1. Economic and Real Estate Market Outlook
By Lawrence Yun, Ph.D.
Chief Economist, National Association of REALTORS®
Presentation at Delaware Association of REALTORS®
April 11, 2017

2. Lifetime Wealth at All-Time High

3. Median Household Income (Inflation Adjusted)

4. Annual GDP … Below 3% for 11 straight years

5. Sluggish Business Spending Despite High Profit

6. Animal Spirit Revival? Small Business Optimism

7. Animal Spirit Revival? Consumer Confidence

8. Stock Market: S&P 500 Index

9. Jobs (8 million lost … 15 million gained)
In thousands

10. Total Jobs in Delaware (9% growth vs 11% nationwide from 2000 )
In thousands

11. Non-farm Employment Growth By State

12. Recession over the Horizon?

13. Total Job Openings
In thousands

14. Total Job Separations (Layoffs and Quits)
In thousands

15. Weekly Initial Unemployment Insurance Filings
In thousands

16. Auto Sales (Annualized Rate)

17. Migration Fear Index

18. Probability of Recession – one year out (NY Fed: based on interest rate spread)

19. Housing Market Turning?

20. Dollar Volume Growth Rate %

21. “Is it a good time to buy?” Renters’ Sentiment Changing

22. Is Owning still American Dream? Will you Buy in Future?

23. REALTOR Buyer Traffic Index (% change from a year ago)

24. Mortgage Purchase Applications (% change from a year ago)

25. Rent Growth (% change from a year ago)

26. Home Price Index: U.S. and DE

27. Home Price Index: U.S. and DE

28. Home Price Index – CO and PA

29. Serious Delinquency Rate
U.S. All Mortgages

30. How’s the Commercial Real Estate Market?

31. Apartment %
Source: CBRE via ULI

32. Office %
Source: CBRE via ULI

33. Industrial-Warehouse%
Source: CBRE via ULI

34. Retail %
Source: CBRE via ULI

35. Why Industrial Outperforms?

36. Past Non-Store Retail Sales

37. Tom Barrack “Real Estate Market is Getting Bubblicious”

39. Commercial Property Price may be Bubblish (60% gain in 5 years)
Source: Federal Reserve

40. Commercial Investment Sales of Large Properties (Properties valued at $2.5 million and over)

41. Forecast

42. Fed Rate Hike in December ‘15 in December ‘16 then 3 times again in ‘17? Also, unwinding of Fed Bond Purchases?

43. Economic Forecast 2015 2016 Likely 2017 Forecast 2018 GDP Growth 2.6%
1.5%
2.1%
2.5%
Job Growth
+2.6 million
+2.0 million
+2.1 million
+2.4
million
CPI Inflation
0.3%
1.2%

44. Housing Forecast 2015 2016 Likely 2017 Forecast 2018 New Home Sales
500,000
570,000
620,000
700,000
Existing Home Sales
5.3 million
5.4 million
5.5 million
5.7 million
Median Price Growth
+ 6.8%
+5.3%
4.0%
3.2%
30-year Rate
3.9%
3.6%
4.4%
4.8%

45. Trump Presidency Dodd-Frank?
Need Construction Workers … Community College Training
Fannie/Freddie and Mortgage Availability?
Tax Simplification? and Mortgage Interest Deduction and 1031 exchange
Natural Disaster and Flood Insurance?
EPA, land use, development fees?

46. Upcoming Research from Rosen Consulting
Homeownership in Crisis
Major Hurdles Facing Housing Market
Dodd-Frank, mortgage availability, student debt, deteriorating affordability, zoning restrictions, construction costs
Policies to Safely increase Homeownership Rate
Alternative credit scores, GSEs, Lease-Purchase, financial counseling, building starter homes