FEATURED ARTICLE: 2019 HOUSING OUTLOOK
HOUSING AFFORDABILITY & MIGRATION
How will population and job migration patterns
impact regional housing trends in 2019? 7
“The long-term trend toward less mobility won’t fundamentally shift, but we should see slightly higher migration rates as the least affordable areas push people out.”
ANNUAL INCOME NEED TO BUY A MEDIAN-PRICED HOME (3% DOWN AND 28% FRONT-END DTI)
BREAKDOWNS BY INCOME TO BUY $100K+ to Buy a Home Less than $100K to Buy a Home
$7,597
$377,210
YUN: Hello Florida, Tennessee, Texas, and Nevada. Increasing number of tax filers will begin to recognize a higher cost of living in California, Connecticut, Illinois, New Jersey, and New York from inability to fully deduct mortgage interest and state-and-local taxes. So the migration of baby boomers into warmweather states as they (transition) into retirement age will accelerate with an extra nudge from tax considerations. Regarding jobs, com- panies will expand into more affordable regions of Rocky Mountain states and Southern states. That is, homeowners will do very fine in places like Utah, Texas, and North Carolina. TERRAZAS: Population and job migra- tion should tick upward in 2019 driven by a cyclical boost in cross-market job seek- ers and a tight national labor market. The long-term trend toward less mobility won’t fundamentally shift, but we should see slightly higher migration rates as the least affordable areas push people out. KIEFER: While much of the focus is on national trends, local market dynamics are incredibly important for understand- ing housing markets. We have seen that the markets with the most robust pop- ulation and labor market growth have tended to have the strongest housing markets, while areas with declining populations, such as many Rust Belt cities, have struggled. Those trends have been evolving over decades and likely will persist into 2019. Areas dependent on agriculture or other export-focused goods and services may struggle if trade
AARON TERRAZAS
POPULATION
30.03%
“Regions that historically benefit from migration will continue to do so. These are largely in the south, particularly Florida due to retirees, and increasingly Texas due to its labor market.”
69.97%
TENDAYI KAPFIDZE
2017 COMBINED NET MIGRATION (CENSUS)
902,999
disputes widen or global growth slows.
gration will continue to do so. These are largely in the south, particularly Florida due to retirees, and increas- ingly Texas due to its labor market. GARDNER: Over the past few years there has been significant migration to the Seattle area from cities in Califor- nia like San Francisco where home prices and taxes are substantially higher. Given continued growth in Se- attle’s technology sector, I expect this trend to continue, allowing regional home price growth in 2019 to trend above its long-term average. DUNCAN: We have not complet- ed an analysis for regional housing markets for 2019. ZANDI: The Trump Administration’s anti-immigration policies have begun to reduce household formations and thus housing demand. This will become more evident in 2019. Millennials living with their parents should also finally begin to decline in 2019, supporting multifamily rental demand.
KAPFIDZE: Interstate migration and labor force mobility have been in decline since the late ‘80s. Even in years of high migration, most real estate dynamics depend on the local population in place and the evolution of the labor market. Nonetheless, re- gions that historically benefit from mi- “Hello Florida, Tennessee, Texas, and Nevada. Increasing number of tax filers will begin to recognize a higher cost of living in California, Connecticut, Illinois, New Jersey, and New York from inability to fully deduct mortgage interest and state-and-local taxes.”
79,741
$100K+ to Buy a Home
Less than $100K to Buy a Home
2017 POPULATION NET MIGRATION (U.S. CENSUS)
MEDIAN HOME PRICE
-49,770
49,770
530,446
210,503
$100K+ to Buy a Home
Less than $100K to Buy a Home
PCT OF INCOME TO BUY
67.7%
37.6%
LAWRENCE YUN
CLICK TO VIEW INTERACTIVE VISUAL
$100K+ to Buy a Home
Less than $100K to Buy a Home
20 think realty housing news report
january 2019 21
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