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