul
2003- Jul
2005- Jul
2007- Jul
2009- Jul
2011- Jul
2013- Jul
2015- Jul
RentCPI
Consumer Price Index over the Long Haul
0
100
200
300
400
500
600
1983- Jul
1985- Jul
1987- Jul
1989- Jul
1991- Jul
1993- Jul
1995- Jul
1997- Jul
1999- Jul
2001- Jul
2003- Jul
2005- Jul
2007- Jul
2009- Jul
2011- Jul
2013- Jul
2015- Jul
Medical
Rent
CPI
Consumer Price Index over the Long Haul
0
100
200
300
400
500
600
700
800
900
1983- Jul
1985- Jul
1987- Jul
1989- Jul
1991- Jul
1993- Jul
1995- Jul
1997- Jul
1999- Jul
2001- Jul
2003- Jul
2005- Jul
2007- Jul
2009- Jul
2011- Jul
2013- Jul
2015- Jul
TuitionMedicalRentCPI
Borrowers Not Defaulting(Serious Delinquency Rate)
0.0
2.0
4.0
6.0
8.0
10.0
12.0
2005
- Q
120
05 -
Q2
2005
- Q
320
05 -
Q4
2006
- Q
120
06 -
Q2
2006
- Q
320
06 -
Q4
2007
- Q
120
07 -
Q2
2007
- Q
320
07 -
Q4
2008
- Q
120
08 -
Q2
2008
- Q
320
08 -
Q4
2009
- Q
120
09 -
Q2
2009
- Q
320
09 -
Q4
2010
- Q
120
10 -
Q2
2010
- Q
320
10 -
Q4
2011
- Q
120
11 -
Q2
2011
- Q
320
11 -
Q4
2012
- Q
120
12 -
Q2
2012
- Q
320
12 -
Q4
2013
- Q
120
13 -
Q2
2013
- Q
320
13 -
Q4
2014
- Q
120
14 -
Q2
2014
- Q
320
14 -
Q4
2015
- Q
120
15 -
Q2
2015
- Q
320
15 -
Q4
2016
- Q
120
16 -
Q2
2016
- Q
3
Veterans Affairs Mortgages
Pennsylvania Mortgages
U.S. All Mortgages
Distressed Property Sales(% of Total Sales)
0102030405060
2008
- O
ct20
09 -
Jan
2009
- Ap
r20
09 -
Jul
2009
- O
ct20
10 -
Jan
2010
- Ap
r20
10 -
Jul
2010
- O
ct20
11 -
Jan
2011
- Ap
r20
11 -
Jul
2011
- O
ct20
12 -
Jan
2012
- Ap
r20
12 -
Jul
2012
- O
ct20
13 -
Jan
2013
- Ap
r20
13 -
Jul
2013
- O
ct20
14 -
Jan
2014
- Ap
r20
14 -
Jul
2014
- O
ct20
15 -
Jan
2015
- Ap
r20
15 -
Jul
2015
- O
ct20
16 -
Jan
2016
- Ap
r20
16 -
Jul
2016
- O
ct
Short Sale Foreclosure
Single-family Housing Permits and Starts –Grossly Inadequate
Thousand units
0200400600800
100012001400160018002000
2000
- Ja
n20
00 -
Jun
2000
- No
v20
01 -
Apr
2001
- Se
p20
02 -
Feb
2002
- Ju
l20
02 -
Dec
2003
- M
ay20
03 -
Oct
2004
- M
ar20
04 -
Aug
2005
- Ja
n20
05 -
Jun
2005
- No
v20
06 -
Apr
2006
- Se
p20
07 -
Feb
2007
- Ju
l20
07 -
Dec
2008
- M
ay20
08 -
Oct
2009
- M
ar20
09 -
Aug
2010
- Ja
n20
10 -
Jun
2010
- No
v20
11 -
Apr
2011
- Se
p20
12 -
Feb
2012
- Ju
l20
12 -
Dec
2013
- M
ay20
13 -
Oct
2014
- M
ar20
14 -
Aug
2015
- Ja
n20
15 -
Jun
2015
- No
v20
16 -
Apr
2016
- Se
p
Salt Lake City Housing Starts
0
2000
4000
6000
8000
10000
12000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Summit County Housing Starts
0
200
400
600
800
1000
1200
1400
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Forecast
Fed Rate Hike in December ‘15
in December ‘16
then again in ‘17?
Normal vs. Now2000 (Likely Normal) 2016
Existing Home Sales 5.2 million 5.3 million
New Home Sales 900,000 500,000
Population 282 million 324 million
Jobs 132 million 145 million
Total U.S. Household Wealth $44 trillion $85 trillion
Economic Forecast2015 2016
Likely
2017
Forecast
2018
Forecast
GDP Growth 2.6% 1.5% 2.1% 2.5%
Job Growth +2.6 million
+2.0 million
+2.1 million
+2.4million
CPI Inflation 0.3% 1.2% 2.5% 2.5%
Housing Forecast2015 2016
Likely
2017
Forecast
2018
Forecast
New Home Sales
500,000 570,000 620,000 700,000
Existing Home Sales
5.3 million 5.4 million 5.5 million 5.7 million
Median Price Growth
+ 6.8% +5.3% 4.0% 3.2%
30-year Rate 3.9% 3.6% 4.4% 4.8%
Trump Presidency• Dodd-Frank?
• Need Construction Workers … Community College Training
• Fannie/Freddie and Mortgage Availability?
• Tax Simplification? and Mortgage Interest Deduction and 1031 exchange
• Natural Disaster and Flood Insurance?
• EPA, land use, development fees?
