• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
The US Housing Market - Housing Supply & Demand
 

The US Housing Market - Housing Supply & Demand

on

  • 700 views

Presented at the San Jose Real Estate Investors Conference, Scott Sambucci explores current housing demand and supply drivers and housing affordability.

Presented at the San Jose Real Estate Investors Conference, Scott Sambucci explores current housing demand and supply drivers and housing affordability.

Statistics

Views

Total Views
700
Views on SlideShare
700
Embed Views
0

Actions

Likes
0
Downloads
3
Comments
0

0 Embeds 0

No embeds

Accessibility

Categories

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    The US Housing Market - Housing Supply & Demand The US Housing Market - Housing Supply & Demand Presentation Transcript

    • Housing Market MusingsSJREI | 02/01/2012 Scott Sambucci COO, Altos Research
    • THE CONSTANT GROWTH MYTH
    • Capita per inventoryThe other way to think about housing affordability
    • Capita Per Inventory: National Picture600500400300200100 -
    • Capita Per Inventory Altos Research "Capita per Inventory" vs. Active Market Prices Median Price Linear (Median Price)$1,200,000 Stamfo$1,000,000 rd, CT $800,000 $600,000 $400,000 McAllen, T $200,000 X $- - 50 100 150 200 250 300 350 400 450 500
    • 2011 Median Capita per Wells Fargo Family Income Change Unemployment Rate: SeptMetropolitan Area Inventory HOI Rank (000s) Median Price Pop 00 to 10 11 BLSHonolulu, HI 530 223 $ 81.6 $ 755,000 8.8% 5.7%San Francisco-Oakland-Fremont MSA 456 224 $ 101.6 $ 675,000 5.1% 9.2%San Jose-Sunnyvale-Santa Clara, CA 408 217 $ 103.6 $ 701,000 5.8% 9.6%Mc Allen-Edinburg-Mission, TX 378 214 $ 33.7 $ 158,000 36.1% 12.3%Los Angeles-Long Beach-Glendale, CA ^^^ 333 220 $ 64.0 $ 595,000 3.8% 11.3%San Diego-Carlsbad-San Marcos, CA 288 213 $ 74.9 $ 600,000 10.0% 9.7%Santa Barbara-Santa Maria-Goleta, CA 287 212 $ 72.3 $ 1,000,000 6.2% 8.6%New York-New- Jersey MSA 245 225 $ 67.4 $ 535,000 3.1% 8.3%Santa Cruz-Watsonville, CA 235 219 $ 85.8 $ 561,000 2.7% 10.1%San Luis Obispo-Paso Robles, CA 229 218 $ 74.4 $ 530,000 9.3% 9.3%Greensboro-High Point, NC 223 151 $ 54.6 $ 172,000 12.49% 10.4%Lakeland-Winter Haven, FL 219 9 $ 53.8 $ 139,000 24.4% 12.0%Springfield, IL 214 31 $ 69.1 $ 153,000 4.3% 7.4%Harrisburg-Carlisle, PA 198 32 $ 72.5 $ 176,000 7.9% 7.0%Flint, MI 189 11 $ 57.7 $ 89,000 -2.4% 10.6%Lansing-East Lansing, MI 186 6 $ 67.8 $ 128,000 3.6% 7.7%Houston-Sugar Land-Baytown, TX 184 181 $ 66.0 $ 316,000 26.11% 8.6%Burlington-South Burlington, VT 184 165 $ 75.7 $ 328,000 6.22% 4.2%Sacramento--Arden-Arcade--Roseville, CA 179 110 $ 75.1 $ 248,000 19.9% 11.5%Youngstown-Warren-Boardman, OH-PA 173 18 $ 54.9 $ 95,000 -6.2% 8.9%Virginia Beach-Norfolk-Newport News, VA-NC 171 120 $ 69.9 $ 269,000 6.05% 7.3%Austin-Round Rock-San Marcos, TX 167 159 $ 74.9 $ 286,000 37.3% 7.4%Carson City, NV 158 6 $ 68.3 $ 202,000 5.4% 12.4%Memphis, TN-MS-AR 158 148 $ 58.3 $ 170,000 9.20% 10.5%Dayton, OH 157 22 $ 62.4 $ 109,000 -0.8% 9.2%Rockford, IL 152 10 $ 63.4 $ 113,000 9.1% 13.4%Charlotte-Gastonia-Rock Hill, NC-SC 150 183 $ 67.5 $ 213,000 32.14% 10.7%Ogden-Clearfield, UT 148 21 $ 70.6 $ 206,000 23.6% 6.9%Indianapolis-Carmel, IN 142 18 $ 66.0 $ 159,000 15.2% 8.1%Toledo, OH 142 16 $ 61.7 $ 130,000 -1.2% 9.2%Canton-Massillon, OH 141 13 $ 58.1 $ 98,000 -0.6% 9.0%Columbia, SC 137 153 $ 63.6 $ 172,000 18.61% 9.2%Bridgeport-Stamford-Norwalk, CT 135 216 $ 105.3 $ 931,000 3.9% 7.9%Ocala, FL 92 17 $ 49.9 $ 163,000 28.0% 12.4%Portland-Vancouver-Hillsboro, OR-WA 46 170 $ 72.0 $ 299,000 5.44% 8.4%
    • So what? 2011 Median Unemployment Wells Fargo Family Income Change Rate: Sept 11 HOI Rank (000s) Median Price Pop 00 to 10 BLS CORREL Capita per Inventory 53.8% 31.2% 56.7% -4.6% -6.6%CORREL Wells Fargo HOI Rank 44.5% 75.7% 13.8% -14.2%
    • Capita per Inventory: Bay Area cities PALO ALTO SAN MATEO LOS ALTOS DUBLIN OAKLAND SAN JOSE SACRAMENTO BAKERSFIELD1600140012001000 800 600 400 200 0 10/7/2011
    • Homeownership Rates & The Rental Market What does this mean for investors?
    • Millennials not looking for Gen Y home ownership: A dreamMcMansions (unless they have to deferred?move back in with the parents) http://www.cbsnews.com/8301-505143_162-57324851/gen-y- home-ownership-a-dream-deferred/http://grist.org/cities/2011-01-14-millennials-not-looking-for-mcmansions-unless-they-have-to-live/
    • Owner occupied Renter occupied90%80%70%60%50%40%30%20%10%0% Total Households Native Naturalized US Citizen Non-US Citizens
    • Several factors other than demographic changes may explain the broad-based increases in homeownership rates. Unfortunately, however, there is little research available to quantify their effects; therefore, the ideas in this section are more speculative than the demographic analysis. With that said, it seems plausible that one of the more important factors explaining the broad-based increase in homeownership from 1994 to 2004 could be the myriad of innovations in the mortgage finance industry that occurred during that time… Several innovations helped propel the rise of the subprime market during the 1990s and into the 2000s. Although definitions of subprime mortgages vary, in essence they are loans given to households with lower credit quality, and they entail higher than average interest rates.FRBSF Economic Letter - November 3, 2006“The Rise in Homeownership”http://www.frbsf.org/publications/economics/letter/2006/el2006-30.html
    • Homeownership Rates: Bubble Markets
    • Are REOs really a good deal? What does this mean for investors?
    • The Foreclosure Discount: Myth or Reality? John P. Harding (University of Connecticut, Center for Real Estate and Urban Economic Studies), Eric Rosenblatt (Fannie Mae), Vincent W. Yao“Using a large sample of REO purchases, we identify a controlsample of non-distressed property purchases that closelymatch the REOs in terms of property characteristics, locationand time of sale and find that with the exception of a smallnumber of extraordinary returns from short-term investing inREOs, typical REO buyers earn approximately 1.4%/year abovethe return from price appreciation associated with the purchaseof a non-distressed property and that the original pricediscount needed to generate that excess return is less thantypical transaction costs.”
    • Uncle Sam’s Policies Do they work?
    • Programs. Lots of Programs REO Rental Initiative (Freddie Mac) National Real Estate Owned (REO) Rental Policy (Fannie Mae) Deed-for-Lease (Fannie Mae) Department of Housing & Urban Development Neighborhood Stabilization Program REO-to-Rental (US Federal Reserve) Federal Housing Finance Agency REO Initiative US Election HAMP, HARP, HARP II, HAFA Tax Credit
    • http://www.fhfa.gov/webfiles/23196/REO2112F.pdf
    • Scott Sambuccie: scott@altosresearch.comp: (415) 931 7942t: @scottsambucci