Jonathan's slides from his presentation.

2. #CAROutreach

3. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
CHICAGO
MARKET OUTLOOK
Jonathan Smoke
Chief Economist
January 12, 2017

4. © 2017 Move, Inc. All rights reserved. Do not copy or distribute. 4
NATIONAL
TRENDS

5. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
JOB CREATION POSITIVE BUT WEAKER
229,000 jobs created by month in 2015; 180,000 average in 2016
5
Source: Bureau of Labor Statistics
0.0
2.0
4.0
6.0
8.0
10.0
12.0
120,000
125,000
130,000
135,000
140,000
145,000
150,000
2000.01
2000.05
2000.09
2001.01
2001.05
2001.09
2002.01
2002.05
2002.09
2003.01
2003.05
2003.09
2004.01
2004.05
2004.09
2005.01
2005.05
2005.09
2006.01
2006.05
2006.09
2007.01
2007.05
2007.09
2008.01
2008.05
2008.09
2009.01
2009.05
2009.09
2010.01
2010.05
2010.09
2011.01
2011.05
2011.09
2012.01
2012.05
2012.09
2013.01
2013.05
2013.09
2014.01
2014.05
2014.09
2015.01
2015.05
2015.09
2016.01
2016.05
2016.09
Thousands
Employment and Unemployment
Nonfarm Employment Unemployment Rate

6. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
VERY STRONG FALL RESALE MARKET
Sales rate up to 5.61 million in November, highest since Feb 2007
6
Source: National Association of REALTORS® Existing Home Sales Report
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
2000.01
2000.06
2000.11
2001.04
2001.09
2002.02
2002.07
2002.12
2003.05
2003.10
2004.03
2004.08
2005.01
2005.06
2005.11
2006.04
2006.09
2007.02
2007.07
2007.12
2008.05
2008.10
2009.03
2009.08
2010.01
2010.06
2010.11
2011.04
2011.09
2012.02
2012.07
2012.12
2013.05
2013.10
2014.03
2014.08
2015.01
2015.06
2015.11
2016.04
2016.09
Existing Home Sales and Prices
EHS SAAR Med Exist Home Price

7. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
INVENTORY FALLING FASTER
Inventory down 11% in November and December
7
Source: Realtor.com®
0
20
40
60
80
100
120
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
2013.02
2013.03
2013.04
2013.05
2013.06
2013.07
2013.08
2013.09
2013.10
2013.11
2013.12
2014.01
2014.02
2014.03
2014.04
2014.05
2014.06
2014.07
2014.08
2014.09
2014.10
2014.11
2014.12
2015.01
2015.02
2015.03
2015.04
2015.05
2015.06
2015.07
2015.08
2015.09
2015.10
2015.11
2015.12
2016.01
2016.02
2016.03
2016.04
2016.05
2016.06
2016.07
2016.08
2016.09
2016.10
2016.11
2016.12
Listings and Median Age of Inventory
Listings Median Age of Inventory

8. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
SALES SHIFTING TOWARDS NEW
Seasonally adjusted sales flat y/y for pending, +17% new in Nov
8
Source: National Association of REALTORS®, Commerce Department
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
2001.01
2001.05
2001.09
2002.01
2002.05
2002.09
2003.01
2003.05
2003.09
2004.01
2004.05
2004.09
2005.01
2005.05
2005.09
2006.01
2006.05
2006.09
2007.01
2007.05
2007.09
2008.01
2008.05
2008.09
2009.01
2009.05
2009.09
2010.01
2010.05
2010.09
2011.01
2011.05
2011.09
2012.01
2012.05
2012.09
2013.01
2013.05
2013.09
2014.01
2014.05
2014.09
2015.01
2015.05
2015.09
2016.01
2016.05
2016.09
Home Sales (New Contracts) SAAR
Pending Home Sales (Existing) New Home Sales

9. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
INVENTORY REMAINS A CONSTRAINT
51 straight months of home supply below normal; now 4.0/5.1 mos
9
Source: National Association of REALTORS®, Commerce Department
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
2000.01
2000.05
2000.09
2001.01
2001.05
2001.09
2002.01
2002.05
2002.09
2003.01
2003.05
2003.09
2004.01
2004.05
2004.09
2005.01
2005.05
2005.09
2006.01
2006.05
2006.09
2007.01
2007.05
2007.09
2008.01
2008.05
2008.09
2009.01
2009.05
2009.09
2010.01
2010.05
2010.09
2011.01
2011.05
2011.09
2012.01
2012.05
2012.09
2013.01
2013.05
2013.09
2014.01
2014.05
2014.09
2015.01
2015.05
2015.09
2016.01
2016.05
2016.09
Months' Supply of Homes for Sale
Existing New

10. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
STARTS UP AND DOWN IN FALL
Starts up 25% y/y in October, down 7% y/y in November
10
Source: Commerce Department
0
500
1,000
1,500
2,000
2,500
Thousands
Residential Construction
Single-Family Starts Multi-Family Starts

11. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
LISTING PRICES GREW 9% Y/Y IN DEC
Median list price increases are widespread
11
Source: Realtor.com®
December 2016

12. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
RENT INCREASES HAVE SLOWED
Asking rents down 1% y/y in Dec compared to list prices up 9%
12
Source: Realtor.com® and Altos Research
$1,300
$1,400
$1,500
$1,600
$1,700
$1,800
$1,900
$2,000
$150,000
$170,000
$190,000
$210,000
$230,000
$250,000
$270,000
2013.02
2013.03
2013.04
2013.05
2013.06
2013.07
2013.08
2013.09
2013.10
2013.11
2013.12
2014.01
2014.02
2014.03
2014.04
2014.05
2014.06
2014.07
2014.08
2014.09
2014.10
2014.11
2014.12
2015.01
2015.02
2015.03
2015.04
2015.05
2015.06
2015.07
2015.08
2015.09
2015.10
2015.11
2015.12
2016.01
2016.02
2016.03
2016.04
2016.05
2016.06
2016.07
2016.08
2016.09
2016.10
2016.11
2016.12
National Home Price and Rent Trends
Median Existing List Price Median Asking Rent

13. © 2017 Move, Inc. All rights reserved. Do not copy or distribute. 13
CHEAPER TO BUY IN 52% OF COUNTIES
Simple monthly cost analysis favors buying
Source: Realtor.com® Analysis of HUD Median Rents,
Nielsen Pop-Facts Demographics and Realtor.com® Data
2016

14. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
0
2
4
6
8
10
12
14
16
18
20
0.00
50.00
100.00
150.00
200.00
250.00
Jan-71
Feb-72
Mar-73
Apr-74
May-75
Jun-76
Jul-77
Aug-78
Sep-79
Oct-80
Nov-81
Dec-82
Jan-84
Feb-85
Mar-86
Apr-87
May-88
Jun-89
Jul-90
Aug-91
Sep-92
Oct-93
Nov-94
Dec-95
Jan-97
Feb-98
Mar-99
Apr-00
May-01
Jun-02
Jul-03
Aug-04
Sep-05
Oct-06
Nov-07
Dec-08
Jan-10
Feb-11
Mar-12
Apr-13
May-14
Jun-15
Jul-16
Affordability and Mortgage Rates
Housing Affordability Index Composite (Left Axis) Average 30-Year Conforming Rate (Right Axis)
30-year conforming rate averaged 3.65% in 2016
AFFORDABILITY ON THE DECLINE
14
Source: Moody’s Analytics, Freddie Mac, and National Association of REALTORS®
Oct
170
Jun 3.57
Dec 2012 3.34 Jul- Aug 3.44
Sep 3.46
Oct 3.47
Nov 3.77
Dec 4.20

15. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
CONFIDENCE AT 15 YEAR HIGH
Plans to purchase a home also strong (3 mo ave 6.3%)
15
Source: The Conference Board, Moody’s Analytics
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
0
20
40
60
80
100
120
140
160
2000.01
2000.06
2000.11
2001.04
2001.09
2002.02
2002.07
2002.12
2003.05
2003.10
2004.03
2004.08
2005.01
2005.06
2005.11
2006.04
2006.09
2007.02
2007.07
2007.12
2008.05
2008.10
2009.03
2009.08
2010.01
2010.06
2010.11
2011.04
2011.09
2012.02
2012.07
2012.12
2013.05
2013.10
2014.03
2014.08
2015.01
2015.06
2015.11
2016.04
2016.09
Consumer Confidence and Plans to Purchase a Home
Consumer Confidence Index Plans to Purchase

16. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
JOB CREATION FAVORS THE YOUNG
1,095,000 jobs created in last 12 months for 25-34 year olds
16
26%
13%
33%
30%
25%
13%
32%
Source: Bureau of Labor Statistics, Realtor.com® Analysis
-6.0%
-5.0%
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
Year-Over-Year Gains in Civilian Employment
Civilian Employment 25-34 Employment

17. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
LIFE DRIVES HOUSING DEMAND
Everyone’s tired of waiting and Millennials are building families
17
26%
13%
33%
30%
25%
13%
32%
Source: realtor.com Active Home Shopper Survey, September 2016
0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00%
change of job/job location
increase in income
desire to live closer to good schools
planning an increase to family size
relocated to a new city
increase in family size
looking for a safer neighhorhood
getting married/moving in with partner
change of family circumstance/composition
favorable home prices
tired of current home
Top 10 Buying Triggers
all 25-34

18. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
CREDIT ACCESS IMPROVING
Credit access up 7% year-over-year in December; up 5% since Sep
18
26%
13%
33%
30%
25%
13%
32%
Source: Mortgage Bankers Association, Haver Analytics
0
100
200
300
400
500
600
700
800
900
1000
Mortgage Credit Availability Index
Mar-2012=100

19. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
300-499
4.9 500-549
7.6
550-599
9.4
600-649
10.3
650-
699, 13
700-749
16.6
750-799
18.2
800-850
19.9
FICO Population
Distribution (Apr 2015)
19
YET CREDIT METRICS HAVE MOVED UP
In November the ave FICO score on a closed mortgage was 728
26%
13%
33%
13%
Source: Ellie Mae and Fair Isaac Corporation
620
640
660
680
700
720
740
760
780
2011.08
2011.10
2011.12
2012.02
2012.04
2012.06
2012.08
2012.10
2012.12
2013.02
2013.04
2013.06
2013.08
2013.10
2013.12
2014.02
2014.04
2014.06
2014.08
2014.10
2014.12
2015.02
2015.04
2015.06
2015.08
2015.10
2015.12
2016.02
2016.04
2016.06
2016.08
2016.10
Average FICO Scores US and By
Mortgage Type
US All Closed Loan Conv Purch FHA Purch VA Purch

20. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
IMPEDIMENTS TO PURCHASE
Inventory is back on top; time and finances plague first-timers
20
26%
13%
33%
30%
25%
13%
32%
Source: Realtor.com Survey of Buyer Traffic, December 2016
0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00%
I owe more on my current home than it is worth
Always overbid by other buyers
Currently on a lease
Having difficulty qualifying for a mortgage
Can't sell current home
Lack enough funds for down payment
Need to improve credit score
Haven't decided on a specific neighborhood/town
Cannot find a good house in my budget range
Just starting to explore
Have not yet found a house that meets my needs
What's Getting in the Way of Making a Home Purchase?
Repeat First-Time All Buyers

21. © 2017 Move, Inc. All rights reserved. Do not copy or distribute. 21
LOCATION
LOCATION
LOCATION

22. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
MORTGAGE RATES VARY
30-Year-Fixed in IL Low of 3.4% (Sep ‘16), High of 4.3% (Dec ‘16)
22
Source: Realtor.com

23. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
EMPLOYMENT AT RECORD HIGHS
Unemployment rate still a full percentage point higher than US
23
Source: BLS, Moody’s Analytics
0.00
2.00
4.00
6.00
8.00
10.00
12.00
3,400,000
3,600,000
3,800,000
4,000,000
4,200,000
4,400,000
4,600,000
4,800,000
Jan-90
Sep-90
May-91
Jan-92
Sep-92
May-93
Jan-94
Sep-94
May-95
Jan-96
Sep-96
May-97
Jan-98
Sep-98
May-99
Jan-00
Sep-00
May-01
Jan-02
Sep-02
May-03
Jan-04
Sep-04
May-05
Jan-06
Sep-06
May-07
Jan-08
Sep-08
May-09
Jan-10
Sep-10
May-11
Jan-12
Sep-12
May-13
Jan-14
Sep-14
May-15
Jan-16
Sep-16
Employment and Unemployment Rate in Chicago MSA
Total Nonfarm Employment (SA) Unemployment Rate (% SA)

24. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
TOTAL STARTS REMAIN LOW
Starts down in November but single-family up 24%
24
Source: Commerce Department, Moody’s Analytics
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Jan-90
Sep-90
May-91
Jan-92
Sep-92
May-93
Jan-94
Sep-94
May-95
Jan-96
Sep-96
May-97
Jan-98
Sep-98
May-99
Jan-00
Sep-00
May-01
Jan-02
Sep-02
May-03
Jan-04
Sep-04
May-05
Jan-06
Sep-06
May-07
Jan-08
Sep-08
May-09
Jan-10
Sep-10
May-11
Jan-12
Sep-12
May-13
Jan-14
Sep-14
May-15
Jan-16
Sep-16
New Construction Starts in Chicago MSA
Single-family Multi-family

25. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
ACTIVE INVENTORY IN REGION
Cook County dominates single family and condo active listings
25
Source: Realtor.com

26. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
INVENTORY TIGHTENED
Active listings down 16.7% Y/Y in Cook County (December 2016)
26
Source: Realtor.com

27. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
AGE OF INVENTORY
Inventory moving fastest in Cook County (December 2016)
27
Source: Realtor.com

28. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
LIST PRICES ALSO GROWING
Asking prices up 10% Y/Y in Cook County (December 2016)
28
Source: Realtor.com

29. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
LIST PRICE APPRECIATION COOK
68% of zips seeing 5%+ listing price growth Y/Y (Dec 2016)
29
Source: Realtor.com

30. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
HOTTEST ZIPS COOK COUNTY (Q3 2016)
Based on Supply and Demand
30
Source: Realtor.com

31. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
HOTTEST ZIPS IN CHICAGO
Based on Supply and Demand
31
Source: Realtor.com

32. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
BIG DATA IN CHICAGO
Interest by age groups (H1 2016)
32
Source: Realtor.com

33. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
CHICAGO INTEREST BY AGE GROUPS
Interest in hottest zips (H1 2016)
33
Source: Realtor.com

34. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
HOTTEST LISTINGS IN LAST 60 DAYS
Top homes get 24-36 times more views than Chicago average
34

35. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
RENT VS BUY
Monthly costs slightly favor buying in Cook County
35
Source: Realtor.com® Analysis of Nielsen Pop-Facts Demographics, HUD Fair Market Rents and Realtor.com Data

36. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
HOUSEHOLD GROWTH 2017-2022
Growth hot spots in the city and suburbs of Chicago
36
Source: Nielsen Demographics Pop-Facts 2017

37. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
FOCUS ON CHICAGO
Growth hot spots in city favor urban growth areas
37
Source: Nielsen Demographics Pop-Facts 2017

38. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
• National Association of REALTORS® Macro Forecast:
• GDP grows 2.2% (vs. 1.6% in 2016)
• Nonfarm payroll employment grows 1.3% (156k per mo)
• realtor.com® housing forecast:
• Existing home prices appreciate 3.9% (Chicago MSA 2.0%)
• Total home sales grow 2.6% (Chicago MSA 2.3%)
• 30-year fixed conforming rate ends 2017 at 4.5%
38
2017 FORECAST
Key economic and housing metrics from NAR and realtor.com

39. © 2017 Move, Inc. All rights reserved. Do not copy or distribute.
Good Grief
Bastille
Chase You Down
Runaground
She Sets the City on Fire
Gavin Degraw
HOT TRACKS TO JOG YOUR MEMORY
From DJ Smokey Smoke…

40. © 2017 Move, Inc. All rights reserved. Do not copy or distribute. 40
Jonathan Smoke
Chief Economist
realtor.com®
jonathan.smoke@realtor.com
@SmokeonHousing
Access market data, research, and presentations at
research.realtor.com