Zillow Economic Update at NAREE
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The document summarizes three key points about the current housing market from the perspective of Zillow's Chief Economist: 1) While home purchases remain down, the rental market is strengthening as many former homeowners transition to renting. Household formation and multi-family housing starts are also increasing. 2) For non-distressed homes, prices have stabilized and are no longer expected to dip again. Home values have begun improving slowly over the past four months. 3) Government tax credits did not have a meaningful long-term impact on the housing market. Sales rose temporarily but then declined again, suggesting the underlying issues remained. The document concludes by noting several factors Zillow will continue monitoring
Zillow Economic Update at NAREE
- 1. Three Things Nobody's Telling You About The Housing Market National Association of Real Estate Editors June 2011 Stan Humphries, PhD Chief Economist stan@zillow.com 206.470.7127
- 2. #1: While the purchase market is still down, rentals are getting stronger 1.2 to 2.2 million homeowners transitioning from owners to renters 2 Source: Zillow, Census
- 3. #1: While the purchase market is still down, rentals are getting stronger Household formation was picking up again until recently. Outstripping new home completions by about 700K annualized. 3 Source: Zillow, Census
- 4. #1: While the purchase market is still down, rentals are getting stronger Slow but steady improvement in multi- family housing starts versus fits and starts for single-family 4 Source: Census
- 5. #2: For non-distressed, there¡¯s no double-dip 5 Source: Zillow, S&P
- 6. #2: For non-distressed, there¡¯s no double-dip Good news: Organic improvement in depreciation rates for four months now. Bad news: Current pace of improvement puts bottom in mid- 2013. 6 Source: Zillow
- 7. #3: There¡¯s no free lunch ¨C tax credits didn¡¯t really work Existing Home Sales (millions) 7 6 5 4 3 2 1 0 Jan Jun Aug Jan Jun Aug Jan Jun Aug Jan Nov Dec Nov Dec Nov Dec Mar Apr Mar Apr Mar Apr Mar Apr Jul Jul Jul Feb Sep Oct Feb Sep Oct Feb Sep Oct Feb May May May 2008 2009 2010 2011 7 Source: NAR
- 8. #3: There¡¯s no free lunch ¨C tax credits didn¡¯t really work Existing Home Sales (millions) 7 6 5 4 3 2 1 0 Jan Jun Aug Jan Jun Aug Jan Jun Aug Jan Nov Dec Nov Dec Nov Dec Mar Apr Mar Apr Mar Apr Mar Apr Jul Jul Jul Feb Sep Oct Feb Sep Oct Feb Sep Oct Feb May May May 2008 2009 2010 2011 8 Source: NAR
- 9. #3: There¡¯s no free lunch ¨C tax credits didn¡¯t really work Existing Home Sales (millions) 7 6 5 4 3 2 1 0 Jan Jun Aug Jan Jun Aug Jan Jun Aug Jan Nov Dec Nov Dec Nov Dec Mar Apr Mar Apr Mar Apr Mar Apr Jul Jul Jul Feb Sep Oct Feb Sep Oct Feb Sep Oct Feb May May May 2008 2009 2010 2011 9 Source: NAR
- 10. What we're watching in the market right now ? Conforming loan limits: We don't think they will have much of an effect, but we're watching closely. ? Foreclosure re-sales: We think they will peak in 2011. ? Household formation rate: We¡¯ll need these to really pick up again in order to work down excess inventory. 10