Transcript Housing Forecast

Housing Forecast
- or –
“How Could This Happen To Us?”
Ken Danter
The Danter Company &
Binns Real Estate Services
Building Industry Association of Central Ohio
February 15, 2007
National Leaders in Real Estate Research
Outline
Opening Remarks
 Key Demographic Trends
 Employment Trends
 Housing Starts (Building Permits)
 New Home Closings
 Condominiums
 The Future

Thanks to Binns Real Estate Services for some of the data used in this presentation
Key Demographic Trends
Columbus MSA
Thanks to Binns Real Estate Services for some of the data used in this presentation
Population and Household Trends
Columbus MSA, 1990 - 2006
Thousands
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
Population
Households
200
0
1990
2000
2006
2011
Thanks to Binns Real Estate Services for some of the data used in this presentation
Columbus MSA Trends
Population
Households
1990
1,345,454
513,500
2000
1,540,157
610,757
194,703
97,257
14.5%
18.9%
1,707,963
677,333
167,806
66,576
10.9%
10.9%
1,862,944
741,140
154,981
63,807
9.1%
9.4%
Change 1990-2000
Percent Change 1990-2000
2006
Change 2000-2006
Percent Change 2000-2006
2011
Change 2006-2011
Percent Change 2006-2011
Thanks to Binns Real Estate Services for some of the data used in this presentation
Distribution of Households, Columbus
MSA, 2006
Southwest,
73,141
Northwest,
175,170
Southeast,
155,211
Northeast,
290,673
Thanks to Binns Real Estate Services for some of the data used in this presentation
Distribution of Household Growth
1990-2006
Southwest,
16,028
Northwest,
59,619
Southeast,
31,810
Northeast,
62,577
Thanks to Binns Real Estate Services for some of the data used in this presentation
Distribution of Households By Age Cohort
Columbus MSA, 2006
160,000
145,683 141,994
140,000
128,962
112,662
120,000
100,581
100,000
80,000
60,000
47,178
40,000
20,000
0
15 to 24 25 to 34 35 to 44 45 to 54 55 to 64
65+
Thanks to Binns Real Estate Services for some of the data used in this presentation
Change in Total Households by Age
Columbus MSA 1990-2006
70,000
65,141
60,000
50,000
40,000
36,401
28,018
30,000
24,497
20,000
10,000
7,070
1,459
0
15 to 24
25 to 34
35 to 44
45 to 54
55 to 64
65+
Thanks to Binns Real Estate Services for some of the data used in this presentation
Household Change by Age of Householder
Columbus MSA, 1990 to 2006
100.0%
90.0%
84.8%
80.0%
70.0%
56.7%
60.0%
50.0%
40.0%
27.8%
30.0%
20.0%
23.8%
17.6%
10.0%
1.1%
0.0%
15 to 24
25 to 34
35 to 44
45 to 54
55 to 64
65+
Thanks to Binns Real Estate Services for some of the data used in this presentation
Change in Householders Age 25 to 34
Selected Nearby MSAs, 1990 to 2006
5.0%
1.1%
0.0%
Columbus
Cleveland
Cincinnati
Indianapolis
-2.2%
-5.0%
-10.0%
-11.7%
-15.0%
-20.0%
-25.0%
-26.0%
-30.0%
Thanks to Binns Real Estate Services for some of the data used in this presentation
Projected Change in Households By Age Range
Columbus MSA, 2006 to 2011
30,000
25,394
25,000
20,000
16,375
14,543
15,000
10,000
5,000
3,707
1,859
2,199
25 to 34
35 to 44
0
15 to 24
45 to 54
55 to 64
65+
Thanks to Binns Real Estate Services for some of the data used in this presentation
Empty-Nester (Age 55+) Households By Income Range
Columbus MSA, 2000 and 2006
45,000
2000
2006
40,000
35,000
25,000
20,000
15,000
10,000
5,000
+
,0
00
$1
00
99
9
00
0
to
$9
9,
99
9
$7
5,
00
0
to
$7
4,
99
9
$5
0,
$3
5,
00
0
to
$4
9,
99
9
$3
4,
$2
5,
00
0
to
00
0
$1
5,
to
$2
4,
$1
5,
99
9
00
0
0
<
Households
30,000
Income Range
Thanks to Binns Real Estate Services for some of the data used in this presentation
Key Employment Trends
Columbus MSA
Thanks to Binns Real Estate Services for some of the data used in this presentation
1,400
1,200
1,000
800
600
400
200
0
19
69
19
72
19
75
19
78
19
81
19
84
19
87
19
90
19
93
19
96
19
99
20
02
20
05
Thousands
COLUMBUS MSA TOTAL EMPLOYMENT
1969 - 2006
Thanks to Binns Real Estate Services for some of the data used in this presentation
UNEMPLOYMENT RATE
COLUMBUS, OHIO MSA
1970 - 2005
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
1970
1973
1976
1979 1982
1985
1988 1991
1994
1997
2000
2003
2006
Thanks to Binns Real Estate Services for some of the data used in this presentation
DISTRIBUTION OF EMPLOYMENT BY
INDUSTRY
COLUMBUS, OHIO MSA
2000
35%
31.3%
30%
25%
19.4%
20%
15%
10.1%
5%
4.7%
4.6%
6.3%
1.8%
0.9%
Fed. Gov
Services
F.I.R.E.
Retail
Wholesale
Trans. &
P.U.
Manufact.
Const.
0%
Farm
5.9%
Local Gov.
5.2%
State Gov.
10.0%
10%
Thanks to Binns Real Estate Services for some of the data used in this presentation
DISTRIBUTION OF EMPLOYMENT BY INDUSTRY
COLUMBUS, OHIO
1970 - 2000
400,000
1970
1980
1990
2000
350,000
300,000
250,000
200,000
150,000
100,000
Government
Services
F.I.R.E.
Retail
Wholesale
Trans. & P.U.
Manufacturing
Construction
0
Ag. & Mining
50,000
Thanks to Binns Real Estate Services for some of the data used in this presentation
JOB CHANGE BY INDUSTRY 1990 - 2000
-15,000
10,000
.Const
.Manufact
.Trans. & P.U
Wholesale
35,000
60,000
85,000
110,000
135,000
15,087
2,542
15,404
11,988
47,922
Retail
.F.I.R.E
23,564
100,224
Services
Fed. Gov-3,257
.State Gov
.Local Gov
6,395
12,120
Thanks to Binns Real Estate Services for some of the data used in this presentation
PRIMARY VS. SECONDARY EMPLOYMENT COLUMBUS,
OHIO MSA
70.0%
62.3%
59.8%
60.0%
55.7%
50.0%
44.3%
40.2%
40.0%
37.7%
30.0%
20.0%
10.0%
0.0%
1980
1990
PRIMARY
2000
SECONDARY
Thanks to Binns Real Estate Services for some of the data used in this presentation
PRIMARY VS. SECONDARY EMPLOYMENT
RATE OF GROWTH
1980 -2000
45.0%
39.0%
40.0%
35.0%
32.0%
30.0%
25.0%
20.0%
18.5%
17.6%
15.0%
10.0%
5.0%
0.0%
1980-1990
Primary
1990-2000
Secondary
Thanks to Binns Real Estate Services for some of the data used in this presentation
Key Building Permit Trends
Columbus MSA
Thanks to Binns Real Estate Services for some of the data used in this presentation
HOUSING STARTS
TOTAL BUILDING PERMITS
COLUMBUS MSA - 1990-2006
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
1990 1992 1994 1996 1998 2000 2002 2004 2006
Thanks to Binns Real Estate Services for some of the data used in this presentation
COLUMBUS MSA HOUSING PERMITS BY TYPE
1990-2006
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
1990 1992 1994 1996 1998 2000 2002 2004 2006
SINGLE FAMILY
MULTI-FAMILY
Thanks to Binns Real Estate Services for some of the data used in this presentation
HOUSING DEMAND ANALYSIS
20,000
15,000
10,000
BUILDING
PERMITS
5,000
BUILDING
PERMITS
LESS
HOUSEHOLD
GROWTH
SURPLUS
0
2006
2004
2002
2000
1998
1996
1994
1992
1990
-5,000
Thanks to Binns Real Estate Services for some of the data used in this presentation
Key Single-Family Trends
Columbus MSA
Thanks to Binns Real Estate Services for some of the data used in this presentation
SINGLE FAMILY CLOSINGS
COLUMBUS, OHIO MSA
1997 - 2006
10,000
9,000
8,000
7,000
SUSTAINABLE
6,000
5,000
4,000
3,000
2,000
1,000
0
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Thanks to Binns Real Estate Services for some of the data used in this presentation
SINGLE FAMILY CLOSINGS UNDER $150,000
COLUMBUS, OHIO MSA
1997 - 2006
3,000
2,500
2,000
1,500
1,000
SUSTAINABLE
500
0
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Thanks to Binns Real Estate Services for some of the data used in this presentation
SINGLE FAMILY CLOSINGS $150,000 TO $199,999
COLUMBUS, OHIO MSA
1997 - 2006
3,000
2,500
SUSTAINABLE
2,000
1,500
1,000
500
0
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Thanks to Binns Real Estate Services for some of the data used in this presentation
SINGLE FAMILY CLOSINGS $200,000 - $299,999
COLUMBUS, OHIO MSA
1997 - 2006
3,500
3,000
2,500
SUSTAINABLE
2,000
1,500
1,000
500
0
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Thanks to Binns Real Estate Services for some of the data used in this presentation
SINGLE FAMILY CLOSINGS $300,000 - $399,999
COLUMBUS, OHIO MSA
1997 - 2006
1,400
1,200
1,000
800
SUSTAINABLE
600
400
200
0
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Thanks to Binns Real Estate Services for some of the data used in this presentation
SINGLE FAMILY CLOSINGS OVER $400,000
COLUMBUS, OHIO MSA
1997 - 2006
1,200
1,000
800
SUSTAINABLE
600
400
200
0
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Thanks to Binns Real Estate Services for some of the data used in this presentation
Sustainable Single-Family
Construction By Price Range
Price Range
<$150,000
Annual Sustainable
Construction
700
$150,000 to $199,999
2,000
$200,000 to $299,999
2,000
$300,000 to $399,999
700
$400,000 and over
600
Total
3,000
Thanks to Binns Real Estate Services for some of the data used in this presentation
SOLD LISTINGS
COLUMBUS BOARD OF REALTORS
1995 - 2006
30,000
25,000
20,000
15,000
10,000
5,000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Thanks to Binns Real Estate Services for some of the data used in this presentation
Columbus MSA Foreclosures
1995-2005
10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Source: Policy Matters Ohio
Thanks to Binns Real Estate Services for some of the data used in this presentation
PRIME RATE TRENDS - 1980 TO PRESENT
20.0%
18.0%
16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
0.0%
Thanks to Binns Real Estate Services for some of the data used in this presentation
Key Condominium Trends
Columbus MSA
Thanks to Binns Real Estate Services for some of the data used in this presentation
Columbus MSA Condominium Closings
3,500
2,896
3,000
2,712
2,500
2,319
2,056
2,034
2,000
1,500
1,000
500
0
2002
2003
2004
2005
2006
Thanks to Binns Real Estate Services for some of the data used in this presentation
2006 Condominium Closings By Segment
1,200
1,030
1,000
800
586
600
400
200
239
200
0
First-time buyers
Empty-nesters
Luxury
Other
Market Segment
Thanks to Binns Real Estate Services for some of the data used in this presentation
2006 Condominium Closings By Segment
Other, 239
Luxury, 200
First-time
buyers, 1,030
Emptynesters, 586
Thanks to Binns Real Estate Services for some of the data used in this presentation
Condominium Closings By Segment Trends
First-time buyers
1,600
1,400
1,489
1,286
1,342
1,242
1,200
1,030
1,000
800
600
400
200
0
2002
2003
2004
2005
2006
Thanks to Binns Real Estate Services for some of the data used in this presentation
Condominium Closings By Segment Trends
Empty-Nester
1,000
900
849
900
764
800
700
645
586
600
500
400
300
200
100
0
2002
2003
2004
2005
2006
Thanks to Binns Real Estate Services for some of the data used in this presentation
Condominium Closings By Segment Trends
Luxury
250
202
200
2005
2006
200
150
105
109
2003
2004
100
59
50
0
2002
Thanks to Binns Real Estate Services for some of the data used in this presentation
Condominium Closings By Segment Trends
Other
500
445
450
400
350
300
268
239
250
208
200
150
100
50
44
0
2002
2003
2004
2005
2006
Thanks to Binns Real Estate Services for some of the data used in this presentation
The Future
Thanks to Binns Real Estate Services for some of the data used in this presentation
Residential Inventories
Condominium
210
Total Remaining Condominium Including Unbuilt
3,996
Multifamily
3,900
Recently Constructed Units in Foreclosure
4,800
Single-Family Spec Homes
Single-Family Homes “Sold Forward”
Platted Lots
Developed Lots
970
7,725
19,590
5,330
Thanks to Binns Real Estate Services for some of the data used in this presentation
YEAR-END 2006 CONDOMINIUM INVENTORY
ZONED, PLATTED AND UNSOLD
1,600
1,394
1,400
1,200
1,026
1,000
971
800
538
600
400
200
67
0
Downtown
Northwest
Northeast
Southeast
Southwest
Thanks to Binns Real Estate Services for some of the data used in this presentation
Spec Home Inventory
Columbus MSA - 2006
Area
Northwest
Spec Home Inventory
165
Distribution
17.0%
Northeast
446
46.0%
Southeast
239
24.6%
Southwest
120
12.4%
Total
970
100.0%
Thanks to Binns Real Estate Services for some of the data used in this presentation
UNSOLD PLATTED LOT HOME INVENTORY
YEAR-END 2006
10,000
9,000
8,270
8,000
7,000
6,000
5,000
5,111
4,366
4,000
3,000
1,846
2,000
1,000
0
NORTHWEST
NORTHEAST
SOUTHEAST
SOUTHWEST
Thanks to Binns Real Estate Services for some of the data used in this presentation
HOUSING DEMAND ANALYSIS
20,000
15,000
10,000
BUILDING
PERMITS
5,000
BUILDING
PERMITS
LESS
HOUSEHOLD
GROWTH
SURPLUS
0
2006
2004
2002
2000
1998
1996
1994
1992
1990
-5,000
Thanks to Binns Real Estate Services for some of the data used in this presentation
Residential Surplus/Deficit Analysis
Columbus MSA 1997-2006
Ten Year Residential Construction Surplus
Ten Year Residential Construction Deficit
Net Surplus
Residential Support Summary
Single-family
6,000
Condominium
2,200
Rental
3,400
Total
11,600
IF – Residential construction remains at 2006 levels,
current surpluses will be absorbed within 2 years.
Thanks to Binns Real Estate Services for some of the data used in this presentation
17,044
(7,725)
9,319
SINGLE FAMILY BUILDING PERMITS
COLUMBUS, OHIO MSA
1988 - 2006
12,000
STARTS
STARTS MINUS DEMAND
10,000
8,000
6,000
4,000
2,000
05
06
20
20
04
20
02
03
20
20
01
20
00
20
99
19
98
19
96
97
19
19
95
19
94
19
92
93
19
19
91
19
89
90
19
19
19
88
-
(2,000)
Thanks to Binns Real Estate Services for some of the data used in this presentation
Single-Family Surplus/Deficit Analysis
Columbus MSA 1997-2006
Ten Year Single-Family Construction Surplus
Ten Year Single-Family Construction Deficit
Net Surplus
• “Surplus” Units Sold – Not Sitting in Inventory
• Buyer Response – low interest rates, new product lines and prices
• Borrowed From Future
• Average Tenure – 7 years for owner-occupied housing
• Payback – 7 years at an average of 1,100 units per year
• “Glory Years” – Started 2000 – Move-up impact begins 2007
• Actual Net Impact – about 800 units per year over 7 years
Thanks to Binns Real Estate Services for some of the data used in this presentation
11,850
(4,125)
7,725