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Forecasting the Demand   for Housing in the     United States        G. Stacy Sirmans     Florida State University      Da...
Forecasting Housing DemandA Research Project Sponsored by the  REALTOR University Research               Center  National ...
Introduction Interesting time for housing demand in   U.S. 2000s decade: Real estate boom; now   working through period ...
IntroductionBIG Question: What is the future of U.S. housing   demand given these factors?Smaller Questions: What will b...
Introduction This study uses a multinomial logit   model to forecast the demand for   housing in the U.S. Part One estim...
Population The level and makeup of population set   the base for housing demand All age categories of adult population  ...
Population
Population
Modeling U.S. Housing Demand Model segments housing into five   categories:     Owned Detached Housing     Rented Detac...
Modeling U.S. Housing Demand       Multinomial logit model is used to identify the        determinants of housing demand...
Modeling U.S. Housing Demand The explanatory variables include   gender, age, and race The estimated coefficients are co...
Modeling U.S. Housing Demand   The partial derivatives are combined with the    Census population projections by    gende...
Modeling U.S. Housing Demand The primary data source is the 1%   2007-2009 American Community   Survey Public Use Microda...
Modeling U.S. Housing Demand Housing stock depreciation rates come   from the 1999-2009 HUD Components   on Inventory Cha...
Results for U.S. Overall
Results for U.S. Overall Owned Detached Housing     Largest category (54%)     Number of units demanded expected      t...
Results for U.S. Overall Rented Detached Housing     Forecast to decrease slightly as      proportion of total housing d...
Results for U.S. Overall Owned Attached Housing     Forecast to experience the largest      increase (32%) in housing de...
Results for U.S. Overall Rented Attached Housing     Second largest category of housing      demanded and is forecast to...
Results for U.S. Overall Owned/Rented Mobile Home     Smallest housing category demanded      and forecast to remain abo...
Results for U.S. Overall A white male age 55-64 is the most likely   of all categories to demand Owned   Detached Housing...
Results for U.S. Overall Non-white males and females in all age   groups are more likely to demand   Owned Attached Housi...
Results for U.S. Overall White females age 18-24 have the   highest probability of all categories and   age groups of dem...
Results for U.S. Overall Non-white males and females age 40-54   are less likely to demand Owned   Detached Housing than ...
Results for U.S. Overall White males age 40-54 are the least   likely to demand Rented Detached   Housing for all ages an...
Results for U.S. Overall Non-white females age 65+ are the most   likely to demand Owned Attached   Housing than all othe...
Results by State - California              Owned       Rented      Owned       Rented      Mobile              Detached   ...
Results by State - California
Results by State - Florida              Owned       Rented     Owned       Rented      Mobile              Detached    Det...
Results by State - Florida
Results by State - Ohio              Owned       Rented     Owned      Rented     Mobile              Detached    Detached...
Results by State - Ohio
Results by State       Although each state has its own growth        pattern, some common themes emerge:         The lar...
Results by State       Although each state has its own growth        pattern, some common themes emerge:         The sou...
THE END
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Forecasting the Demand for Housing in the United States

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G. Stacy Sirmans, Florida State University; David A. Macpherson, Trinity University

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Forecasting the Demand for Housing in the United States

  1. 1. Forecasting the Demand for Housing in the United States G. Stacy Sirmans Florida State University David A. Macpherson Trinity University
  2. 2. Forecasting Housing DemandA Research Project Sponsored by the REALTOR University Research Center National Association of Realtors March 2012
  3. 3. Introduction Interesting time for housing demand in U.S. 2000s decade: Real estate boom; now working through period of correction Simultaneously, baby boomer generation is entering retirement Should reverberate through all sectors of economy including the housing market
  4. 4. IntroductionBIG Question: What is the future of U.S. housing demand given these factors?Smaller Questions: What will be baby boomer living arrangements? How will younger generation absorb housing inventory?
  5. 5. Introduction This study uses a multinomial logit model to forecast the demand for housing in the U.S. Part One estimates U.S. housing demand Part Two estimates demand for the ten largest states
  6. 6. Population The level and makeup of population set the base for housing demand All age categories of adult population increase in absolute numbers, but all decrease as a percentage of total except the age group 65+ 65+ age group increases 78% from 17% to 26% of adult population
  7. 7. Population
  8. 8. Population
  9. 9. Modeling U.S. Housing Demand Model segments housing into five categories:  Owned Detached Housing  Rented Detached Housing  Owned Attached Housing  Rented Attached Housing  Owned/Rented Mobile Home
  10. 10. Modeling U.S. Housing Demand Multinomial logit model is used to identify the determinants of housing demand Dependent variable relates to these housing choices:  Owned Detached Housing  Rented Detached Housing  Owned Attached Housing  Rented Attached Housing  Owned/Rented Mobile Home
  11. 11. Modeling U.S. Housing Demand The explanatory variables include gender, age, and race The estimated coefficients are converted into partial derivatives, measuring the impact of a one-unit change in the explanatory variable on the probability of being in a given housing category
  12. 12. Modeling U.S. Housing Demand The partial derivatives are combined with the Census population projections by gender, race, and 5-year age group to generate a forecast of the demand for the five housing categories Housing forecasts over 2010-2030 are provided for the U.S. overall and for all 50 states, with discussion of the 10 largest states
  13. 13. Modeling U.S. Housing Demand The primary data source is the 1% 2007-2009 American Community Survey Public Use Microdata Sample The sample is restricted to U.S. residents age 18 and over The sample size is 6,693,821
  14. 14. Modeling U.S. Housing Demand Housing stock depreciation rates come from the 1999-2009 HUD Components on Inventory Change Reports State-specific vacancy rates are from the U.S. Census Bureau Housing Vacancy Survey Reports
  15. 15. Results for U.S. Overall
  16. 16. Results for U.S. Overall Owned Detached Housing  Largest category (54%)  Number of units demanded expected to grow about 20%  Proportion of total housing demanded remains about the same
  17. 17. Results for U.S. Overall Rented Detached Housing  Forecast to decrease slightly as proportion of total housing demanded  Number of units demanded expected to grow about 17%
  18. 18. Results for U.S. Overall Owned Attached Housing  Forecast to experience the largest increase (32%) in housing demanded  Proportion of total housing demanded expected to increase slightly from about 7.62% to 8.35%
  19. 19. Results for U.S. Overall Rented Attached Housing  Second largest category of housing demanded and is forecast to increase 21%  Proportion of total housing demanded expected to increase only slightly to 23%
  20. 20. Results for U.S. Overall Owned/Rented Mobile Home  Smallest housing category demanded and forecast to remain about 6% of total  Total units demanded will increase about 20%
  21. 21. Results for U.S. Overall A white male age 55-64 is the most likely of all categories to demand Owned Detached Housing The likelihood of demanding Rented Detached Housing decreases with age for all categories
  22. 22. Results for U.S. Overall Non-white males and females in all age groups are more likely to demand Owned Attached Housing than either white males or white females Non-white females age 18-24 are the most likely of any category or age group to demand Rented Attached Housing
  23. 23. Results for U.S. Overall White females age 18-24 have the highest probability of all categories and age groups of demanding a mobile home Non-white males and non-white females of all ages have a lower likelihood of demanding a mobile home than white males age 18-24
  24. 24. Results for U.S. Overall Non-white males and females age 40-54 are less likely to demand Owned Detached Housing than their white counterparts Non-white females age 40-54 have the highest probability of demanding Rented Detached Housing than all other age groups or categories
  25. 25. Results for U.S. Overall White males age 40-54 are the least likely to demand Rented Detached Housing for all ages and categories Starting at age 40, white females are more likely than white males to demand Owned Attached Housing and the probability increases with age
  26. 26. Results for U.S. Overall Non-white females age 65+ are the most likely to demand Owned Attached Housing than all other categories and age groups The likelihood of a white male or white female demanding Rented Attached Housing decreases with age until age 65
  27. 27. Results by State - California Owned Rented Owned Rented Mobile Detached Detached Attached Attached Home2008 Units 5,699,015 1,460,906 918,096 3,651,295 451,7992030 Units 7,146,934 1,754,602 1,212,908 4,468,672 596,687% Change 25% 20% 32% 22% 32%Proportions2008 46.79% 11.99% 7.54% 29.98% 3.71%2030 47.16% 11.53% 7.99% 29.37% 3.95%
  28. 28. Results by State - California
  29. 29. Results by State - Florida Owned Rented Owned Rented Mobile Detached Detached Attached Attached Home2008 Units 3,500,478 602,115 875,354 1,418,235 632,0142030 Units 5,454,939 893,749 1,563,008 2,148,330 1.038M% Change 56% 48% 79% 52% 64%Proportions2008 49.81% 8.57% 12.45% 20.18% 8.99%2030 49.15% 8.05% 14.08% 19.36% 9.35%
  30. 30. Results by State - Florida
  31. 31. Results by State - Ohio Owned Rented Owned Rented Mobile Detached Detached Attached Attached Home2008 Units 2,788,250 415,261 200,070 949,816 165,5572030 Units 2,822,172 409,292 234,634 966,860 165,253% Change 1% -1% 17% 2% -0.2%Proportions2008 61.70% 9.19% 4.43% 21.02% 3.66%2030 61.38% 8.90% 5.10% 21.03% 3.59%
  32. 32. Results by State - Ohio
  33. 33. Results by State Although each state has its own growth pattern, some common themes emerge:  The largest growth categories are Owned Detached and Owned Attached Housing  The northern states (Illinois, Pennsylvania, Ohio, Michigan) are predicted to have relatively low increases in housing demand
  34. 34. Results by State Although each state has its own growth pattern, some common themes emerge:  The southern states (Texas, Florida, Georgia, North Carolina) are predicted to have much greater future housing demand  Although most states will experience an overall increase in housing demand, the proportionate demand for each category is
  35. 35. THE END

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