Green Pearl Events Multifamily Investment Summit Art Cresce Presentation

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Disclaimer

This presentation is being given to inform interested parties of research and to encourage discussion. Any views expressed are those of the author and not necessarily those of the U.S. Census Bureau.

Key Points Covered

• What are the housing data sources produced by the Census Bureau?

• What do the data tell us about trends in homeownership and renting?

• Where do we go from here?

• Proposed new multifamily housing finance survey

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Sources of Data on Housing Tenure (Owner/Renter) Status and Other Housing

Characteristics

• Current Population Survey/Housing Vacancy Survey (CPS/HVS)

• American Community Survey (ACS)

• Survey of Market Absorption

• Survey of Construction

• New York City Housing Vacancy Survey

• American Housing Survey (AHS)

• 2010 Census

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1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998

2001 2004 2007 Note: The data points are placed at the beginning of the respective time periods.

Source for Recession Data: National Bureau of Economic Research, Inc., 1050 Massachusetts Ave., Cambridge, MA.

Source for Rental and Homeowner Vacancy Rates: Current Population Survey/Housing Vacancy Survey, U.S. Census Bureau, Washington, DC 20233.

Recession

Percent

Annual Rental and Homeowner Vacancy Rates for the United States:

1968–2008

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Quarterly Homeownership Rates for the United States: 1Q2007 – 3Q2009

Quarterly Homeownership Rates for the United States: 1997-3Q2009

60.0

61.0

62.0

63.0

64.0

65.0

66.0

67.0

68.0

69.0

70.0

Quarter

Perc

ent

Recession Homeownership Rate

Source for data: Current Population Survey Housing Vacancy Survey, U.S. Census Bureau, Washington, D.C.

Source for Recession Data: National Bureau of Economic Research, Inc., 1050 Massachusetts Ave., Cambridge, MA

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Quarterly Homeowner and Rental Vacancy Rates for the United States: 1Q1997 – 3Q2009

Quarterly Rental and Homeowner Vacancy Rates for the United States: 1997-3Q2009

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

12.0

13.0

14.0

15.0

16.0

Quarter

Per

cen

t

Recession Rental Vacancy Rate Homeowner Vacancy Rate Gross Vacancy Rate

Source for data: Current Population Survey Housing Vacancy Survey, U.S. Census Bureau, Washington, D.C.

Source for Recession Data: National Bureau of Economic Research, Inc., 1050 Massachusetts Ave., Cambridge, MA

Owner-Occupied Units: 1Q2005 – 3Q2009

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(In thousands)

Source: Current Population Survey Housing Vacancy Survey, U.S. Census Bureau, Washington, DC 20233

Renter-Occupied Units: 1Q2005 – 3Q2009

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(In thousands)


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Absorption Rates for New Multifamily 5+ Units for the United States: 2000-2008

Source: Survey of Market Absorption, U.S. Census Bureau , Washington, D.C.

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Absorption Rates for New Multifamily 5+ Units for the South: 2000-2008

Source: Survey of Market Absorption, U.S. Census Bureau , Washington, D.C.

Homeownership Rates and Vacancy Rates: Boston

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Source: American Community Survey, U.S. Census Bureau, Washington, DC 20233

Median Gross Rent for Boston: 2005-2008(2008 Dollars)

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Homeownership Rates and Vacancy Rates: Chicago

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Median Gross Rent for Chicago: 2005-2008(2008 Dollars)

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Homeownership Rates and Vacancy Rates: New York City

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Median Gross Rent for New York City: 2005-2008

(2008 Dollars)

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1002

1010

1023

1044

980

990

1000

1010

1020

1030

1040

1050

2005 2006 2007 2008

Homeownership Rates and Vacancy Rates: Tampa


Homeownership Rate

55.6

57.7

55.7

57.2

54.5

55.0

55.5

56.0

56.5

57.0

57.5

58.0

2005 2006 2007 2008

2.8

5.1

3.9

6.15.0

12.411.8

4.5

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

2005 2006 2007 2008

Homeowner VacancyRate

Rental Vacancy Rate

Median Gross Rent for Tampa: 2005-2008(2008 Dollars)

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794

826

876 880

740

760

780

800

820

840

860

880

900

2005 2006 2007 2008

Where Do We Go From Here: Key Factors to Consider

• Population movement back toward the central cities

• Public policy

• Response of homebuilders

• Attitudes toward homeownership and renting

• Historically high rental vacancy rate

• Where will the Boomers go when they retire?

• We have been there before

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Population Movement Back Toward the Central Cities

• Evidence of renewed growth in central cities

• Work by William Frey using July 1, 2008 population estimates provided by the Census Bureau

Public policy

• First-time buyers tax credit extended

• Expansion of tax credit to homeowners who have lived in their house for at least 5 years

• Mortgage interest tax deductions

Response of Homebuilders

• What will be the response of homebuilders?

– New home construction

– Multiunit construction

– Possible change in square footage of new homes

Completion of Single-Family Units: 2003-2008

Single-Family Housing Units

13861532

1218

819

16541636

0200400600800

10001200140016001800

2003 2004 2005 2006 2007 2008

(Numbers in thousands)

Note: Relative Standard Error (RSE) is 2% for single-family units.

Source: Survey of Construction, U.S. Census Bureau, Washington, D.C.

Completion of Multifamily Units: 2003-2008

5672

97

199 198

169

200

101116

127

238236

0

50

100

150

200

250

2003 2004 2005 2006 2007 2008

Owned

Rented

(Numbers in thousands)

Note: Relative Standard Error (RSE) is 6% for owned units and 5% for rental units.


Square Footage of Floor Area for New Privately Owned Single-Family Housing Units Started:

2003-2008

23432384

24622492 2507

2463

21742230

22592245

21602127

1900

2000

2100

2200

2300

2400

2500

2600

2003 2004 2005 2006 2007 2008

Median

Average


Note: Relative Standard Error (RSE) is 2% for median and average

Historically high rental vacancy rate

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Attitudes Toward Homeownership and Renting

• In response to the current spate of foreclosures, how will potential homebuyers respond?

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What Will Boomers Do When They Retire?

• Typically ownership declines in the older age groups of the 65+ population

• Boomers will comprise an increasing percentage of the population 65+ over the next several decades

• Warmer climates may not be quite as attractive as before – Frey (2009) notes that for the first time in recent memory outmigrants from Florida between 2007 and 2008 exceeded inmigrants

Many Options Available, Some of Them Involve Multifamily Housing

• “Aging in Place” – stay in current housing unit but make sure space accommodates limitations

• “Age restricted” communities – assumption of more independence – can be both single family and multifamily communities

• Independent living/assisted living facilities – assumption that residents will need some level of assistance - many of these involve multifamily structures

• Living with the children

We Have Been There Before

• 1990 Census was the first census since the 1950 Census to have a decline in the homeownership rate

• Myers et al. (1992) raised the question about a potential retreat from homeownership

• Housing prices rose dramatically on east and west coasts during the 1980’s

• Householders under 45 experienced greatest decline

• Issue of affordability

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Proposed Multifamily Housing Finance Survey

• Residential Finance Survey (RFS) – only statistically representative picture of multifamily (MF) housing finance in U.S.– No funding for a traditional RFS– No single, comprehensive source of information on

MF financing

• Proposed survey – Use properties in SOMA and AHS samples (maybe

from ACS sample as well)– Ask questions similar to RFS and 1995 Property

Owners and Managers Survey– Potential 2011 survey date – pending funding approval

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For More Information:

• American Community Survey –

http://www.census.gov/acs/www/

• Housing Data –

http://www.census.gov/hhes/www/housing.html

• My contact information:

email: [email protected]

phone: 301-763-3188

http://www.census.gov/acs/www/

http://www.census.gov/hhes/www/housing.html

mailto:[email protected]

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Real Estate

Green Pearl Events Multifamily Investment Summit Art Cresce Presentation