1. The American Dream and
the 2013 Housing Outlook
Wednesday, December 12, 2012
@jedkolko | #truliapredicts
2. Agenda
Looking Back at 2012
What Will Consumers Do In 2013?
2013: What’s In, What’s Out
5 predictions about housing
Top 10 markets to watch
@jedkolko | #truliapredicts
3. 2012: Better Than Anyone Dared Hope
Against all odds
“Even the best possible 2012 won’t get us halfway back toward normal.”
Housing market: 47% back to normal
2012 by the numbers
Asking Home Construction Existing Home Delinquencies
Prices Starts Sales + Foreclosures
+3.8% +42% +11% -10%
+1.2% in Despite -23%
Judicial States Inventory
+4.9 in Non-
• . Judicial States
@jedkolko | #truliapredicts
4. Consumers Bullish About Buying Homes
% Renters Planning to Buy in Next 2 Years
January 2011 22%
May 2012 28%
November 2012 31%
0% 10% 20% 30% 40%
@jedkolko | #truliapredicts
5. Millennials Shaken, Not Scarred
Is homeownership part of your
personal American Dream?
72% of 18-34 year-olds
72% of all adults
“Renter nation” just a myth
43% of Millennials are homeowners
93% of Millennial renters want to buy someday
@jedkolko | #truliapredicts
6. Young Adults In For Sticker Shock
Home Prices Mortgage Rates
% expecting increase in next year
60% 55%
49% 49%
50%
43%
41%
40% 37% 38%
32%
30%
20%
10%
0%
18-34 35-44 45-54 55+
Age
@jedkolko | #truliapredicts
7. Rising Prices Will Unlock Inventory
Who Might Sell in 2013 Tight inventory holding
back sales
2010 to 2012 33%
Year of Home Purchase
Rising prices create
2007 to 2009 20% inventory via:
More construction
Homeowners wanting to
2003 to 2006 23% sell
2002 or earlier 20% More likely to sell if:
Can make profit
0% 20% 40% Expect price increases
Bought recently
@jedkolko | #truliapredicts
8. 2013: What’s Out, What’s In
2012
2013
Will home prices bottom? Will inventory bottom?
The robo-signing New mortgage rules
settlement
Improving housing Declining housing
affordability affordability
Expanding refinancing to Cutting the mortgage
stimulate the economy interest deduction
to fix the budget
National housing policy “Localized” housing policy
@jedkolko | #truliapredicts
9. What Makes A Housing Market Healthy?
Strong fundamentals
Job growth
Low vacancy rate – but not too low!
Little foreclosure inventory
Not necessarily rising prices
Big price gains are bounce-backs – “yo-yo dieters”
Phoenix: high vacancies
Detroit: weak job growth
Miami: huge foreclosure inventory
@jedkolko | #truliapredicts
10. Top 10 Healthiest Housing Markets Going into 2013
NOTE: Among 100 largest metros
@jedkolko | #truliapredicts
11. Wrap Up
2012 for housing was better than anyone dared to hope
Consumers are bullish on buying homes
Millennials are shaken, not scarred, by the housing bust
“Renter Nation” is just a myth
Rising prices should unlock inventory in 2013
What’s in for 2013: new mortgage rules, declining
affordability, “localized” housing policy, and more
The healthiest local housing markets are metros with
strong fundamentals, not necessarily biggest price gains
@jedkolko | #truliapredicts