Presentation on theme: "Real Estate Trends and Outlook Lawrence Yun, Ph.D. Chief Economist NATIONAL ASSOCIATION OF REALTORS ® Presentation at Associated Taxpayers of Idaho Boise,"— Presentation transcript:
Real Estate Trends and Outlook Lawrence Yun, Ph.D. Chief Economist NATIONAL ASSOCIATION OF REALTORS ® Presentation at Associated Taxpayers of Idaho Boise, ID December 10, 2014
Sluggish Recovery in Housing Starts Cost of Construction Rising Faster than CPI Labor Shortage for construction work Construction loan difficulty for small local homebuilders … Dodd-Frank financial regulations?
Ada County Housing Statistics Home Sales down 1% year-to-date October 2013 up 14% 2012 up 1% 2011 up 9% Average Price up 10% 2013 up 17% 2012 up 13% 2011 down 9%
Monetary Policy Quantitative Easing … Finished Fed Funds Rate … hike in 2015 Q2 Earlier Move to Tighten because of Inflation Pressure Long-term Steady State Rate (2016 onwards).. 10 year Treasury at 5.0% Mortgage Rates reaching 6% by 2016
Erratic Credit Availability FICO New Method Mel Watt – New overseer of Fannie/Freddie Consumer Financial Protection Bureau’s – Lawsuits … Bleeding Big Banks – Other 2000-page shuffling of Dodd-Frank … Squeezing Small Banks Ridiculous FHA premiums … should decline Historic low mortgage default rates on recent vintages (2010-2014)
Multiyear Recovery Likely More Jobs Manageable Mortgage Rates Population Pent-Up Demand More Inventory Record High Household Wealth
Forecast over the next 2 years Increased occupancy and falling vacancy (new supply lacking) Rising rents … can offset rising rates to support property values Overall … improving business opportunities
Washington Policy Watch on Commercial Real Estate Facilitate Covered Bonds to help credit flow Raise cap on holding of commercial RE loans by credit unions Preserve Like-Kind Exchanges Preserve Terrorism Insurance Preserve capital gains status on carried interest Depreciation Rules should match economic life Oppose lease-accounting changes
Spin the Globe … Find the Source of Improving Standard of Living
When, How, What, Why? British Glorious Revolution of 1688 – William and Mary arrives to say … – Power not with King but with people via Parliament – No Taxation with Representation – Life, Liberty, and (Acquire) Property American Revolution of 1766 – Power resides not with King but with people – No Taxation with Representation – Life, Liberty, and the Pursuit of Happiness
Participants in Democracy to Protect Property Rights!