Transcript Sales Training

The Washington DC Housing Market:
Trends and Outlook
Housing Association of Non-Profit Developers
December 11, 2014
Lisa A. Sturtevant, PhD
Vice President of Research, NHC
CURRENT HOUSING MARKET:
5 CHARACTERISTICS OF THE REGION’S
RECOVERY
Key Characteristics – Washington
DC Housing Market
•
•
•
•
Slower Job Growth
Rising Prices and Rents
Expanding For-Sale Inventory
Convergence of Market Activity Across the
Region
• Increase in New Construction
1. Job Growth Has Slowed
(000s)
Annual Job Change – MOTY
Washington MSA
150
100
50
0
-50
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
-100
Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
Other Regions Gaining Jobs Faster
(000s)
Job Change Oct 2013 – Oct 2014
15 Largest Job Markets
140
Washington +17,600
120
100
80
60
40
20
0
Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
Growth Uneven Across the Economy
Job Change by Sector Oct 2013 – Oct 2014
Washington MSA
Total = 17,600
(000s)
Prof. & Bus. Svcs
Federal Govt.
Educ & Health Svcs
State & Local Govt
Retail Trade
Leisure & Hosp.
Construction
Other Services
Financial
Information
Manufacturing
Wlse Trade
Transp. & Util.
-20.0
2
-5
0
8
1
6
5
1
4
-3
-2
1
1
-10.0
0.0
10.0
20.0
Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
30.0
2. Price Increases Have Slowed
Average Sales Price Percent Change
Washington MSA
All Housing Types
Annual Change
%
Annual Change by Month
2010
2011
2012
2013
2014
25
20
15
10
0
-5
2000
2002
2004
2006
2008
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
5
-10
-15
-20
Source: Metropolitan Regional Information Systems (MRIS), GMU Center for Regional Analysis
Average Sales Price Percent Change
Washington MSA
Single-Family Detached
Annual Change
%
2010
Annual Change by Month
2011
2012
2013
2014
25
20
15
10
0
-5
2005
2007
2009
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
5
-10
-15
-20
Source: Metropolitan Regional Information Systems (MRIS), GMU Center for Regional Analysis
Average Sales Price Percent Change
Washington MSA
Single-Family Attached
Annual Change
30
25
20
15
10
5
0
-5
-10
-15
-20
-25
2010
2011
2012
2013
2014
2005
2007
2009
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
%
Annual Change by Month
Source: Metropolitan Regional Information Systems (MRIS), GMU Center for Regional Analysis
Average Sales Price Percent Change
Washington MSA
Condominiums
Annual Change
%
2010
Annual Change by Month
2011
2012
2013
2014
25
20
15
10
0
-5
2005
2007
2009
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
5
-10
-15
Source: Metropolitan Regional Information Systems (MRIS), GMU Center for Regional Analysis
But Rents Continue to Rise
Median Rent
Washington MSA
$1,600
$1,481
$1,400
$1,200
$1,000
$800
$744
$600
$400
$200
$0
2000
2006 2007 2008 2009 2010 2011 2012 2013
Source: U.S. Census Bureau, 2000 Census SF3; American Community Survey 1-year estimates
3. Inventories Have Been Growing
Percent Change in Inventories of Existing Homes
Month-Over-Year
Washington MSA
%
140
120
100
80
60
40
20
0
-20
-40
-60
Source: Metropolitan Regional Information Systems (MRIS), GMU Center for Regional Analysis. Total
monthly inventory includes listings active at the end of the month plus sales during the month.
Oct =
+21.7%
25
Total Listings Per Sale
Oct Each Year
20
Arl
DC
Ffx
Ldn
PG
Mont
PW
15
10
5
0
Source: Metropolitan Regional Information Systems (MRIS), GMU Center for Regional Analysis
Rental Vacancy Rates Have Edged Up
Rental Vacancy Rate
Washington MSA
8%
7%
6%
5%
4.9%
5.1%
2012
2013
4%
3%
2%
1%
0%
2006
2007
2008
2009
2010
2011
Source: U.S. Census Bureau, SF3; American Community Survey 1-year estimates
4. Recovery Has Become Widespread
Median Sales Price by Jurisdiction
Washington MSA
Average Sales Price Percent Change
District of Columbia
Annual Change
Annual Change by Month
2010
%
2011
2012
2013
2014
25
20
15
10
0
-5
2000
2002
2004
2006
2008
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
5
-10
-15
Source: Metropolitan Regional Information Systems (MRIS), GMU Center for Regional Analysis
Average Sales Price Percent Change
Suburban Maryland
Annual Change
Annual Change by Month
2010
%
2011
2012
2013
2014
25
20
15
10
0
-5
2000
2002
2004
2006
2008
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
5
-10
-15
-20
Source: Metropolitan Regional Information Systems (MRIS), GMU Center for Regional Analysis
Average Sales Price Percent Change
Northern Virginia
Annual Change
Annual Change by Month
2010
%
2011
2012
2013
2014
30
20
0
2000
2002
2004
2006
2008
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
10
-10
-20
-30
Source: Metropolitan Regional Information Systems (MRIS), GMU Center for Regional Analysis
5. Construction Activity Up Steadily
Building Permits
Washington MSA
2001 – 2014, 3-Month Mvg Avg
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
Source: Census Bureau, GMU Center for Regional Analysis
Building Permits by Type
Washington MSA
45,000
60%
40,000
35,000
Units
30,000
40%
25,000
30%
20,000
15,000
20%
10,000
Percent Multi-Family
50%
10%
5,000
0
0%
Source: Census Bureau
OUTLOOK FOR THE REGION’S
HOUSING MARKET:
5 ECONOMIC & DEMOGRAPHIC TRENDS
Key Trends – Outlook for the
Washington DC Housing Market
•
•
•
•
•
Economic Restructuring
Rising Affordability Challenges
Aging of the Population
Demand from Millennials
Growth of Minority Population
1. Changing Structure of the Economy
 Slower growth in Federal Government and
Professional & Business Service jobs
 Faster growth in Leisure & Hospitality, Retail
and Construction jobs
Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
Change in Federal Government Jobs
Washington MSA
Annual Month over Year
2010
2011
2012
2013
2014
Sep
Jun
Mar
Dec
Sep
Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
Jun
Mar
Dec
Sep
Jun
Mar
Dec
Sep
Jun
Mar
Dec
Sep
Jun
Mar
Dec
Sep
Jun
Mar
2008
2005
2002
(000s) Annual Data
30
2009
25
20
15
10
5
0
-5
-10
-15
-20
Change in Professional & Business Services Jobs
Washington MSA
Annual Month over Year
2010
2011
2012
2013
2014
Sep
Jun
Mar
Dec
Sep
Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
Jun
Mar
Dec
Sep
Jun
Mar
Dec
Sep
Jun
Mar
Dec
Sep
Jun
Mar
Dec
Sep
Jun
Mar
2008
2005
2002
(000s) Annual Data
30
2009
25
20
15
10
5
0
-5
-10
-15
-20
Washington Metropolitan Area Job Change
by Wage Category between 2008 to 2013
2008-2009
2010-2013
Higher-Wage
Mid-Wage
Lower Wage
(000s) -60
-40
-20
0
20
40
Sources: EMSI 2013.3 & GMU Center for Regional Analysis
60
80
Principal Sources of Job
Growth in the Washington Area, 2012-2032
(000s)
Prof. & Sci. Svcs/Mgt
Admin & Waste Svcs
Construction
Health Services
Leisure/Hospitality
Sub-Total
Overall Total
Job
Change
401.8
% of Total
Job Change
46.9%
Median
Wage*
$81,500
139.0
95.0
71.2
16.2
11.1
8.3
29,500
36,700
39,500
45.9
753.1
857.3
5.4
87.8%
100.0
18,300
* in 2011$s
Source: 2009-2011 ACS, IHS Global Insight, MWCOG, BLS, GMU Center for Regional Analysis.
$48,900
2. Housing Affordability is a Challenge
Housing Opportunity Index
Washington MSA
300
250
200
150
100
0
1991
1991
1992
1993
1994
1994
1995
1996
1997
1997
1998
1999
2000
2000
2001
2002
2003
2003
2004
2005
2006
2006
2007
2008
2009
2009
2010
2011
2012
2012
2013
2014
50
Source: Core Logic, HUD & Federal Housing Finance Agency
Thousands of Households Cost Burdened
Households Spending More than Half of
Their Income on Housing
% of Households Severely Cost Burdened
25%
190,000 working
households
20%
15%
10%
5%
0%
2009
2012
Source: NHC Center for Housing Policy, Housing Landscape 2014
Cost Burden Varies Around the Region
Renters Spending Half or More of
Their Income on Housing, 2012
30%
26%
25%
25%
20%
19%
20%
Arlington
Alexandria
18%
15%
10%
5%
0%
District of
Columbia
Fairfax
Montgomery
Source: U.S. Census Bureau, American Community Survey 1-Year file
Many Workers Can’t Afford to Buy a
Typical Home
Source: NHC Center for Housing Policy, Paycheck to Paycheck
Or to Rent a Typical Apartment
Source: NHC Center for Housing Policy, Housing Landscape 2014
Foreclosure is a Growing Issue
3. More Seniors in the Population
Percent of Population Age 65+
20%
DC
Maryland
Virginia
15%
10%
5%
0%
2000
2010
2020
2030
Source: Census Bureau, Population Projections
Many Households Have Lost Wealth
Total Decline in Median Wealth by Age of Household
Head, US, 2010-2010
Younger than 35
- $5,270
- $56,029
35-44
45-54
- $49,793
- $51,040
55-64
$0
$10,000 $20,000 $30,000 $40,000 $50,000 $60,000
Source: Pew Research Center, tabulations of Survey of Consumer Finances data
4. Millennials Drove Growth – In Some
Places
Percent Population Change, 2000-2012
40%
Total
25-34 year olds
30%
20%
10%
0%
Source: U.S. Census Bureau, 2000 Census SF3 and American Community Survey 1-year file
Millennials Less Likely to be
Homeowners
Homeownership Rate, 2012
80%
70%
60%
50%
40%
30%
20%
10%
0%
DC
Arlington
Alexandria
25-to-34 year olds
Fairfax
Montgomery
All Households2
Source: Census Bureau, American Community Survey 1-Year file
Many Have Been Sidelined
Share of Sales to First-Time
Homebuyers - US
Source: National Association of Realtors®
5. Younger Population More
Racially Diverse
Age Group by Race, 2013
Washington MSA
35%
30%
25%
Under 18
18-24
25-34
20%
15%
10%
5%
0%
White
Black
Asian
Hispanic
Source: U.S. Census Bureau, American Community Survey 1-Year File
Faster Growth of Minority Population
in the Suburbs
60%
Percent Population Change, 2000 - 2012
50%
40%
30%
20%
White
Non-White
10%
0%
-10%
-20%
Source: Census Bureau, American Community Survey 1-Year File
Minority Households Tend to Have
Lower Incomes
Median Household Income, 2013
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$0
White
Black
Asian
Hispanic
Source: Census Bureau, American Community Survey 1-Year file
Key Takeaways from the Demographic
and Economic Trends
• Demographic and economic trends point to
growing needs for affordable housing


Smaller homes, multi-family housing, rental housing
Close to jobs, transit, amenities
• Different parts of the population competing for
the same types of housing

Millennials, seniors, families
• Needs vary around the region


Local responses to affordable housing needs
Needs vary considerably even within jurisdictions
Contact
Lisa Sturtevant
Center for Housing Policy and
National Housing Conference
[email protected]
202-466-2121 x234
www.nhc.org
www.housingpolicy.org
www.foreclosure-response.org