1. October 15, 2012 Our Region’s Housing Market: What are price trends likely to be over the next 5 years? Lisa A. Sturtevant, PhD Center for Regional Analysis School of Public Policy George Mason University Adapting Inclusionary Zoning to a Changing Housing Market

2. The Washington Economy

3. Annual Job Change Washington MSA (000s) Annual Data Annual Month over Year 2009 2010 2011 2012 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

4. Job Change by Sector Aug 2011 – Aug 2012 Washington MSA (000s) Total = 38,200 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

5. 8.8 – DC 8.1 – U.S. 6.0 – SMD 5.5 – MSA 4.3 - NVA Unemployment Rate Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

6. The Washington Area Housing Market

7. Sources: ACS 2010 1-yr Estimate, HUD SOCDS, Census.

8. +74% Source: HUD SOCDS, Census, Bureau of Labor & Statistics

9. Sources: ACS 2010 1-yr Estimate, HUD SOCDS, Census

10. Aug = - 22.4% Percent Change in Inventories of Existing Homes Month-Over-Year 2000 – 2012, MSA Source: Metropolitan Regional Information Systems (MRIS), GMU Center for Regional Analysis

11. Average Sales Price Percent Change Washington MSA All Housing Types % Annual Change Annual Change by Month 2009 2010 2011 2012 Source: Metropolitan Regional Information Systems (MRIS), GMU Center for Regional Analysis

12. Home Prices as a Percent of Peak September 2012 Selected Jurisdictions Peak Price% of Peak District of Columbia$600,00090% Montgomery County602,00077 Prince George’s County350,00054 Arlington County630,00088 City of Alexandria555,00086 Fairfax County575,00085 Loudoun County620,00070 Prince William County460,00070 Source: GMU Center for Regional Analysis, RBIntel

13. Renters Paying 30% or More of Their Income on Rent 2008-2010 Selected Jurisdictions % of Renters District of Columbia49% Montgomery County52 Prince George’s County51 Arlington County38 City of Alexandria41 Fairfax County45 Loudoun County47 Prince William County49 Source: GMU Center for Regional Analysis, US Census Bureau ACS 2008-2010 Estimates

14. Washington MSA Building Permits 2000 – 2012, 3-Month Mvg Avg Source: Census Bureau, GMU Center for Regional Analysis

15. Housing Market Outlook

16. Employment-Drive Housing Demand 2010-2020 Total Units Single- Family Multi- Family District of Columbia 70,4625,71564,747 Suburban Maryland 122,67849,67673,002 Northern Virginia 215,75596,374116,381 Washington Region407,944152,965254,979 Source: GMU Center for Regional Analysis Note: Assumes all workers are housed in the jurisdiction in which they work. The low estimates assume that new jobs have the same in-commuting rates as current jobs. Detailed study results available at cra.gmu.edu.

17. Comparing Prices of Current and Forecasted Units Owner-Occupied Units Washington Region Source: 2011 Sales, MRIS Note: assumes all workers housed in the jurisdiction in which they work

18. Comparing Rents of Current and Forecasted Units Renter-Occupied Units Washington Region Note: assumes all workers housed in the jurisdiction in which they work Source: 2009 ACS

19. Regional housing market has been recovering; sales activity and prices may soften in the near-term. Rents may not grow as fast and vacancy rates may increase in the near-term. Job growth over the next five years will put upward pressure on home prices, particularly in areas close to transportation/transit and employment centers. There is a need for more multi-family housing and smaller, more affordable owner and renter homes in the region. A lack of a sufficient supply of housing contributes to worsening traffic and quality of life and threatens our region’s economic vitality. Outlook for the Region’s Housing Market

20. GMU Center for Regional Analysis cra.gmu.edu