At the 2019 Market Outlook, Danielle Hale, Chief Economist at realtor.com, explores the latest trends, data and economic data in the local and national real estate markets.

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REALTOR.COM
MARKET OUTLOOK
Realtor.com Economics
January 2019

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AGENDA
Economic and housing data and insights from realtor.com®
• National Forecast – How well did we predict 2018? Looking forward to 2019
• U.S. Economic Trends – GDP, Jobs
• U.S. Housing Trends – Ownership Up, EHS Struggle
• Supply: Inventory, Prices, Affordability
• Demand: Aging Millennials, Rents
• How Shoppers React
• How realtor.com® data highlights U.S. trends & Local Data
• Cross Market Demand
• Generational Shopping
• Chicago Inventory, Sales & Hot Markets

3. NATIONAL
FORECAST

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2018 FORECAST
Key economic and housing metrics from realtor.com
Variable 2018
Forecast
Year to Date
Actual
Tracking So
Far?
Existing Home Sales 3.2% -2.9% Lower
Existing Home
Prices
2.5% 4.7% Higher
New Home Sales 7% 2.7% Lower
Housing Starts 3% 5% Higher
SF Housing Starts 7% 3% Lower
Mortgage Rates 4.6% 4.6% As Expected

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2018 INVENTORY PROJECTION
• …Based on this pattern, realtor.com® projects U.S. year-over-year
inventory growth to tick up into positive territory by fall 2018, for the
first time since 2015…
• https://www.realtor.com/research/2018-national-housing-forecast/

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2018 INVENTORY TRENDS
Month Inventory
Y/Y
June -4.3%
July -3.7%
August -1.9%
September -0.0%
October +1.6%
November +3.9%
December +5.3%

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2019 FORECAST
Key economic and housing metrics from NAR and realtor.com
National Association of REALTORS® Macro Forecast:
– Real GDP grows 1.9% in 2019 (vs. 3.1% in 2018, 2.2% in 2017)
– Nonfarm payroll employment grows 1.0% in 2019 (vs. 1.6% in
2018, 1.6% in 2017)
– Unemployment rises to 4.1% in 2019 (vs to 3.9% in 2018, 4.4% in
2017)
realtor.com® 2019 Housing Forecast:
– Existing home prices appreciate 2.2%
– Existing home sales down 2.0%
– Single family housing starts increase 8%
– 30-year fixed conforming rate averages 5.3%
– Homeownership rate increases to 64.6%

8. U.S. ECONOMIC
TRENDS

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ECONOMIC GROWTH IS STRONG
Consumption drives strong growth, Investment improves
Source: Bureau of Labor Statistics, Realtor.com® Analysis

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JOB CREATION GENERALLY SLOWING
220,000 monthly average in past 12 months, Dec saw 312,000
Source: Bureau of Labor Statistics

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CONSUMER CONFIDENCE
Plans to purchase a home dip in December
Source: The Conference Board, Moody’s Analytics

12. U.S. HOUSING
TRENDS

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2018 MOST COMPETITIVE SEASON ON RECORD
What are the hallmarks and drivers of the most competitive season?
• Supply: Not Keeping Pace
• Inventory - at record lows and continuing to decline
• Prices - at record highs and still increasing
• Affordability - least affordable since 2008/09, but more affordable than most of early 2000s
and 1990s
• Demand: More Buyers in the Market
• Aging Millennials want to own – ‘peak millennial’ coming to the housing market in 2020
• Rents - rising in 73% of counties
• Existing Home Sales Struggle to Break Out

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2019 MARKET SHIFTS
Supply comes back for some; affordability challenge reduces buyer competition
• Supply: Not Keeping Pace Coming back in some markets/price-levels
• Inventory - at record lows and continuing to decline (now up 5.3% in Dec)
• Prices - at record highs and still increasing (up 7.1% in Dec)
• Affordability - least affordable since 2008/09, but more affordable than most of early 2000s
and 1990s
• Demand: More Buyers in the Market
• Aging Millennials want to own – ‘peak millennial’ coming to the housing market in 2020
• Rents - rising in 73% of counties
• Existing Home Sales Struggle to Break Out

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OWNERSHIP RECOVERING
64.4% home ownership rate off low; 1.4 M households last 4 quarters
Source: Census Bureau

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FOUR KEY HOUSING TRENDS IN 2019
1. Modest inventory gains continue; high-end inventory growth
spreads
2. Soft home sales continue
3. Millennials purchase the most homes
4. Tax plan still a wild card for housing

17. SUPPLY SIDE

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MODEST INVENTORY
GAINS CONTINUE

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INVENTORY UP
Inventory Increased 5% Y/Y in December
Source: Realtor.com®

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HIGH-COST MARKETS LEAD INVENTORY GAINS

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PRICES CONTINUE TO RISE
Median List Price at $289,000, Up 7.1% Y/Y in December
Source: Realtor.com®

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LISTING PRICES UP 7.1% Y/Y IN DEC
Median list price increases are widespread
Source: Realtor.com®
December 2018

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INVENTORY DIVERGENCE
4.3 months supply for existing and 7.4 months for new
Source: National Association of REALTORS®, Commerce Department

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CRISIS SHIFTED NEW HOME MARKET
Average spread 2000-2008: 12%; 2009-2018: 33%
Source: National Association of REALTORS®, Commerce Department

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SOFT HOME SALES
CONTINUE

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NEW & EXISTING SALES DOWN
Sales down 5.1% for existing and 12.0% for new Y/Y in October
Source: National Association of REALTORS®, Commerce Department

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HOUSING STARTS DOWN
Down 3.6% Y/Y with SF down 13.1% and MF up 21.7% in November
Source: Commerce Department

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AFFORDABLE HOME SHORTAGE
290,000 fewer ‘starter’ homes (<$200k) now vs December 2015
Source: realtor.com®

29. DEMAND DRIVERS

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MILLENNIALS PURCHASE
THE MOST HOMES

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MILLENNIALS: 45% OF MORTGAGE BUYERS

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0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
0
3
6
9
12
15
18
21
24
27
30
33
36
39
42
45
48
51
54
57
60
63
66
69
72
75
78
81
84
87
90
93
96
99
Thousands
US Population by Age, End of 2016
32
DEMOGRAPHICS SET THE TABLE
When viewed by age, importance of Millennials becomes clearer
Source: Realtor.com® Analysis of US Census Bureau Population Estimates (2016)
Boomer
78 million
X
61 million
Millennial
88 million
Z
65 million
29 million

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HISTORIC AFFORDABILITY DECLINING
30-year conforming rate averaged 4.6% in past 12 months
Source: Moody’s Analytics, Freddie Mac, and National Association of REALTORS®

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MILLENNIAL OWNERSHIP VARIES
Strong correlation with affordable markets
Source: Realtor.com® Analysis of Nielsen Demographics PopFacts 2018

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CHEAPER TO BUY IN 39% OF COUNTIES
Simple monthly cost analysis favors renting now in more places
Source: Realtor.com® Analysis of HUD Median Rents,
Nielsen Pop-Facts Demographics and Realtor.com® Data
December 2018

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RENTS RISING Y/Y IN 73% OF COUNTIES
Rent increases adding to demand for buying
2018
Source: Realtor.com® Analysis of HUD Median Market Rents

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LIFE DRIVES HOUSING DEMAND
Everyone’s tired of waiting and Millennials are building families
0% 5% 10% 15% 20% 25% 30% 35%
change of job/job location
increase in income
desire to live closer to good schools
planning an increase to family size
relocated to a new city
increase in family size
looking for a safer neighhorhood
getting married/moving in with partner
change of family circumstance/composition
favorable home prices
tired of current home
Top 10 Buying Triggers
all 25-34
13%
Source: realtor.com Active Home Shopper Survey, September 2016

38. CURRENT
CONDITIONS &
LOCAL DATA

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CROSS MARKET DEMAND – INCOMING VIEWS
Chicago Draws Buyers From Rockford (Q4 2018)

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CROSS MARKET DEMAND – OUTGOING VIEWS
Chicago Buyers Looking Toward Rockford (Q4 2018)

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CROSS MARKET DEMAND – INCOMING VIEWS
Chicago Draws Buyers From Atlanta (Q4 2018)

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CROSS MARKET DEMAND – OUTGOING VIEWS
Chicago Buyers Looking Toward St. Louis, Indy, and Milwaukee (Q4 2018)

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MILLENNIALS LEADING SALES GROWTH
Sales with Millennial names increased by 5.3% in 2018

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WOMEN LEADING SALES GROWTH
Female names account for 7 of 10 fastest growing names on real estate deeds

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HISPANIC BUYERS GAINING INFLUENCE
Illinois among markets with largest concentration of Hispanic buyers

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CHICAGO DRAWS YOUNGER BUYERS
Age Group Interest Relative to National Average

47. HOME
OWNERSHIP

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HOME OWNERSHIP IN ILLINOIS
Overall Ownership Rate in Region is 65% vs 65% Nationally
Source: Nielsen Demographics Pop-Facts 2018

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HOME OWNERSHIP IN CHICAGO
Overall Ownership Rate in Region is 64% vs 65% Nationally
Source: Nielsen Demographics Pop-Facts 2018

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MILLENNIAL HOME OWNERSHIP IN ILLINOIS
Overall Ownership Rate in Region is 42% vs 41% Nationally
Source: Nielsen Demographics Pop-Facts 2018

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MILLENNIAL HOME OWNERSHIP IN CHICAGO
Overall Ownership Rate in Region is 40% vs 41% Nationally
Source: Nielsen Demographics Pop-Facts 2018

52. LISTING PRICES &
PRICE GROWTH

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LISTING PRICES IN CHICAGO AREA
DuPage County Has Highest Median List Price at $365,000 (Dec 2018)

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LISTING PRICES IN CHICAGO AREA
Cook County Growing Fastest at 4% (Dec 2018)

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LISTING PRICES IN CHICAGO AREA
Kenilworth (60043) is Most Expensive Zip Code (Dec 2018)

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LISTING PRICES IN CHICAGO
Fastest Growing Zip Codes in Chicago Area (Dec 2018)
Rank Zip Code Zip Name
Median List
Price
Median List
Price Y/Y
1 60043 Kenilworth, IL $1,590,050 22%
2 60093 Winnetka, IL $1,249,050 9%
3 60521 Hinsdale, IL $1,065,932 -3%
4 60022 Glencoe, IL $990,050 -1%
5 60045 Lake Forest, IL $927,050 -11%
6 60523 Oak Brook, IL $769,050 -12%
7 60614 Chicago, IL $735,050 -2%
8 60305 River Forest, IL $725,050 17%
9 60091 Wilmette, IL $697,550 -8%
10 60558 Western Springs, IL $679,950 -2%

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LISTING PRICE GROWTH IN CHICAGO AREA
56% of Zips Experienced Price Growth Y/Y (Dec 2018)

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LISTING PRICES IN CHICAGO
Fastest Growing Zip Codes in Chicago Area (Dec 2018)
Rank Zip Code Zip Name
Median List
Price
Median List
Price Y/Y
1 60644 Chicago, IL $159,050 47%
2 60623 Chicago, IL $139,950 41%
3 60406 Blue Island, IL $149,950 38%
4 60415 Chicago Ridge, IL $162,450 35%
5 60628 Chicago, IL $99,050 32%
6 60429 Hazel Crest, IL $126,545 30%
7 60042 Island Lake, IL $240,000 30%
8 60428 Markham, IL $95,000 28%
9 60419 Dolton, IL $95,050 28%
10 60637 Chicago, IL $174,550 25%

59. ACTIVE
INVENTORY

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ACTIVE INVENTORY TREND IN CHICAGO
Inventory on the Rise in Chicago (Dec 2018)
60

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ACTIVE INVENTORY Y/Y IN ILLINOIS
Single Family and Condo Active Listings (Dec 2018)
61

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ACTIVE INVENTORY Y/Y IN CHICAGO
Single Family and Condo Active Listings (Dec 2018)
62

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LISTING GROWTH IN CHICAGO
Fastest Growing Zip Codes in Chicago Area (Dec 2018)
Rank Zip Code Zip Name
Active
Listings
Active
Listings Y/Y
1 60455 Bridgeview, IL 57 50%
2 60096 Winthrop Harbor, IL 44 42%
3 60042 Island Lake, IL 52 41%
4 60461 Olympia Fields, IL 59 37%
5 60041 Ingleside, IL 63 34%
6 60482 Worth, IL 70 32%
7 60005 Arlington Heights, IL 183 32%
8 60176 Schiller Park, IL 43 30%
9 60432 Joliet, IL 48 30%
10 60555 Warrenville, IL 58 29%

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AGE OF INVENTORY IN CHICAGO
Age of inventory at county-level is 66-84 days (Dec 2018)
64

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AGE OF INVENTORY IN CHICAGO
Age of inventory breakdown by zip code (Dec 2018)
65
Rank Zip Code Zip Name
Median Age
(days)
Median Age
Y/Y
1 60804 Cicero, IL 47 -5%
2 60440 Bolingbrook, IL 48 -19%
3 60194 Schaumburg, IL 50 -15%
4 60803 Alsip, IL 51 -19%
5 60106 Bensenville, IL 51 -24%
6 60403 Crest Hill, IL 52 -21%
7 60446 Romeoville, IL 52 -13%
8 60402 Berwyn, IL 52 0%
9 60462 Orland Park, IL 53 -17%
10 60139 Glendale Heights, IL 53 -16%

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HOTTEST COUNTIES IN CHICAGO AREA
Will, IL Claims Top Performing County (Q4 2018)
Source: Realtor.com

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HOTTEST ZIP CODES IN CHICAGO AREA
Top 10 Performing Zip Codes (Q4 2018)
Source: Realtor.com

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HOUSEHOLD GROWTH 2018-2023
73% of Zips Seeing Growth
Source: Nielsen Demographics Pop-Facts 2018

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Economic Research
realtor.com®
Access market data, research, and presentations at
realtor.com/research
@RDC_Economics

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