U.S. REITs have rebounded strongly Dow Jones Equity REIT Total Return Index Index, 2005 = 100 250 200 150 100 50 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Sources: Bloomberg, Dow Jones.
Affordability for first-time buyers dropped off last year First time homebuyer affordability index 140 130 120 110 100 90 80 70 60 2006 2007 2008 2009 2010 2011 2012 2013 Note: Higher index value indicates more first time buyers can afford to buy a home. Source: Bloomberg.
Affordability still higher than during bubble despite last year s fall Composite homebuyers affordability index 220 200 180 160 140 120 100 2000 2002 2004 2006 2008 2010 2012 2014 Note: Higher index value indicates more households can afford to buy a home. Source: Bloomberg.
Growth in construction spending has returned U.S. construction spending year-over-year Percent change year-over-year 20 15 10 5 0-5 -10-15 -20 2000 2002 2004 2006 2008 2010 2012 2014 Sources: Bloomberg, U.S. Census Bureau.
Average new home nearly 50% bigger today than 40 years ago New home size in square feet Square feet 2,700 2,500 2,300 2,100 1,900 1,700 Average 2012 average: 2,505 sq. ft Median 1,500 1973 1978 1983 1988 1993 1998 2003 2008 Source: U.S. Census Bureau.
Annual U.S. housing starts Million homes 2.5 2.0 1.5 1.0 0.5 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Bloomberg.
Growth in residential construction spending has returned U.S. construction spending year-over-year, residential Percent change year-over-year 30 20 10 0-10 -20-30 -40-50 2001 2003 2005 2007 2009 2011 2013 Sources: Bloomberg, U.S. Census Bureau.
Effective mortgage rate Percent 7 6 5 4 3 2008 2010 2012 2014 Source: Bloomberg.
Rent-to-sales price ratios return to early 2000 s level Median rent, US$ 800 700 Median rent (left) Rent to sales price ratio 8 7 600 6 500 Median rent to sales price 400 (right) 2000 2002 2004 2006 2008 2010 2012 5 4 Source: Bloomberg.
Cap rate spreads falling in recent months Capitalization rates less U.S. Treasury 10-year yield Percent 7 6 5 4 3 Office Retail 2 1 Multi-family 0 2001 2003 2005 2007 2009 2011 2013 Source: Bloomberg.
Foreclosures dropping, though still relatively high Foreclosures as a percentage of total loans, not seasonally adjusted Percent 5 4 3 2 1 0 2005 2007 2009 2011 2013 Source: Bloomberg.
Purchase mortgage originations dropped to lowest in two years Million homes 450 400 350 300 250 200 150 100 50 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: Bloomberg, Mortgage Bankers Association.
Home builder indices stronger, but falling in recent months Index readings above 50 indicate builders consider housing markets good than bad Indices 80 70 Future sales 60 50 40 30 20 10 Traffic of prospective buyers 0 2010 2011 2012 2013 2014 Sources: Bloomberg, National Association of Home Builders.
Increasing roles of GSEs in residential mortgages Mortgage debt outstanding US$ trillions 7 6 5 Freddie Mac 4 3 2 Fannie Mae 1 Ginnie Mae 0 1990 1995 2000 2005 2010 Source: Federal Reserve.
Reemergence of CMBS Commercial mortgage-backed securities issuance in the U.S. US$ billions 300 250 200 150 100 50 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Bloomberg.
Low 10-year Treasury yields 10-year Treasury yield, percent 18 16 14 12 10 8 6 4 50-year average: 6.6 percent 2 0 1964 1971 1978 1985 1992 1999 2006 2013 Source: Bloomberg.
Trulia Bubble Watch: Home prices now 5% undervalued 50% 40% 39% 30% 20% 10% 0% -10% -20% -15% -5% Source: Trulia.
Rising rate expectations have leveled off since last summer 10-year sovereign bonds, 1 year forward rates Percent 3.5 USD 3 2.5 GBP 2 1.5 EUR 1 2012 2013 2014 Source: Bloomberg.
Increasing role of public, non-traded REITs US$ billions 20 18 $18.6B 16 14 12 Investment in public unlisted REITs 10 8 $9.4B 6 4 2 0 REIT IPO capital raised $2.4B 2012 2013 $10.4B Sources: Investment Program Association, Robert A. Stanger & Company.
Increasing number of agents reporting foreign clients Percent of REALTORS reporting at least one international client purchasing U.S. property 2009 2013 Yes 53% No 47% Yes 76% No 24% Source: National Association of REALTORS.
Distribution of international purchasers of California residences Asia & Oceania 54% Europe 16% Latin America & Carribean 12% Canada 11% Africa & Middle East 8% 0 10 20 30 40 50 60 Source: National Association of REALTORS.
Buying cheapest vs renting in Midwest and South Source: Trulia.
Price rebound here, construction boom there Biggest y/y price gains Las Vegas Oakland Riverside-San Bernardino Sacramento Detroit Warren-Troy-Farmington Hills, MI Los Angeles Birmingham, AL Bakersfield Atlanta Most permits vs local norm San Francisco Austin Middlesex County, MA San Jose Oklahoma City Houston New York Boston Fairfield County, CT Orange County, CA Sources: Trulia, U.S. Census Bureau.
Metros that build are more affordable Sources: Trulia, U.S. Census Bureau.
The kids aren t alright 36% 18-34 year-olds without jobs or homes 34% 32% 30% 28% 26% 24% 22% not employed living with parents 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Sources: Trulia, BLS, U.S. Census Bureau.
Young adults go back to work -- slowly Percent employed, 25-34 year-olds 82 81 80 79 78 77 76 75 74 73 72 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: Trulia, BLS.
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Single-family starts lags, but apartment starts boom 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 single family (left scale) rental apartments (right scale) 500 450 400 350 300 250 200 150 100 50 0 Source: Trulia, U.S. Census Bureau.
6-month outlook for the housing market remains strong Index (50 = moderate conditions) An index of 50 delineates moderate conditions and indicates a balance of respondents having weak (index=0) and strong (index=100) expectations. Source: National Association of REALTORS REALTORS Confidence Index.
First-time buyers have not returned to the market Source: National Association of REALTORS REALTORS Confidence Index.
Even as overall household income has risen only 2.5% since 2009, median income of homebuyers has increased significantly more Source: National Association of REALTORS Profile of Home Buyers and Sellers.
Saving for downpayment increasingly difficult for first-time buyers percent indicating most difficult step percent indicating expense delayed saving Source: National Association of REALTORS Profile of Home Buyers and Sellers.
Distressed sales share trending down percent of existing home sales Source: National Association of REALTORS REALTORS Confidence Index.
Investor share may be headed down as home prices rise and inventories remain tight Source: National Association of REALTORS REALTORS Confidence Index.
Rising home prices have reduced the percent of properties with negative equity Source: CoreLogic. CoreLogic Equity Report.
Zillow Home Value Index: Slowing annual and monthly change Source: Zillow
Zillow Home Value Index: Monthly change by price tier Tier Peak to trough Trough to current Peak to current Monthovermonth Bottom -30% 14% -20% 0.4% Middle -24% 13% -15% 0.2% Top -22% 12% -12% 0.2% Source: Zillow
Adults per family is high, households are doubled up Source: Current Population Survey
Young adults are living at home at high rates Source: Census
Renter households are forming faster than owner households Source: Current Population Survey
Increased renter household formation is driving rental demand Source: Zillow
Negative Equity remains widespread, 19.4% nationally Source: Zillow
Affordability issues concentrated on West Coast Source: Zillow
Drop in homebuilder confidence early this year National Association of Home Builders Market Index Index 70 60 50 40 30 20 10 0 2009 2010 2011 2012 2013 2014 Sources: Bloomberg, Barclays, National Association of Homebuilders.
Rising second-lien supply Sources: Barclays CIB, S&P LCD.
CPI rent vs. Case-Shiller 20 with 19 month lag Percent change year-over-year 20 15 10 5 0-5 -10-15 -20 CPI urban consumers owner equivalent rent Percent change year-over-year S&P/Case-Shiller composite 20-city price index -25 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 5 4 3 2 1 0-1 Source: Bloomberg, DoubleLine Capital LP.
Where are the first timers? Source: BofA Merrill Lynch Global Research.
BAML: Homes for the high end Source: BofA Merrill Lynch Global Research, National Association of Realtors, Census Bureau.
Housing starts still well below historic average Seasonally adjusted annual rate, thousands Sources: BofA Merrill Lynch Global Research, Bureau of Economic Analysis, Census Bureau.
U.S. household formations Millions 4 3 2 1 0-1 -2-3 1981 1985 1989 1993 1997 2001 2005 2009 2013 Sources: Bloomberg, DoubleLine Capital LP.
Multifamily building permits Seasonally adjusted annual rate, thousands, 3-month moving average Sources: U.S. Department of Commerce, REIS Inc., Wells Fargo Securities.
American Homes (AMH) US$ 18 17 16 15 14 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Sources: Bloomberg, DoubleLine Capital LP.
Millions of single-family homes became rentals since recession Net owner-to-renter conversions (millions) Sources: JCHS tabulations of U.S. Department of Housing and Urban Development, American Housing Surveys.
Declining incomes and rising rents continue to erode affordability 2012 dollars
Bloomberg Housing Surprise Index Index 1.5 1 0.5 0-0.5-1 -1.5 2011 2012 2013 2014 The Bloomberg ECO Surprise Index (ESI) shows the degree to which economic analysts under- or over-estimate the trends in the business cycle. The surprise element is defined as the percentage (or percentage point) difference between analyst forecasts and the published value of economic data releases. Sources: Bloomberg, DoubleLine Capital LP.
Homeownership rate Percent 70 68 66 64 62 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Sources: Bloomberg, DoubleLine Capital LP.
Lumber vs. Homebuilders Index Index 250 200 150 S&P Homebuilders Index 100 50 Generic lumbar options index 0 2011 2012 2013 2014 Sources: Bloomberg, DoubleLine Capital LP.
New home sales last ten years Thousands 1,600 1,400 1,200 1,000 800 600 400 200 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Sources: Bloomberg, DoubleLine Capital LP.
Existing home sales last ten years Millions 8 7 6 5 4 3 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Sources: Bloomberg, DoubleLine Capital LP.
Housing starts last ten years Thousands 2,500 2,000 1,500 1,000 500 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Sources: Bloomberg, DoubleLine Capital LP.
Mortgage Purchase Index last ten years Mortgage applications index 600 500 400 300 200 100 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Sources: Bloomberg, DoubleLine Capital LP.
Household formation still incredibly depressed U.S. household formation, 4 quarter average 4Q 2013: 0.39 Source: ISI.
Investors are more cautious in 2014 but still optimistic What is your view on home prices in 2014? Source: J.P. Morgan.