economic & real estate market outlook...consumer sentiment remains high to mid-march (university...
TRANSCRIPT
Economic & Real Estate Market Outlook
By Lawrence Yun, Ph.D.Chief Economist, National Association of REALTORS®
Virtual Presentation at Wisconsin Residential Real Estate Summit
March 23, 2020
Annual GDP Growth Rate of 2.9% in 2018 but Slowing in 2019 and 2020
-3
-2
-1
0
1
2
3
4
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
???
Slower Global Economic Growth
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
U.S. Britain EU Germany Australia Canada
2018 2019
Economic Growth in Asia
0
1
2
3
4
5
6
7
8
China India Japan South Korea Thailand Taiwan Singapore
2018 2019
U.S. International Trade
0
500
1000
1500
2000
2500
3000
3500
2000
- Q
120
00 -
Q4
2001
- Q
320
02 -
Q2
2003
- Q
120
03 -
Q4
2004
- Q
320
05 -
Q2
2006
- Q
120
06 -
Q4
2007
- Q
320
08 -
Q2
2009
- Q
120
09 -
Q4
2010
- Q
320
11 -
Q2
2012
- Q
120
12 -
Q4
2013
- Q
320
14 -
Q2
2015
- Q
120
15 -
Q4
2016
- Q
320
17 -
Q2
2018
- Q
120
18 -
Q4
2019
- Q
3
ImportsExports
In $billion
Consumer Confidence Remains High to February
0
20
40
60
80
100
120
140
160
2000
- Ja
n20
00 -
Jul
2001
- Ja
n20
01 -
Jul
2002
- Ja
n20
02 -
Jul
2003
- Ja
n20
03 -
Jul
2004
- Ja
n20
04 -
Jul
2005
- Ja
n20
05 -
Jul
2006
- Ja
n20
06 -
Jul
2007
- Ja
n20
07 -
Jul
2008
- Ja
n20
08 -
Jul
2009
- Ja
n20
09 -
Jul
2010
- Ja
n20
10 -
Jul
2011
- Ja
n20
11 -
Jul
2012
- Ja
n20
12 -
Jul
2013
- Ja
n20
13 -
Jul
2014
- Ja
n20
14 -
Jul
2015
- Ja
n20
15 -
Jul
2016
- Ja
n20
16 -
Jul
2017
- Ja
n20
17 -
Jul
2018
- Ja
n20
18 -
Jul
2019
- Ja
n20
19 -
Jul
2020
- Ja
n
Consumer Sentiment Remains High to mid-March(University of Michigan)
0
20
40
60
80
100
120
2000
- Ja
n20
00 -
Jul
2001
- Ja
n20
01 -
Jul
2002
- Ja
n20
02 -
Jul
2003
- Ja
n20
03 -
Jul
2004
- Ja
n20
04 -
Jul
2005
- Ja
n20
05 -
Jul
2006
- Ja
n20
06 -
Jul
2007
- Ja
n20
07 -
Jul
2008
- Ja
n20
08 -
Jul
2009
- Ja
n20
09 -
Jul
2010
- Ja
n20
10 -
Jul
2011
- Ja
n20
11 -
Jul
2012
- Ja
n20
12 -
Jul
2013
- Ja
n20
13 -
Jul
2014
- Ja
n20
14 -
Jul
2015
- Ja
n20
15 -
Jul
2016
- Ja
n20
16 -
Jul
2017
- Ja
n20
17 -
Jul
2018
- Ja
n20
18 -
Jul
2019
- Ja
n20
19 -
Jul
2020
- Ja
n
Job Creations … for a long time(12 month net total in thousands)
-8000
-6000
-4000
-2000
0
2000
4000
2000- Jan
2001- Jan
2002- Jan
2003- Jan
2004- Jan
2005- Jan
2006- Jan
2007- Jan
2008- Jan
2009- Jan
2010- Jan
2011- Jan
2012- Jan
2013- Jan
2014- Jan
2015- Jan
2016- Jan
2017- Jan
2018- Jan
2019- Jan
2020- Jan
State Variations in Job Growth Rate(2019 Q3, BLS payroll employment)
Faster Wage Growth at the Bottom
2.00
2.50
3.00
3.50
4.00
4.50
5.00
Bottom Quartile 2nd Quartile 3rd Quartiel Top Quartile
One-year wage growth by Quartile
6% vs. 16%
80859095
100105110115120
2000
- Ja
n20
00 -
Jul
2001
- Ja
n20
01 -
Jul
2002
- Ja
n20
02 -
Jul
2003
- Ja
n20
03 -
Jul
2004
- Ja
n20
04 -
Jul
2005
- Ja
n20
05 -
Jul
2006
- Ja
n20
06 -
Jul
2007
- Ja
n20
07 -
Jul
2008
- Ja
n20
08 -
Jul
2009
- Ja
n20
09 -
Jul
2010
- Ja
n20
10 -
Jul
2011
- Ja
n20
11 -
Jul
2012
- Ja
n20
12 -
Jul
2013
- Ja
n20
13 -
Jul
2014
- Ja
n20
14 -
Jul
2015
- Ja
n20
15 -
Jul
2016
- Ja
n20
16 -
Jul
2017
- Ja
n20
17 -
Jul
2018
- Ja
n20
18 -
Jul
2019
- Ja
n20
19 -
Jul
Job Growth from 2000 to 2019Wisconsin National
Total Jobs in Milwaukee Metro
800
810
820
830
840
850
860
870
880
890
900
2000
- Ja
n20
00 -
Jul
2001
- Ja
n20
01 -
Jul
2002
- Ja
n20
02 -
Jul
2003
- Ja
n20
03 -
Jul
2004
- Ja
n20
04 -
Jul
2005
- Ja
n20
05 -
Jul
2006
- Ja
n20
06 -
Jul
2007
- Ja
n20
07 -
Jul
2008
- Ja
n20
08 -
Jul
2009
- Ja
n20
09 -
Jul
2010
- Ja
n20
10 -
Jul
2011
- Ja
n20
11 -
Jul
2012
- Ja
n20
12 -
Jul
2013
- Ja
n20
13 -
Jul
2014
- Ja
n20
14 -
Jul
2015
- Ja
n20
15 -
Jul
2016
- Ja
n20
16 -
Jul
2017
- Ja
n20
17 -
Jul
2018
- Ja
n20
18 -
Jul
2019
- Ja
n20
19 -
Jul
2020
- Ja
n
In thousands
Total Jobs in Madison Metro
300
320
340
360
380
400
420
440
2000
- Ja
n20
00 -
Jul
2001
- Ja
n20
01 -
Jul
2002
- Ja
n20
02 -
Jul
2003
- Ja
n20
03 -
Jul
2004
- Ja
n20
04 -
Jul
2005
- Ja
n20
05 -
Jul
2006
- Ja
n20
06 -
Jul
2007
- Ja
n20
07 -
Jul
2008
- Ja
n20
08 -
Jul
2009
- Ja
n20
09 -
Jul
2010
- Ja
n20
10 -
Jul
2011
- Ja
n20
11 -
Jul
2012
- Ja
n20
12 -
Jul
2013
- Ja
n20
13 -
Jul
2014
- Ja
n20
14 -
Jul
2015
- Ja
n20
15 -
Jul
2016
- Ja
n20
16 -
Jul
2017
- Ja
n20
17 -
Jul
2018
- Ja
n20
18 -
Jul
2019
- Ja
n20
19 -
Jul
2020
- Ja
n
In thousands
Average Weekly Earnings in Milwaukee and Madison
500
600
700
800
900
1000
1100
2007
- Ja
n20
07 -
Jun
2007
- N
ov20
08 -
Apr
2008
- Se
p20
09 -
Feb
2009
- Ju
l20
09 -
Dec
2010
- M
ay20
10 -
Oct
2011
- M
ar20
11 -
Aug
2012
- Ja
n20
12 -
Jun
2012
- N
ov20
13 -
Apr
2013
- Se
p20
14 -
Feb
2014
- Ju
l20
14 -
Dec
2015
- M
ay20
15 -
Oct
2016
- M
ar20
16 -
Aug
2017
- Ja
n20
17 -
Jun
2017
- N
ov20
18 -
Apr
2018
- Se
p20
19 -
Feb
2019
- Ju
l20
19 -
Dec
After-Tax Corporate Profits
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2000
- Q
120
00 -
Q3
2001
- Q
120
01 -
Q3
2002
- Q
120
02 -
Q3
2003
- Q
120
03 -
Q3
2004
- Q
120
04 -
Q3
2005
- Q
120
05 -
Q3
2006
- Q
120
06 -
Q3
2007
- Q
120
07 -
Q3
2008
- Q
120
08 -
Q3
2009
- Q
120
09 -
Q3
2010
- Q
120
10 -
Q3
2011
- Q
120
11 -
Q3
2012
- Q
120
12 -
Q3
2013
- Q
120
13 -
Q3
2014
- Q
120
14 -
Q3
2015
- Q
120
15 -
Q3
2016
- Q
120
16 -
Q3
2017
- Q
120
17 -
Q3
2018
- Q
120
18 -
Q3
2019
- Q
120
19 -
Q3
In $billion
Business Investment in U.S.(non-residential fixed investment)
-4
-2
0
2
4
6
8
10
12
14
2010
- Q
120
10 -
Q2
2010
- Q
320
10 -
Q4
2011
- Q
120
11 -
Q2
2011
- Q
320
11 -
Q4
2012
- Q
120
12 -
Q2
2012
- Q
320
12 -
Q4
2013
- Q
120
13 -
Q2
2013
- Q
320
13 -
Q4
2014
- Q
120
14 -
Q2
2014
- Q
320
14 -
Q4
2015
- Q
120
15 -
Q2
2015
- Q
320
15 -
Q4
2016
- Q
120
16 -
Q2
2016
- Q
320
16 -
Q4
2017
- Q
120
17 -
Q2
2017
- Q
320
17 -
Q4
2018
- Q
120
18 -
Q2
2018
- Q
320
18 -
Q4
2019
- Q
120
19 -
Q2
2019
- Q
320
19 -
Q4
% change from one year ago
Existing and New Home Sales Combined
40004500500055006000650070007500800085009000
2000
- Ja
n20
00 -
Aug
2001
- M
ar20
01 -
Oct
2002
- M
ay20
02 -
Dec
2003
- Ju
l20
04 -
Feb
2004
- Se
p20
05 -
Apr
2005
- N
ov20
06 -
Jun
2007
- Ja
n20
07 -
Aug
2008
- M
ar20
08 -
Oct
2009
- M
ay20
09 -
Dec
2010
- Ju
l20
11 -
Feb
2011
- Se
p20
12 -
Apr
2012
- N
ov20
13 -
Jun
2014
- Ja
n20
14 -
Aug
2015
- M
ar20
15 -
Oct
2016
- M
ay20
16 -
Dec
2017
- Ju
l20
18 -
Feb
2018
- Se
p20
19 -
Apr
2019
- N
ov
In thousand units
Recent National Existing Home Sales (Not Yet Breaking Higher)
4,400,000
4,600,000
4,800,000
5,000,000
5,200,000
5,400,000
5,600,000
5,800,00020
16 -
Jan
2016
- Fe
b20
16 -
Mar
2016
- Ap
r20
16 -
May
2016
- Ju
n20
16 -
Jul
2016
- Au
g20
16 -
Sep
2016
- O
ct20
16 -
Nov
2016
- De
c20
17 -
Jan
2017
- Fe
b20
17 -
Mar
2017
- Ap
r20
17 -
May
2017
- Ju
n20
17 -
Jul
2017
- Au
g20
17 -
Sep
2017
- O
ct20
17 -
Nov
2017
- De
c20
18 -
Jan
2018
- Fe
b20
18 -
Mar
2018
- Ap
r20
18 -
May
2018
- Ju
n20
18 -
Jul
2018
- Au
g20
18 -
Sep
2018
- O
ct20
18 -
Nov
2018
- De
c20
19 -
Jan
2019
- Fe
b20
19 -
Mar
2019
- Ap
r20
19 -
May
2019
- Ju
n20
19 -
Jul
2019
- Au
g20
19 -
Sep
2019
- O
ct20
19 -
Nov
2019
- De
c20
20 -
Jan
Inventory of Homes for Sale
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
450000020
00 -
Jan
2000
- Au
g20
01 -
Mar
2001
- O
ct20
02 -
May
2002
- De
c20
03 -
Jul
2004
- Fe
b20
04 -
Sep
2005
- Ap
r20
05 -
Nov
2006
- Ju
n20
07 -
Jan
2007
- Au
g20
08 -
Mar
2008
- O
ct20
09 -
May
2009
- De
c20
10 -
Jul
2011
- Fe
b20
11 -
Sep
2012
- Ap
r20
12 -
Nov
2013
- Ju
n20
14 -
Jan
2014
- Au
g20
15 -
Mar
2015
- O
ct20
16 -
May
2016
- De
c20
17 -
Jul
2018
- Fe
b20
18 -
Sep
2019
- Ap
r20
19 -
Nov
Federal Reserve Monetary PolicyAll-Accomodative
0
1
2
3
4
5
6
7
2000
- Ja
n20
00 -
Jul
2001
- Ja
n20
01 -
Jul
2002
- Ja
n20
02 -
Jul
2003
- Ja
n20
03 -
Jul
2004
- Ja
n20
04 -
Jul
2005
- Ja
n20
05 -
Jul
2006
- Ja
n20
06 -
Jul
2007
- Ja
n20
07 -
Jul
2008
- Ja
n20
08 -
Jul
2009
- Ja
n20
09 -
Jul
2010
- Ja
n20
10 -
Jul
2011
- Ja
n20
11 -
Jul
2012
- Ja
n20
12 -
Jul
2013
- Ja
n20
13 -
Jul
2014
- Ja
n20
14 -
Jul
2015
- Ja
n20
15 -
Jul
2016
- Ja
n20
16 -
Jul
2017
- Ja
n20
17 -
Jul
2018
- Ja
n20
18 -
Jul
2019
- Ja
n20
19 -
Jun
2019
- De
c
Fed Funds Rate
Fed Funds Rate and 30-year Mortgage Rate
1.01.52.02.53.03.54.04.55.05.5
2018 -Jan
2018 -Mar
2018 -May
2018 -Jul
2018 -Sep
2018 -Nov
2019 -Jan
2019 -Mar
2019 -May
2019 -Jun
2019 -Aug
2019 -Oct
2019 -Dec
2020 -Feb
Mortgage Rates tied to 10-year Treasury
0.01.02.03.04.05.06.07.08.09.0
2000
- Ja
n20
00 -
Jul
2001
- Ja
n20
01 -
Jul
2002
- Ja
n20
02 -
Jul
2003
- Ja
n20
03 -
Jul
2004
- Ja
n20
04 -
Jul
2005
- Ja
n20
05 -
Jul
2006
- Ja
n20
06 -
Jul
2007
- Ja
n20
07 -
Jul
2008
- Ja
n20
08 -
Jul
2009
- Ja
n20
09 -
Jul
2010
- Ja
n20
10 -
Jul
2011
- Ja
n20
11 -
Jul
2012
- Ja
n20
12 -
Jul
2013
- Ja
n20
13 -
Jul
2014
- Ja
n20
14 -
Jul
2015
- Ja
n20
15 -
Jul
2016
- Ja
n20
16 -
Jul
2017
- Ja
n20
17 -
Jul
2018
- Ja
n20
18 -
Jul
2019
- Ja
n20
19 -
Jul
2020
- Ja
n
REALTORS® Buyer Traffic Index
Homeownership Rate Slow Recovery70% to 63% to 65%
6061626364656667686970
Homeowners
30000
40000
50000
60000
70000
80000
9000019
70 -
Q1
1971
- Q
319
73 -
Q1
1974
- Q
319
76 -
Q1
1977
- Q
319
79 -
Q1
1980
- Q
319
82 -
Q1
1983
- Q
319
85 -
Q1
1986
- Q
319
88 -
Q1
1989
- Q
319
91 -
Q1
1992
- Q
319
94 -
Q1
1995
- Q
319
97 -
Q1
1998
- Q
320
00 -
Q1
2001
- Q
320
03 -
Q1
2004
- Q
320
06 -
Q1
2007
- Q
320
09 -
Q1
2010
- Q
320
12 -
Q1
2013
- Q
320
15 -
Q1
2016
- Q
320
18 -
Q1
2019
- Q
3
In thousands
Home Price Index – Madison TopsMadison, Milwaukee, Green Bay, Appleton
100.0
120.0
140.0
160.0
180.0
200.0
220.0
240.0
1995
- Q
119
95 -
Q4
1996
- Q
319
97 -
Q2
1998
- Q
119
98 -
Q4
1999
- Q
320
00 -
Q2
2001
- Q
120
01 -
Q4
2002
- Q
320
03 -
Q2
2004
- Q
120
04 -
Q4
2005
- Q
320
06 -
Q2
2007
- Q
120
07 -
Q4
2008
- Q
320
09 -
Q2
2010
- Q
120
10 -
Q4
2011
- Q
320
12 -
Q2
2013
- Q
120
13 -
Q4
2014
- Q
320
15 -
Q2
2016
- Q
120
16 -
Q4
2017
- Q
320
18 -
Q2
2019
- Q
120
19 -
Q4
Rising Home Price means Rising Real Estate Wealth (Total Asset – Outstanding Mortgage)
0
5000
10000
15000
20000
25000
30000
3500020
00 -
Q1
2000
- Q
320
01 -
Q1
2001
- Q
320
02 -
Q1
2002
- Q
320
03 -
Q1
2003
- Q
320
04 -
Q1
2004
- Q
320
05 -
Q1
2005
- Q
320
06 -
Q1
2006
- Q
320
07 -
Q1
2007
- Q
320
08 -
Q1
2008
- Q
320
09 -
Q1
2009
- Q
320
10 -
Q1
2010
- Q
320
11 -
Q1
2011
- Q
320
12 -
Q1
2012
- Q
320
13 -
Q1
2013
- Q
320
14 -
Q1
2014
- Q
320
15 -
Q1
2015
- Q
320
16 -
Q1
2016
- Q
320
17 -
Q1
2017
- Q
320
18 -
Q1
2018
- Q
320
19 -
Q1
In $billion
Wealth: From 2000 to 2016 to 2018
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
Renters Homeowners
Housing Starts Back to Normal?Above 1.5 million for 3 straight months
0
500
1000
1500
2000
2500
2000- Jan
2001- Jan
2002- Jan
2003- Jan
2004- Jan
2005- Jan
2006- Jan
2007- Jan
2008- Jan
2009- Jan
2010- Jan
2011- Jan
2012- Jan
2013- Jan
2014- Jan
2015- Jan
2016- Jan
2017- Jan
2018- Jan
2019- Jan
2020- Jan
2000 versus 2019 comparison2000 2019 Comment
Housing Affordability 122 146 Better
30-year mortgage rate 8.1% 4.0% Better
Population 282 million 329 million Better
Population (16 yrs old and over)
218 million 263 million Better
Households 103 million 122 million Better
Jobs 132 million 152 million Better
Total Home Sales (New + Existing)
6.1 million 5.9 million Worse
Prior Economic Forecast: No Recession If No Major Trade War
2016 2017 2018 2019 Forecast
2020Forecast
GDP Growth 1.5% 2.2% 2.9% 2.0% 1.6%
Job Growth +2.5 million +2.2 million +2.4 million
+2.2million
+1.5million
CPI Inflation 1.3% 2.1% 2.4% 2.0% 1.7%
Housing Forecast: Moderate Growth
2016 2017 2018 2019Forecast
2020Forecast
New Home Sales 560,000 613,000 617,000 670,000(+9%)
750,000(+11%)
Existing Home Sales
5.4 million 5.5 million 5.3 million 5.4 million(1%)
5.6 million(+4%)
Median Price Growth
+5.1% +5.7% +4.9% +4.3% +3.6%
30-year Rate 3.6% 4.0% 4.5% 4.0% 3.8%
Coronavirus Impact
Realtors® Survey
Federal Deficit (one-year measure of overspending)
-2500000
-2000000
-1500000
-1000000
-500000
0
500000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
$ million
Oil Price (West Texas Intermediate)
0
20
40
60
80
100
120
140
160
2000
- Ja
n20
00 -
Aug
2001
- M
ar20
01 -
Oct
2002
- M
ay20
02 -
Dec
2003
- Ju
l20
04 -
Feb
2004
- Se
p20
05 -
Apr
2005
- N
ov20
06 -
Jun
2007
- Ja
n20
07 -
Aug
2008
- M
ar20
08 -
Oct
2009
- M
ay20
09 -
Dec
2010
- Ju
l20
11 -
Feb
2011
- Se
p20
12 -
Apr
2012
- N
ov20
13 -
Jun
2014
- Ja
n20
14 -
Aug
2015
- M
ar20
15 -
Oct
2016
- M
ay20
16 -
Dec
2017
- Ju
l20
18 -
Feb
2018
- Se
p20
19 -
Apr
2019
- N
ov
36
ISM Manufacturing Index
40
45
50
55
60
65
2000- Jan
2001- Jan
2002- Jan
2003- Jan
2004- Jan
2005- Jan
2006- Jan
2007- Jan
2008- Jan
2009- Jan
2010- Jan
2011- Jan
2012- Jan
2013- Jan
2014- Jan
2015- Jan
2016- Jan
2017- Jan
2018- Jan
2019- Jan
2020- Jan
Economic Forecast: Highly UncertainMaybe Recession … Maybe Not
2019 2020Forecast
GDP Growth 2.3% -1% to 1%
Job Gains 2.2 million Net Zero?
Home Prices 4.8% 2% to 4%
Thank You !