2016 market update September 20, 2016 Glendale AOR

2016 market update September 20, 2016 Glendale AOR
Leslie Appleton-Young, C.A.R. Chief Economist

Hope to See You in Long Beach!
SAVE THE DATE! Hope to See You in Long Beach! Meet us in Long Beach this fall to extend the Who’s Your REALTOR®? fun at EXPO! Head down south with us Sept for three days full of business tips, tools, networking, education, and more. Registration opens May 18 and you can read all about this year’s show at expo.car.org. Let’s check out some highlights… REGISTRATION OPENS MAY 18 expo.car.org

EXPO HIGHLIGHTS You heard it right, Tech Tuesday is back in SoCal for the first time in 5 years! We have an entire day packed with hands-on learning, today’s tech must-haves, and new ways you can impress your clients EXPO will also offer more than 30 education sessions, 200+ exhibit hall booths, and the popular Club C.A.R. – all for FREE! You can even tailor your EXPO with specialized offerings such as the Broker and YPN Conferences – both back this year Be sure to register early for lunch! On Tuesday, David Pogue, founder of Yahoo! Tech and former New York Times columnist will take the stage to entertain and enlighten us On Wednesday, Captain Mark Kelly, the commander of Space Shuttle Endeavor’s final mission and current NBC News/MSNBC contributor, will inspire us with his talk on leadership, determination, and courage. And closing out the show, our very own Leslie Appleton-Young will provide your annual insight on today’s pressing housing issues Stay tuned for more about this year’s show, don’t forget to register on May 18, and we’ll see you in Long Beach!

EXPO HIGHLIGHTS Captain Mark Kelly David Pogue
TUESDAY WEDNESDAY THURSDAY Tech Tuesday is back in SoCal! Full-day Broker Conference Full-day Broker Conference More FREE EXPO educational sessions Ha Hall opens at 2pm with over 200 exhibitor booths Half-day YPN Evolve Conference CE Course Credit available EXPO HIGHLIGHTS 30+ FREE EXPO educational sessions across 3 days New, exciting session formats Networking, prizes and EXPO Treasure Hunt Leslie Appleton-Young Keynote Lunch Speaker Captain Mark Kelly Keynote Lunch Speaker David Pogue Keynote Lunch Speaker You heard it right, Tech Tuesday is back in SoCal for the first time in 5 years! We have an entire day packed with hands-on learning, today’s tech must-haves, and new ways you can impress your clients EXPO will also offer more than 30 education sessions, 200+ exhibit hall booths, and the popular Club C.A.R. – all for FREE! You can even tailor your EXPO with specialized offerings such as the Broker and YPN Conferences – both back this year Be sure to register early for lunch! On Tuesday, David Pogue, founder of Yahoo! Tech and former New York Times columnist will take the stage to entertain and enlighten us On Wednesday, Captain Mark Kelly, the commander of Space Shuttle Endeavor’s final mission and current NBC News/MSNBC contributor, will inspire us with his talk on leadership, determination, and courage. And closing out the show, our very own Leslie Appleton-Young will provide your annual insight on today’s pressing housing issues Stay tuned for more about this year’s show, don’t forget to register on May 18, and we’ll see you in Long Beach!

Economic outlook

BREXIT: Markets were surprised

Brexit’s Direct effects for the U.S. Economy are limited
The UK accounted for less than 4 percent of American exports of goods in 2015, equivalent to 0.4 percent of U.S. GDP Direct economic impact on the U.S. would be small, even if the UK economy slipped into recession. SOURCE: Wells Fargo

Indirect effects are more significant
Financial markets meltdown after the Brexit vote Adjusted Closed -3.6% Negative Impact: Decline in stock prices lowers consumer spending due to adverse wealth effect Strong $ weakens international trade Emerging markets struggle to adjust to lower commodity prices Positive Impact: Lower interest rate environment supports housing and refinancing activity Lower energy prices benefit consumers in the long run, with consumer spending more than offset the hit to the energy sector Reduces over-valuation in asset markets and minimizes risk for a shaper downturn. Allows Fed to raise rates more slowly SOURCE: Yahoo Finance

Silver lining for economic weakness and uncertainty …
Treasury yield dropped to fresh low amid global bond rally Fed may raise rate once or twice in the second half of 2016, but long-term rates will remain low as foreign cash flood into U.S. bond 06/24/16: 10 Yr. – 1.57% 30 Yr. – 2.43% SERIES: Treasury Yield 10 Yr., Treasury Yield 30 Yr. SOURCE: Yahoo Finance

Fed Meets tomorrow – have rate hike odds “weakened”? or have they?
8/26/16 Rate hike odds have “strengthened” Next meeting September 21-22 6/6/16 Federal Reserve Chairwoman Janet Yellen affirmed Monday that the central bank won’t be raising short-term interest rates until new uncertainties about the economic outlook are resolved. Falling oil prices, china’s slowdown, rocky stock markets, May jobs report and UK vote to leave the EU -- Brexit

Rates heading up slightly: 3 mO high
Today’s rates: FRM 3.64% ARM 2.91% Bond market sell-off last few weeks MONTHLY WEEKLY Monthly from 2009 to present, weekly for the past 8 weeks 9/20/16 Why rising? re elevated following the bond market sell-off (pries down, yields up) that began two weeks ago. Yields on 10-year Treasuries were as low as 1.54% on September 7th, and rose as high as 1.73% by September 13th, closing the week at 1.69%. Mortgage rates followed suit. Last week’s Primary Mortgage Market Surveyfrom Freddie Mac reported the average rate on 30-year fixed-rate mortgage was 3.50% with 0.5 points. This is the highest 30-year rate Freddie Mac has reported in close to three months. Weak economic data issued last week. Several reports on manufacturing disappointed and August’s Retail Sales numbers were weak. The Atlanta Fed’sGDPNow forecast for the third quarter was revised down from +3.3% to +3.0%. One positive was that the Producer Price Index showed a slight uptick, although inflation is still not close to the Fed’s 2.0% target. The Freddie Mac report sometimes lags the market because of the way the survey is conducted. The responses are collected early in the week, and the survey results are released on Thursday. In this case, however, yields are relatively close to where they were early in the week, so the survey results are more or less representative of where rates are today. Rates are probably going to stick around current levels for the next few days as we wait to hear the results of the Fed meeting on Wednesday. More on that after the jump. SERIES: 30Yr FRM, 5Yr ARM SOURCE: Freddie Mac

How will housing fare? On average, some months during an election year perform better than the long-run average for that month, while others are worse (again, on average). This suggests that overall economic and market conditions dominate the decision to buy and sell a home, rather than the recurrence of the election cycle. A naïve analysis might even point out that sales and price growth “seem” higher during an election than the typical year. For example, during the last 5 election cycles ( ) growth in home sales out-performed its long-run average in 56 of the 72 months observed or roughly 78% of the time.

Macro Economy Summary August Retail Sales Weak -.3%
1.2% GDP 2016-Q2 4.2% Consumption Q2 4.9% Unemployment 1.7% Job Growth Sales at U.S. retailers fell in August for the first time in five months as traffic dropped off for most stores, a sign that third-quarter growth might not be as strong as previously estimated. Retail sales declined a seasonally adjusted 0.3%, the government said Thursday. Economists surveyed by MarketWatch had forecast a 0.1% decline. Retail sales have zig-zagged for months, mirroring a U.S. economy whose growth has flagged. Some segments such as online shopping have been doing great, while more traditional sellers such as department stores have fared poorly.

2009 Largest Annual Drop since 1946 (-2.8%)
US GDP: Poor start for the 1st Half PCE Recovered in Q2, But investment still weak 2015: 2.6%; 2016 Q2: 1.2%; 2016 (P): 1.6%; 2017(F): 2.2% ANNUAL PERCENT CHANGE, CHAIN-TYPE (2009) $ ANNUALLY QUARTERLY Notes: E – expected, F – forecast, P- preliminary 1929 though first quarter 2009 annual GDP figures were revised in July 2009 using 2005 benchmark. 2009 Largest Annual Drop since 1946 (-2.8%) SERIES: GDP SOURCE: US Dept. of Commerce, Bureau of Economic Analysis 14

Weak global Economic Growth persists in 2016 …
World Export & Industrial Production Volume Year-over-Year % Chg. Weak growth in global industrial production and world exports Softer-than expected growth in advanced economies Decline in commodity prices Heightened political uncertainties (e.g. BREXIT) Volatile equity markets Central banks on hold EU and Japan held policy steady after monetary easing U.S. Fed paused its rate hike Weak US economic growth in Q116, but recent activity suggested a bounce back Chinese economy continued to slow down, but downward adjustment should remain relatively gradual Stabilization and rebound in commodity prices, helped Canada, Australia, and many emerging markets. BOJ and ECB appear to be on hold for the time being as they weigh the impact of prior easing measure. Brazil’s president (Dilma Rousseff) impeachment creates uncertainty and dampen the possibilities of a prompt economic recovery Fiscal and structural policies need to be implemented for the global economy to emerge from the low growth trap. SOURCE: Wells Fargo Securities

Crude Oil Prices Dollars per Barrel SOURCE:
SERIES: Crude Oil Prices: West Texas Intermediate SOURCE: U.S. Energy Information Administration

Personal Consumption 2015: 2.6%; 2016 Q2: 4.4% QUARTERLY ANNUALLY
ANNUAL PERCENT CHANGE ANNUALLY QUARTERLY SERIES: Personal Consumption SOURCE: US Dept. of Commerce, Bureau of Economic Analysis 17

Components of GDP ANNUAL PERCENT CHANGE
1929 though first quarter 2009 annual GDP figures were revised in July 2009 using 2005 benchmark. SERIES: Components of GDP SOURCE: US Dept. of Commerce, Bureau of Economic Analysis 18

Unemployment Rates Near 8-year low
US 4.9% (August 2016), CA 5.5% (July 2016) CA: 5/14 7.6% 4/13 7.8% 3/14 8.1% 2/14 8.0% 1/14 8.1% 12/13 8.3% 11/13 8.5% 10/13 8.7% 9/13 8.7% 8/13 8.9% 7/13 8.5% 6/13 8.5% 5/13 8.6% 4/13 9.0% 3/13 9.4% 2/13 9.6% 1/13 9.8% 12/12 9.8% 11/12 9.9% 10/ % 9/ % 8/ % 7/ % 6/ % 5/ % 4/ % 3/ % 2/1210.8% 1/ % 12/ % 11/ % 10/ % 09/ % 08/ % 07/ % 06/ % 05/ % 04/ % 03/ % 02/ % 01/ % 12/ % 11/ % 10/ % 9/ % 8/ % 7/ % 6/ % 5/ % 4/ % 3/ % 2/ % / % / % / % 10/ % 9/ % 8/ % 7/ % 6/ % 5/ % 4/ % 3/ % 2/ % 1/09 9.7% US: 6/14 6.1% 5/14 6.3% 4/13 6.3% 3/14 6.7% 2/14 6.7% 1/14 6.6% 12/13 6.7% 11/13 7.0% 10/13 7.3% 09/13 7.2% 08/13 7.3% 07/13 7.4% 06/13 7.6% 05/13 7.6% 04/13 7.5% 03/13 7.6% 02/13 7.7% 01/13 7.9% 12/12 7.8% 11/12 7.8% 10/12 7.9% 9/12 7.8% 8/12 8.1% 7/12 8.2% 6/12 8.2% 5/12 8.2% 4/12 8.1% 3/12 8.2% 2/12 8.3% 1/12 8.3% 12/11 8.5% 11/11 8.6% 10/11 8.9% 09/11 9.0% 08/11 9.0% 07/11 9.0% 06/11 9.1% 05/11 9.0% 04/11 9.0% 03/11 8.9% 02/11 9.0% 01/11 9.1% 12/10 9.3% 11/10 9.8% 10/10 9.5% 9/10 9.5% 8/10 9.5% 7/ % 6/ % 5/ % 4/ % 3/ % / % /10 9.8% /09 9.9% / % 10/ % 9/09 9.8% 8/09 9.6% 7/09 9.5% 6/09 9.5% 5/09 9.4% 4/09 9.0% 3/09 8.7% 2/09 8.3% 1/09 7.8% Based on revised figures during EDD’s early-2009 rebenchmarking, CA job market has been on a par with US market over past several months. SOURCE: SERIES: Unemployment Rate SOURCE: US Bureau of Labor Statistics, CA Employment Development Division

Unemployment rate by California Metro Area
July 2016: California 5.5% Source: SERIES: Total Nonfarm Employment SOURCE: CA Employment Development Division

June & July Gains of 250k+; 151,000 in august Avg
June & July Gains of 250k+; 151,000 in august Avg. 186k in 2016, 228k in 2015 Recession Job Losses: 8.8 million Since Jan’10: million MONTH TO MONTH CHANGE in more formatting options : 1 month net change Also in US Nonfarm Employment.xls, column I. SERIES: Employment Growth SOURCE: US Bureau of Labor Statistics 21

Ca jobs growing faster than nation
ANNUAL PERCENT CHANGE SERIES: Total Nonfarm Employment SOURCE: US Bureau of Labor Statistics, CA Employment Development Division

Job Trends by California Metro Area
July 2016: CA +2.3%, +374,600 last 12 months ANNUAL PERCENT CHANGE Source: SERIES: Total Nonfarm Employment SOURCE: CA Employment Development Division

California Job Changes by Industry
July 2016: CA +2.3%, +374,600 last 12 months ANNUAL PERCENT CHANGE Source: SERIES: Total Nonfarm Employment By Industry SOURCE: US Bureau of Labor Statistics, CA Employment Development Division

Consumer Confidence Index
August 2016: 101.1 INDEX, 100=1985 SERIES: Consumer Confidence SOURCE: The Conference Board

U.S. Economic Outlook U.S. economic growth should improve in 2017 as energy and commodity prices continue to improve in the upcoming year. The bounce back in oil prices should help the energy sector and stabilize economic growth for those states that rely heavily on oil drilling. As we are already at or near full employment level, unemployment rate will dip down but only slightly as skilled workers in the labor market remain in short supply. The labor supply shortage, along with steady increase in energy and commodity prices, will put upward pressure on overall price level and lead to higher inflation in 2007. To keep inflation under control, the Fed will most likely raise rate by 50 basis points throughout the year 2017. With global economic and political uncertainty subsiding, long term interest rates will steadily rise but continue to increase at a slow pace SERIES: U.S. Economic Outlook SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

California Economic Outlook
SERIES: CA Economic Outlook SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

California housing market outlook

CA Sales stuck since in Neutral 2010
California 2015 Sales: 407,060 Units, Up 6.4% YTY Peak:624,957 units in 2005 Valley:189,345 units in 1982 2012 annual sales up 4.3% from 2011 2011 annual sales up 1.4% from 2010 2010 annual sales down 12.3% from 2009 2009 annual sales up 24.5% from 2008 2008 annual sales up 30.4% from 2007 2007 annual sales down 33.4% from 2006 2006 annual sales down 23.8% from 2005 2005 annual sales up 0.8% from 2004 2004 annual sales up 3.8% from 2003 2003 annual sales up 7.6% from 2002 2002 annual sales up 14.1% from 2001 2001 annual sales down 4.7% from 2000 YTD 2000 annual sales up 1.4 from 1999 1999 sales up 7.3% over 1998 10/93: 41.0 Consumer Confidence 01/00: 03/03: 63.0 5/07: 128.4 2/09: 23.9 SERIES: Sales of Existing Single Family Homes SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® *Sales are seasonally adjusted and annualized

Sales of Existing Detached Homes
California, August 2016 Sales: 420,360 Units, -0.4% YTD, -2.2% YTY Aug-15: 429,900 Aug-16: 420,360 Peak:624,957 units in 2005 Valley:189,345 units in 1982 2012 annual sales up 4.3% from 2011 2011 annual sales up 1.4% from 2010 2010 annual sales down 12.3% from 2009 2009 annual sales up 24.5% from 2008 2008 annual sales up 30.4% from 2007 2007 annual sales down 33.4% from 2006 2006 annual sales down 23.8% from 2005 2005 annual sales up 0.8% from 2004 2004 annual sales up 3.8% from 2003 2003 annual sales up 7.6% from 2002 2002 annual sales up 14.1% from 2001 2001 annual sales down 4.7% from 2000 YTD 2000 annual sales up 1.4 from 1999 1999 sales up 7.3% over 1998 10/93: 41.0 Consumer Confidence 01/00: 03/03: 63.0 5/07: 128.4 2/09: 23.9 SERIES: Sales of Existing Single Family Homes SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® *Sales are seasonally adjusted and annualized

California Sales (Jan 2000 – Present)
SERIES: Sales of Existing Single Family Homes, Not Seasonally Adjusted SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® 31

California Sales (Jan 2010 – Present)
SERIES: Sales of Existing Single Family Homes, Seasonally Adjusted SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® 32

Median Price of Existing Detached Homes
California, Aug. 2016: $526,580, +1.7% MTM, +5.8% YTY Aug-16: $526,580 Aug-15: $497,520 SERIES: Median Price of Existing Single Family Homes SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Home Price Appreciations Have Moderated Since Mid 2013
YTY% Chg. in Price SERIES: Sales of SFH and Condo Units SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Price Per Square Foot August 2016: $246, Down 0.4% MTM, Up 4.7% YTY
PRICE PER SQ. FT. Aug-16: $246 Aug-15: $235 SERIES: Median Price Per Square Feet SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

inventory below last year
August 2016: 3.4 Months; August 2015: 3.6 Months Range since 1988: Low: 1.3 months in April 2004 High: 18.8 months in Feb 1991 Long-run average: 6.9 months Note: “Unsold Inventory Index” represents the number of months it would take to sell the remaining inventory for the month in question. The remaining inventory for the month is defined as the number of properties that were “Active”, “Pending”, and “Contingent” (when available) and divide the sum by the number of “Sold” properties for the month in question. SERIES: Unsold Inventory Index of Existing Single Family Homes SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Affordability challenge for repeat buyers
Where is the inventory? Affordability challenge for repeat buyers Low rate on current mortgage Low property taxes Capital gains hit is onerous Why sell when there is nowhere to go I can afford? Could not qualify for a mortgage today Headed for the “European Model” where children inherit the home of their parents? One more thing… Secular decline in marriage Secular decline in the marriage rate Educ mis-match. More women are getting educated and women don’t like to mary “down”

Fewer housing units being turned over since the Great Recession
Housing Turnover Rate (Single-Family Homes only) SERIES: Percent of existing single-family homes being sold SOURCE: Census Bureau, American Community Survey, Moody’s Analytics, C.A.R.

Years Owned Before Sale highest in 30 years
Q: How long had the seller lived in their home? SERIES: 2015 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

“missing” 66,000 new units annually
2015: 95,822 (42,959 sf, 52,863 mf) 2016f: 98,301 total units Household Growth: 165,000/yr SERIES: New Housing Permits SOURCE: Construction Industry Research Board

Household Formation rebounding
SERIES: Household Formation SOURCE: U.S. Census Bureau, Housing Vacancy Survey

Housing Affordability peaked q1 2012 prices v
Housing Affordability peaked q prices v. low rates and income growth California vs. U.S. – % OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME Annual Quarterly C.A.R.’s traditional Housing Affordability Index (HAI) was replaced with the First-Time Buyer Housing Affordability Index (FTB-HAI) in 2006. Note this slide takes the average of the 3 months in each of the quarters. C.A.R. began producing its Housing Affordability Index (HAI) in At that time, fixed-rate mortgages were the prevailing form of financing a home purchase, while the calculations used to produce the HAI reflected a 20 percent down payment. The methodology also assumed a monthly payment for principal, interest, taxes and insurance that was no more than 30 percent of a household’s income. In the more than two decades since the CALIFORNIA ASSOCIATION OF REALTORS® first conceived the HAI, the mortgage finance landscape has changed dramatically. The range of mortgage products available to buyers as well as underwriting criteria has changed. C.A.R. developed the new index measuring affordability for first-time home buyers to better reflect the realities of today’s real estate market. SERIES: Housing Affordability Index of Traditional Buyers SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Housing Affordability In CA: by county
2016-Q2: % able to purchase median-priced home SERIES: Housing Affordability Index SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

How Wages measured against Income Required to buy a Home
California 2015 Annual Mean Wage Wage data is from May 2015; Min. income to buy a med. Home from Q215 SOURCE: Bureau of Labor Statistics, C.A.R.

Share of First-Time Buyers remains Below Long-Run Average
SERIES: 2015 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Regional markets: los angeles county

Los Angeles County Employment Should Continue to Grow in 2016 & 2017

Household Formation rebounding
SERIES: Household Formation, Los Angeles County SOURCE: California Department of Finance, E5 Housing Estimates

Home Sales slightly behind last year
Los Angeles County, 2015: +4.1%, 2016 YTD: -2.3% SERIES: Sales of Existing Detached Homes SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

July sales dropped primarily because of seasonality
LA County, July-16 Sales: 3,469 Units, -2.3% YTD, % YTY Sales dropped from last year mainly because July 2016 had two fewer trading days than July 2015. Peak: 60,922 units in 2005 Valley: 28,044 units in 1993 2012 annual sales 6.6% from 2011 2011 annual sales down 4.7% from 2010 2010 annual sales down 10.2% from 2009 2009 annual sales up 24.9% from 2008 2008 annual sales up 29.2% from 2007 2007 annual sales down 35.6% from 2006 2006 annual sales down 20.4% from 2005 2005 annual sales up 5.2% from 2004 2004 annual sales down 2.9% from 2003 2003 annual sales up 2.2% from 2002 2002 annual sales up 7.1% from 2001 2001 annual sales up 3.2% from 2000 2000 annual sales up 3.9% from 1999 10/93: 41.0 01/00: 03/03: 63.0 5/07: 128.4 2/09: 24.3 SERIES: Sales of Existing Single Family Homes SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Median Price of Existing Detached Homes
Los Angeles County, Jul. 2016: $513,700, Up 4.8% YTY Los Angeles County, 2015: $476,830, Up 6.1% Valley:$171,103 in 1996 High: $625,812 in Sept 2007 2012 annual median price 6.4% from 2011 2011 annual median price down 4.8% from 2010 2010 annual median price up 7.9% from 2009 2009 annual median price down 21.8% from 2008 2008 annual median price down 35.0% from 2007 2007 annual median price up 2.1% from 2006 2006 annual median price up 11.4% from 2005 2005 annual median price up 18.5% from 2004 2004 annual median price up 25.1% over 2003 2003 annual median price up 21.3% over 2002 2002 annual median price up 18.5% over 2001 2001 annual median price up 12.2% over 2000 2000 annual median price up 8.3% over 1999 Early 1990s Peak: May 1991, $229,260, surpassed in May 2001, $232,712 SERIES: Median Price of Existing Single Family Homes SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Unsold Inventory Index
Los Angeles County, July 2016: 3.6 Months Supply of homes has remained below the long-run average in recent months. Average: 8.0 Months Low: 1.2 Months, December 2003 High: 27.9 Months, February 1991 Note: The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration. Inventory includes listings with “Active”, “Pending”, and “Contingent” (when available) statuses. SERIES: Unsold Inventory Index of Existing Single Family Homes SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Glendale Zip code: 90077 53

Sales of Single Family Homes
Glendale, August 2016: 58 Units +6.1% 2015, -11.9% 2016 YTD, -28.4% YTY SOURCE: Clarus Market Metrics 54

Median Price of Single Family Homes
Glendale, August 2016: $854,000 Down 5.1% MTM, Up 10.9% YTY SOURCE: Clarus Market Metrics 55

SOURCE: Clarus Market Metrics
For Sale Properties Glendale, August 2016: 291 Units -2.9% 2015, -4.8% 2016 YTD, +2.8% YTY Note: “For Sale Properties” represents the overall supply that exist throughout the entire month, including any listings that appear as “Active” any point in time during the month. SOURCE: Clarus Market Metrics 56

Burbank 57

Burbank, August 2016: 58 Units +2.8% 2015, -5.0% 2016 YTD, +5.5% YTY SOURCE: Clarus Market Metrics 58

Burbank, August 2016: $757,500 Up 3.0% MTM, Up 7.4% YTY SOURCE: Clarus Market Metrics 59

For Sale Properties Burbank, August 2016: 208 Units +13.2% 2015, -1.3% 2016 YTD, +3.0% YTY Note: “For Sale Properties” represents the overall supply that exist throughout the entire month, including any listings that appear as “Active” any point in time during the month. SOURCE: Clarus Market Metrics 60

Pasadena Zip codes: 90068, 90048, 90046, 90069 61

Pasadena, August 2016: 81 Units +8.3% 2015, -8.1% 2016 YTD, -5.8% YTY SOURCE: Clarus Market Metrics 62

Pasadena, August 2016: $842,000 Up 2.1% MTM, Up 8.6% YTY SOURCE: Clarus Market Metrics 63

For Sale Properties Pasadena, August 2016: 373 Units +5.5% 2015, -0.8% 2016 YTD, -6.8% YTY Note: “For Sale Properties” represents the overall supply that exist throughout the entire month, including any listings that appear as “Active” any point in time during the month. SOURCE: Clarus Market Metrics 64

Migration and Affordability
The Cases of Southern California & the San Francisco Bay Area

Affordability & Migration are closely Linked
Home price-to-income ratio = absolute affordability That relates to the question of home ownership Premium/discount of one region over another This is a region’s RELATIVE affordability Relates to question of where to live within region As premium of living in a “core market” grows, migration picks up in affordable, adjacent areas In Southern California, this is the Inland Empire In the Bay Area, this is primarily the East Bay/Delta Relative affordability isn’t only story: JOBS still matter But, as the labor market tightens, affordability will become a more important driver of migration

Riverside County As costal premium increased, in-migration to Riverside responded 1-2 years later Less response with job losses, shift happening now SOURCE: California Department of Finance and California Association of REALTORS®

more Inbound Commuters to SoCal Core
Number of Jobs Filled by Inbound Commuters SERIES: Number of Local Jobs Filled by Inbound Commuters SOURCE: U.S. Census Bureau, American Community Survey

Inland Empire Residents Increasingly Crossing County Lines for work
Number of Residents Commuting Outside County for Work SERIES: Number of Local Residents Commuting to Jobs Located Outside of Home County SOURCE: U.S. Census Bureau, American Community Survey

2014 Los Angeles County Migration Net Loss to San Bernardino
SOURCE: U.S. Census Bureau, American Community Survey

2014 San Bernardino County Migration Net Loss to Riverside

2014 Orange County Migration Net Loss to Riverside

2014 Riverside County Migration Net loss to sacramento

2014 San Diego County Migration Net loss to los angeles

2014 Ventura County Migration net loss to Santa Barbara

The Boomers and their Next Move

Older Generations In Particular are not moving as Often
71% of Californian’s aged 55+ haven’t moved since 1999 SERIES: Distribution of Home Ownership by Year Moved In SOURCE: U.S. Census Bureau, 2013 American Housing Survey

Older Generations In Particular are not moving as Often
Almost half have been in their homes for at least 25 years SERIES: Distribution of Home Ownership by Year Moved In SOURCE: U.S. Census Bureau, 2013 American Housing Survey

Boomers – born between 1946-1965
Average: 59 Q1 Mean: 59.4 Median: 59 What is your age? SERIES: 2016 Generations / Boomer Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Majority are Married What is your marital status? Q47
SERIES: 2014 Baby Boomer Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

3/4 Baby Boomers are Home Owners
Q3 What is your current living situation? SERIES: 2014 Baby Boomer Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Most Have Equity in their Home
Do you have equity in your home? SERIES: 2014 Baby Boomer Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Majority Do Not Plan to Sell Home When they Retire
Q8 Do you plan to sell your current home when you retire? SERIES: 2014 Baby Boomer Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Majority Worry About Childrens’ Ability to Become Home Owners
Q20 Do you worry about your children’s ability to become home owners in the future? SERIES: 2014 Baby Boomer Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Time to talk: 2/5 Plan to Help Children with Down Payment
Q21 Do you plan to help your children with their down payment to purchase a home? SERIES: 2014 Baby Boomer Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

What Keeps Boomers Up At Night?
Q23 Q: What keeps you up at night? SERIES: 2014 Baby Boomer Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Millennials: tomorrow’s Home owners?

Maslow’s Hierarchy of needs: Revised
Q20

Over 1/3 Live with their Parents
Q: What is your current living situation? SERIES: 2014 Millennials Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Attitude toward the home buying process – mixed results
SOURCE: How would you describe your attitude towards the home buying process? C.A.R Millennial Survey

Most millennials uncertain/doubtful that they could obtain a mortgage now?AMillennial Ethnicity
SOURCE: C.A.R Millennial Survey Q: Could you obtain a mortgage if you applied now ?

People would prefer the following over going through the home mortgage process again:
SOURCE: Guaranteed Rate Mortgage Survey of 1,000 adults 25 and older USA Today April 2014

2016 forecast

California Housing Market Outlook
SERIES: CA Housing Market Outlook SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Take 5: 2016 Market CA home sales flat with prices up mid - single digits in 2016 Fundamental demand drivers (jobs; rates; household formation) are strong Housing affordability an insurmountable hurdle for many Millennials Trading up/down is too expensive for Boomers CA will see accelerating out-migration of Millennials in search of housing they can afford

Book Recommendations

The all-new Housing Matters Podcast is your housing hub for market analysis, economic trends, and housing news from the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) and its institute the Center for California Real Estate. Be sure to subscribe on iTunes to hear the latest episode every Friday to learn what you need to know about the market from C.A.R. experts who will give you their take on the week’s top real estate stories.

Stay connected with Research
CARResearchGroup CARResearchInfo On.car.org/CARResearch Housingmatters.car.org

Thank You! www.car.org/marketdata lesliea@car.org
This presentation can be found on Speeches & Presentations

2016 market update September 20, 2016 Glendale AOR

Similar presentations

Presentation on theme: "2016 market update September 20, 2016 Glendale AOR"— Presentation transcript:

Similar presentations

About project

Feedback

Log in

Auth with social network:

2016 market update September 20, 2016 Glendale AOR

Similar presentations

Presentation on theme: "2016 market update September 20, 2016 Glendale AOR"— Presentation transcript:

Similar presentations

About project

Feedback