jan 13 forecast conference housing outlook

8/14/2019 Jan 13 Forecast Conference Housing Outlook

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Cardinal Bank and George Mason University17th Annual Economic Conference

January 13, 2009

Dr. Alan Merten, President, GMU

Steven Pearlstein, The Washington Post

John McClain, GMU

Dr. Stephen Fuller, GMU

Alex Orfinger, Washington Business Journal

The Washington Regions

Housing Market and Outlook

John McClain, AICPSenior Fellow and Deputy Director,

January 13, 2009

en er or eg ona na ys s, c oo o u c o cyGeorge Mason University


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Where is the Housing Market?

Inventory/Supply

Prices

Foreclosures

What is the Outlook?


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Inventory /Supply

Sales and Total Active ListingsWashington MSA, December Each Year

501000s

15

20

25

30

35

40

45

Listings

0

5

10


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Units Sold Percent ChangeBy Subregion

All Housing Types%

-

0

20

40

60

80

NVA

MSA

DC

SMD

2007 2008

-60

-40

-

Jan

Feb

Mar

Apr

May

JunJul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

JunJul

Aug

Sep

Oct

Nov

Dec

Source: MRIS, GMU Center for Regional Analysis

Total Active Listings Per SaleDecember Each Year

18

68

10121416

LDN

PW

FFX

ARL

DCMONT

02


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Total Existing Units SoldWashington Metro Area

120,000

40,000

60,000

80,000

100,000Avg. =86,800

57

0

20,000


New Housing Units SoldWashington Metro Area

10 000

15,000

20,000

25,000

,

Avg. =18,500

0

5,000

Source: Hanley-Wood, GMU Center for Regional Analysis * Annualized

6.4


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Building Permits

Washington MSA

20,000

30,000

40,000

,

Avg. =33,000

0

10,000

Source: US Census, GMU Center for Regional Analysis * Annualized

Housing Prices


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800

900

Housing Price Index TrendsU.S. and Washington Metro Area

Both Series Indexed to 1976 = 100

300

400

500

600

700

US

Washington

100

200

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

Source: Federal Housing Finance Agency (OFHEO) and GMU Center for Regional Analysis

ConformingLoans Only

25

30

Housing Price Index Annual ChangeU.S. and Washington Metro Area%

-5

0

5

10

15

20

US

Washington

-15

-10

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

Source: Federal Housing Finance Agency (OFHEO) and GMU Center for Regional Analysis

ConformingLoans Only


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Metro Comparisons

Percent Change in House Prices

2000 2007 (October)

128

130

L A

Miami%

52

64

79

86

90

90

106

Chicago

SF-Oakland

Seattle

N Y

San Diego

Phoenix

Single-FamilySame Unit Sales

2

18

27

47

48

0 50 100 150

Detroit

Dallas

Atlanta

Minneapo

Boston

Source: Case-Schiller, GMU Center for Regional Analysis

Metro Comparisons

Percent Change in House Prices2007 2008 (October)

-6

-3

Boston

Dallas

%

-20

-19

-16

-11

-11

-10

-8

Detroit

Minneapolis

Atlanta

Chicago

Seattle

N Y

WASHINGTON Single-FamilySame Unit Sales

-33

-31

-29

-28-27

-40 -30 -20 -10 0 10 20

Phoenix

SF-Oakland

Miami

L A

San Diego

Source: Case-Schiller, GMU Center for Regional Analysis


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Housing Price IndexWashington MSA

3rd Quarter Each Year300

1995Q1=100

100

150

200

250

ConformingMortgages Only

0

50

Source: Office of Federal Housing Enterprise Oversight, GMU Center for Regional Analysis

Housing Price IndexAnnual % Change

Washington MSA3rd Quarter Each Year

1995 Q1 = 100%

05

10152025

32-Yr = 6.4%

Conforming Mortgages Only

-15-10-5

1977

1980

1985

1990

1995

2000

2005

2008

Source: Office of Federal Housing Enterprise Oversight, GMU Center for Regional Analysis


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Average Sales Price

All Housing TypesWashington Metro458 900467,900468,700

500,000

$

197,500210,100228,400

260,800

295,900

375,700394,700

200,000

300,000

400,000

0

100,000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008


Average Sales PriceSingle-Family Detached

Washington Metro

567,000 580,500600,000

$

449,200

,

466,500

200 000

300,000

400,000

500,000

- .

0

100,000

,

2004 2005 2006 2007 2008



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Average Sales PriceSingle-Family Attached / Townhouse

Washington Metro600,000

$

323,200

396,800 407,900 409,300

320,900

300,000

400,000

500,000

-21.6%

0

100,000

,

2004 2005 2006 2007 2008


Average Sales PriceCondominiums

Washington Metro

600,000

$

263,200

324,200 325,200 338,000 310,800

200 000

300,000

400,000

500,000

-8.0 %

0

100,000

,

2004 2005 2006 2007 2008



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% of Sales at Price < $400,000NVAR (Arl., Alex., Fairfax)

100

%

64

48

33 3740

61

40

50

60

70

80

90

010

20

2003 2004 2005 2006 2007 2008


Area 2007 Price 2008 Price Change % Change

Dist. Of Columbia $537,400 $543,500 + $6,100 + 1.1 %

Arlington $559,000 $539,300 - $19,700 - 3.5 %

Annual Price Changes by Jurisdiction

Alexandria $502,900 $471,200 - $31,700 - 6.3 %

Montgomery $550,200 $503,900 - $46,300 - 8.4 %

Prince Georges $331,100 $290,200 - $40,900 - 12.4 %

Fairfax $542,000 $445,900 - $96,100 - 17.7 %

Loudoun $516,800 $389,000 - $127,800 - 24.7 %

Prince William $395,000 $257,900 - $137,100 - 34.7 %

MD SUBURBS $435,800 $400,400 - $35,400 - 8.1 %

VA SUBURBS $488,300 $373,200 - $115,100 - 23.6 %

METRO AREA $468,700 $394,700 - $74,000 - 15.8 %



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Miami

Phoenix

Metro Comparisons

Mortgage Foreclosure RatesQ3 - 2008

Foreclosures /10,000 Owner-Occupied Units

Dallas

Houston

U.S.

Chicago

Washington

Detroit

Atlanta

SF-Oakland

Los Angeles

San Diego

0 50 100 150 200 250 300 350 400

Boston

Minneapolis

N Y

Seattle

Philly

Source: RealtyTrac, GMU Center for Regional Analysis


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Foreclosure Rate by QuarterWashington Metro Area

160

Foreclosures/10,000 owner-occupied units

60

80

100

120

140

0

20

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2006 2007 2008

Source: RealtyTrac and GMU Center for Regional Analysis

Mortgage Foreclosure Rates

by County Jan 08 & Jan 09

Arlington

Montgomery

Foreclosures /10,000 units

PrinceGeorge's

METRO AREA

Alexandria

D.C.

Frederick

0 100 200 300 400 500 600 700 800

Pr William

Loudoun

Stafford

Fairfax

Source: RealtyTrac, GMU Center for Regional Analysis

Jan 2008 Jan 2009


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Alt-A Loan Numbers

Feb 2008 Richmond FedReserve Data


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Outlook


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SUPPLY / INVENTORY

Key Indicators to Watch

,permits low

PRICES

See continued stabilization in inner areas of the region,easing of declines in outer areas and continuedincreases in sales in those areas

FORECLOSURES

See an easing of foreclosure rates, price declines to stopand level off, head up in some areas

SUPPLY / INVENTORY

THE OUTLOOK

,some time to work through

PRICES

Market norms will return depending on geographicareaclose in areas now/soonBeltway areas mid-late2009outer jurisdictions into 2010

FORECLOSURES Subprime part of the problem ending soonAlt A and

Option Arm is looming and needs to beaddressedthere is time.


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jan 13 forecast conference housing outlook

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