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1. 11
MARKET OVERVIEW AND
2015 FORECAST
By: Skylar Olsen, PhD
Senior Economist
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2. 22
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3. 33
HOUSING MARKET
OVERVIEW
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4. 44
The housing market is still recovering……..
Peak to trough Peak to current Year-over-year
-22.5% -9.6% 6.0%
Zillow Home Value Index – U.S. Median Home Value
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5. 55
Although the recovery is slowing down to “normal”
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6. 66
Many metro areas are seeing high appreciation, but
at half the rates seen in 2013
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7. 77
Home values in Seattle still down 11% from peak
Peak to trough Peak to current Year-over-year
-31.7% -11.2% 6.3%
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8. 88
The slowdown phenomenon is present in Seattle
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9. 99
Eastside and South King County saw large gains
City Annual
home value
change
Seattle 6.1%
Tacoma 5.9%
Renton 7.6%
Bellevue 8.7%
Everett 5.6%
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10. 1010
HEADWINDS FOR
HOMEBUYERS
Three trends affecting the housing market
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11. 1111
1. For-sale inventory has increased nationwide, but
remains flat in the Seattle metro
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12. 1212
2. Nationally, new and existing home sales are low
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13. 1313
3. One in six homeowners is underwater
Negative equity remains widespread, 17% nationally
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14. 1414
Nationally, 35% of homeowners lack equity to sell
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15. 1515
Today, underwater homes are less common, but still
a problem
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16. 1616
Where are underwater homeowners in Seattle?
City
Negative
equity
Tacoma 29%
Spanaway 34%
Lakewood 26%
Auburn 24%
Everett 24%
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17. 1717
Most underwater homes are entry level homes, less
homes are available for first-time buyers
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18. 1818
AFFORDABILITY AND
FUTURE BUYERS
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19. 1919
Currently, interest rates are very low, but expected to
rise eventually
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20. 2020
How will rising rate affect affordability?
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21. 2121
Low rates = affordability on buyers’ side in Seattle
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22. 2222
High rents: a barrier to savings?
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23. 2323
Influx of rental demand
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24. 2424
Growth in rental households by structure type
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25. 2525
Coping strategy for expensive rents
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WHO ARE THE FUTURE
HOMEBUYERS?
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27. 2727
Young renters optimistic about future ownership
83 percent of millennial renters are “confident” or “somewhat
confident” that they will eventually buy a home.
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28. 2828
Millennials want to own homes……..
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29. 2929
But aren’t quite ready to start buying right now
Over the next year, millennials will emerge as the majority of new
homebuyers, surpassing Generation X.
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30. 3030
Millennials delayed
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31. 3131
Millennials with full-time employment are already
homeowners
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32. 3232
Labor market for millennials
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33. 3333
WHAT TO EXPECT IN 2015
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34. 3434
Home values forecasted rise, at slower rates in 2015
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35. 3535
One-year forecast for 2015 Seattle metro area
City
Annual
home value
change
Seattle 4.8%
Tacoma 4.7%
Renton 5.5%
Bellevue 6.0%
Everett 5.0%
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36. 3636
Bold Housing Predictions for 2015
• Homebuyers will have more negotiation power in 2015
– A less frothy housing market means a more balanced market. Slowing appreciation,
more inventory and the return of price cuts mean that buyers will have more choices and
won’t have to move as fast.
• Millennials will overtake Generation X as the largest group of
homebuyers
– Millennials have been delaying marriage and having children, but that doesn’t mean they
don’t have a desire to buy.
• Builders will begin constructing more, less expensive homes
– Builders will stop concentrating on the upper tier of the market and will begin to build
more entry level homes.
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37. 3737
Bold Housing Predictions for 2015
• Homebuyers will have more negotiation power in 2015
– A less frothy housing market means a more balanced market. Slowing appreciation,
more inventory and the return of price cuts mean that buyers will have more choices and
won’t have to move as fast.
• Millennials will overtake Generation X as the largest group of
homebuyers
– Millennials have been delaying marriage and having children, but that doesn’t mean they
don’t have a desire to buy.
• Builders will begin constructing more, less expensive homes
– Builders will stop concentrating on the upper tier of the market and will begin to build
more entry level homes.
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38. 3838
Find data for your local area on Zillow.com
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39. 3939
Thanks To For Providing This Presentation
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