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Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
Economic Outlook and International Markets (Miami, November 2012)
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Economic Outlook and International Markets (Miami, November 2012)

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Presentation at Miami International Real Estate Congress …

Presentation at Miami International Real Estate Congress

Published in: Real Estate
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  • 1. Economic Outlook and International Markets Lawrence Yun, Ph.D. Chief Economist NATIONAL ASSOCIATION OF REALTORS®Presentation at Miami International Real Estate Congress Miami, Florida November 6, 2012
  • 2. Existing Home Sales Recovery: Best in 5 years8 In million units7 7.086 6.525 5.024 4.62 4.12 4.34 4.18 4.263210 2005 2006 2007 2008 2009 2010 2011 2012 est.
  • 3. Investors in the Market; and Homeowner buyers Neutral Investor Sales In thousands2500200015001000500 0 2005 2006 2007 2008 2009 2010 2011 2012 est. Owner-occupant Sales In thousands600050004000300020001000 0 2005 2006 2007 2008 2009 2010 2011 2012 est
  • 4. 25,000 29,000 31,000 33,000 35,000 39,000 41,000 27,000 37,0001980 - Q11981 - Q31983 - Q11984 - Q31986 - Q11987 - Q31989 - Q11990 - Q31992 - Q11993 - Q31995 - Q11996 - Q31998 - Q1 Rental Households1999 - Q32001 - Q12002 - Q32004 - Q12005 - Q32007 - Q12008 - Q32010 - Q12011 - Q3 Investors also seeing rising # of renters
  • 5. 0 1 2 3 4 5 -12000 - Jan2000 - Jul2001 - Jan2001 - Jul2002 - Jan2002 - Jul2003 - Jan2003 - Jul2004 - Jan2004 - Jul2005 - Jan2005 - Jul2006 - Jan2006 - Jul2007 - Jan2007 - Jul2008 - Jan % change from one year ago2008 - Jul2009 - Jan2009 - Jul2010 - Jan2010 - Jul Investors seeing Rising Rent2011 - Jan2011 - Jul2012 - Jan
  • 6. Visible Housing Inventory(Existing inv. At 8-year low; New inv. at 50-year low)4,500,0004,000,0003,500,0003,000,0002,500,0002,000,0001,500,0001,000,000 500,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 - Jan - Jan - Jan - Jan - Jan - Jan - Jan - Jan - Jan - Jan - Jan - Jan - Jan Existing New
  • 7. Miami Housing DemandMiami Housing Demand• 2011 Record High Home Sales• 2012 slight decline (down 3%)Lower Transactions because of Fewer Inventory• 24% fewer homes on the market for saleShorter Days on Market• median days on market is only 43 days Source: MAR
  • 8. Home Prices Rising Miami up 7% from one year ago Phoenix up 19% from one year ago300250 Phoenix200150 Miami10050 0 Source: Case-Shiller
  • 9. 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.5 5.0 4.02000 - Q12000 - Q32001 - Q12001 - Q32002 - Q12002 - Q32003 - Q12003 - Q32004 - Q12004 - Q32005 - Q12005 - Q32006 - Q12006 - Q32007 - Q12007 - Q32008 - Q12008 - Q32009 - Q12009 - Q3 million units2010 - Q12010 - Q32011 - Q12011 - Q32012 - Q1 Shadow Inventory … Falling 2014 … 8% (Seriously delinquent mortgage + homes in foreclosure process) 2013 … 15% 2012 … 25% 2011 … 33% 2010 … 33% Market Share Distressed Sales
  • 10. 0 2 4 6 8 10 12 14 %2005 - Q12005 - Q22005 - Q32005 - Q42006 - Q12006 - Q22006 - Q32006 - Q42007 - Q12007 - Q22007 - Q32007 - Q4 AZ2008 - Q12008 - Q22008 - Q3 MI2008 - Q42009 - Q12009 - Q2 CA2009 - Q32009 - Q42010 - Q12010 - Q2 in Non-Judicial States2010 - Q32010 - Q42011 - Q1 Foreclosures Rapidly Falling2011 - Q22011 - Q3 Example: Seriously Delinquent Mortgages in AZ, CA , MI2011 - Q42012 - Q12012 - Q2
  • 11. 0 2 4 6 8 10 12 % 2005 - Q1 2005 - Q2 2005 - Q3 2005 - Q4 2006 - Q1 2006 - Q2 2006 - Q3 2006 - Q4 2007 - Q1 • Vacant property 2007 - Q2 2007 - Q3 2007 - Q4 2008 - Q1 2008 - Q2 CT 2008 - Q3 2008 - Q4 IL 2009 - Q1 2009 - Q2 2009 - Q3 2009 - Q4 2010 - Q1 2010 - Q2 • Missed Mortgages for 6 months or longer 2010 - Q3 2010 - Q4 2011 - Q1 2011 - Q2 2011 - Q3 Example Seriously Delinquent Mortgages in CT and IL 2011 - Q4 2012 - Q1 Foreclosures Clogged in Judicial States 2012 - Q2Should a trigger be set up to foreclose without a court approval?
  • 12. 0 5 15 20 25 10 %2005 - Q12005 - Q22005 - Q32005 - Q42006 - Q12006 - Q22006 - Q32006 - Q42007 - Q12007 - Q22007 - Q32007 - Q42008 - Q12008 - Q22008 - Q32008 - Q42009 - Q12009 - Q22009 - Q32009 - Q42010 - Q1 Shadow in Florida2010 - Q2 Seriously Delinquent Mortgages2010 - Q32010 - Q42011 - Q12011 - Q22011 - Q32011 - Q42012 - Q12012 - Q2
  • 13. 500 1000 1500 2000 2500 0 2000 - Jan 2000 - Jul 2001 - Jan 2001 - Jul 2002 - JanSource: Census, HUD 2002 - Jul 2003 - Jan 2003 - Jul Thousand units (annualized) 2004 - Jan 2004 - Jul 2005 - Jan multifamily 2005 - Jul 2006 - Jan 2006 - Jul 2007 - Jan 2007 - Jul single-family Housing Starts 2008 - Jan 2008 - Jul 2009 - Jan 2009 - Jul 2010 - Jan 2010 - Jul 2011 - Jan (Well Below 50-year average of 1.5 million each year) 2011 - Jul 2012 - Jan Long-term Average
  • 14. Miami - Ft. Lauderdale Metro Housing Permits500004500040000350003000025000200001500010000 5000 0 1990 2000 1980 1982 1984 1986 1988 1992 1994 1996 1998 2002 2004 2006 2008 2010 2012
  • 15. Most Miami REALTORS® Have Worked with an International Client in the Past 12 Months
  • 16. 2012 International Survey Realtors® with International ClientsPercentage of Respondents 40% 38% 36% 34% 32% 32% 30% 28% 28% 27% 28% 26% 26% 23% 24% 22% 20% 2007 2008 2009 2010 2011 2012
  • 17. Global Buyers buying Where? Percent of International Sales by State35%30%25%20%15%10%5%0% Arizona California Florida Georgia Nevada New York Texas2007 5% 16% 10% 2% 2% 4% 8%2008 5% 11% 9% 3% 2% 4% 7%2009 7% 13% 23% 1% 1% 2% 11%2010 11% 12% 22% 5% 3% 4% 8%2011 6% 12% 31% 2% 2% 3% 9%2012 7% 11% 26% 4% 2% 4% 7%
  • 18. Global Buyers from Where? Percent of International Sales by Country30%25%20%15%10%5%0% Brazil Canada China France Germany India Japan Mexico Russia U.K.2007 2% 11% 5% 3% 3% 6% 1% 13% 1% 12%2008 2% 24% 8% 3% 4% 6% 1% 9% 2% 12%2009 1% 18% 5% 2% 4% 9% 1% 10% 1% 11%2010 1% 23% 8% 3% 4% 5% 1% 10% 3% 9%2011 3% 23% 9% 3% 4% 7% 1% 7% 1% 6%2012 3% 24% 11% 3% 3% 6% 1% 8% 2% 6%
  • 19. Responses to How Do You Get Most of Your Clients? Personal Contacts, Previous Clients, Online Marketing Important in Obtaining Clients
  • 20. Economy Growing, though Slowly(No Fresh Recession because of Housing Recovery) Real GDP Growth Rate4 %3210 2005 2006 2007 2008 2009 2010 2011 2012 2013-1 forecast forecast-2-3-4
  • 21. Payroll Jobs Changes (December to December)3 In millions210 2005 2006 2007 2008 2009 2010 2011 2012 2013-1 forecast forecast-2-3-4-5-6
  • 22. Unemployed and Underemployed … 6 to 7 million more than normal In thousandsSource: BLS 22
  • 23. Florida Jobs Slowly Coming Around In thousands82008000780076007400720070006800660064006200 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 - Jan - Jan - Jan - Jan - Jan - Jan - Jan - Jan - Jan - Jan - Jan - Jan - Jan
  • 24. 1000 2000 4000 5000 6000 7000 9000 3000 8000 01939 -…1942 -…1945 -… In thousands1948 -…1951 -…1954 -…1957 -…1960 -…1963 -…1966 -…1969 -…1972 -…1975 -…1978 -…1981 -…1984 -…1987 -…1990 -… Nonfarm Payroll Jobs1993 -…1996 -… Florida Jobs from 19401999 -…2002 -…2005 -…2008 -…2011 -… (When will the state run out of land?)
  • 25. 1,000 1,500 2,000 2,500 3,000 3,500 500 0 2005 - Jan 2005 - Jun2005 - Nov 2006 - Apr 2006 - Sep 2007 - Feb 2007 - Jul2007 - Dec2008 - May 2008 - Oct2009 - Mar2009 - Aug 2010 - Jan 2010 - Jun2010 - Nov 2011 - Apr 2011 - Sep S&P 500 (Almost 100% from low point) 2012 - Feb NASDAQ (More than 100% increase from low point) S&P 500 NASDAQ
  • 26. 0.0 10.0 40.0 50.0 60.0 70.0 30.0 20.02008 - Jan2008 - Apr2008 - Jul2008 - Oct2009 - Jan2009 - Apr2009 - Jul2009 - Oct Buyer2010 - Jan2010 - Apr2010 - Jul2010 - Oct Seller Foot Traffic2011 - Jan2011 - Apr2011 - Jul2011 - Oct2012 - Jan2012 - Apr2012 - Jul
  • 27. 75 85 95 105 110 115 70 80 90 100 2007 - Jan 2007 - AprSource: NAR 2007 - Jul 2007 - Oct 2008 - Jan 2008 - Apr 2008 - Jul 2008 - Oct Homebuyer Tax Credit 2009 - Jan 2009 - Apr 2009 - Jul 2009 - Oct 2010 - Jan 2010 - Apr (Seasonally Adjusted) 2010 - Jul 2010 - Oct 2011 - Jan 2011 - Apr 2011 - July 2011 - Oct 2012 - Jan 2012-Apr 2012 - Jul Monthly Pending Home Sales Index
  • 28. Housing Recovery Occurring • Tight Access to Mortgage • More All-Cash purchases• What happens when Mortgage Accessibility Opens Up?
  • 29. -200 -100 0 100 200 300 400 500 2001 - Q1 $ billion 2001 - Q3 2002 - Q1 2002 - Q3 2003 - Q1 2003 - Q3 2004 - Q1 2004 - Q3 2005 - Q1 2005 - Q3 2006 - Q1 2006 - Q3 2007 - Q1 2007 - Q3 2008 - Q1 (excluding Federal Reserve) 2008 - Q3 2009 - Q1 2009 - Q3 Financial Industry Profits 2010 - Q1 2010 - Q3 2011 - Q1 2011 - Q3 2012 - Q1
  • 30. Monetary Policy by Federal Reserve (no change to 2014) Fed Funds 30-year Mortgage %76543210 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 forecast forecast forecast Modestly higher rates could help home sales as banks re-staff mortgage work for home purchase applications and less refinance applications.
  • 31. Consumer Price Inflation (Slightly Above Fed’s preferred 2% core inflation rate) All Items Core %5.004.003.002.001.000.00 2005 2006 2007 2008 2009 2010 2011 2012 2013-1.00 forecast forecast
  • 32. Risks to Forecast• Washington Policy – 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? – Fiscal Cliff on January 1, 2013 … if no new compromised budget, then: • Automatic deep cuts to military and domestic spending • Automatic higher taxes • 3% shaved off GDP … Fresh Economic Recession
  • 33. Forecast Summary 2011 2012 2013 History Forecast ForecastExisting Home Sales 4.26 million 4.64 million 5.05 millionNew Home Sales 301,000 368,000 575,000Housing Starts 612,000 776,000 1,128,000Existing Home Price $166,100 $176,100 $185,200GDP Growth +1.8% +2.1% +2.5%Payroll Job Gains +1.7 million +1.7 million +2.2 millionFed Funds Rate 0.1% 0.1% 0.1%30-yr Mortgage 4.7% 3.7% 4.0%
  • 34. Existing Home SalesIn million units
  • 35. Median Home Price
  • 36. Commercial Real Estate
  • 37. Commercial Investments Sales Slow in 2012.Q3 billions $ Volume Source: Real Capital Analytics $80 $70 $60 $50 $40 $30 $20 $10 $0 01 02 03 04 05 06 07 08 09 10 11 12200% Year-Over-Year % Change100% 0%-100% 01 02 03 04 05 06 07 08 09 10 11 12
  • 38. Commercial Investments Cap Rates Continue Downward Trend Avg Cap Rates by Sector10.0%9.5% Sub - Office9.0% Industrial8.5% Retail8.0%7.5%7.0%6.5%6.0% CBD - Office Apartment5.5% Source: Real Capital Analytics5.0% 01 02 03 04 05 06 07 08 09 10 11 12
  • 39. 110 130 150 170 190 210 90 2000 December April August 2001 December April August 2002 December April August 2003 December April August 2004 December Apartment April August 2005 December April Retail August 2006 December April August 2007 December Industrial April August Moodys/RCA CPPI - Composite Indices 2008 December April Office August 2009 December April August 2010 December April August Commercial Investments—Apartment Prices Rise 2011 December AprilSource: Real Capital Analytics
  • 40. Global Economy
  • 41. 50000 100000 150000 200000 250000 0 1992 - Jan 1993 - Feb1994 - Mar 1995 - Apr1996 - May 1997 - Jun 1998 - Jul1999 - Aug 2000 - Sep 2001 - Oct2002 - Nov2003 - Dec 2005 - Jan 2006 - Feb2007 - Mar 2008 - Apr2009 - May 2010 - Jun U.S. International Trade (Doubles every 10 years) 2011 - Jul2012 - Aug Exports Imports
  • 42. Economic GrowthCountry GDP Growth 2012 forecastU.S. 2%Canada 2%Mexico 4%Brazil 1%U.K. 0%France 0%Germany 1%EU overall -1%Russia 4%India 6%China 8%Japan 2%
  • 43. 10-Year Government Borrowing Rate Country 10-Year Interest Inflation Rate Rate U.S. 1.7% 2.0% Canada 1.8% 1.2% Mexico 7.7% 4.1% Brazil 9.7% 5.3% U.K. 1.8% 2.2% France 2.2% 1.9% Germany 1.5% 2.0% EU overall n/a 2.5% Russia 7.7% 5.1% India 8.2% 9.7% China 3.2% 1.9% Japan 0.8% -0.3%
  • 44. Rising World Population109 In billion876543210 1000 1100 1200 1300 1400 1500 1600 1700 1800 1900 2000 2100
  • 45. For Daily Update and Analysis• Twitter @NAR_Research

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