housing 2020 : what is shaping the future of housing in virginia
TRANSCRIPT
Housing 2020: What is Shaping the Future of Housing in
Virginia
Problems emanating from the housing market forced financial institutions to take massive write-downs on their mortgage portfolios, igniting a broader banking crisis. Amid fears about the strength of banks and severe losses of both housing and stock wealth, consumer confidence plunged 41 percent below its lowest previous trough. Households slashed their spending and—for the first time on record—cut their net borrowing.
State of the Nation’s Housing 2009
Where we’ve
been in the last 5
years
• Our housing market has been defined by the housing crash over the past 5 years.
• Over 100,000 homes foreclosed in Virginia
• Construction of new homes nearly came to a halt
• Sales of existing homes dipped to record lows
• Nearly 25% of mortgages in Virginia are underwater or near underwater
• The homeownership rate began to decline for the first time
After several false starts, there is reason to believe that 2012 marks the beginning of a true housing market recovery.
State of the Nation’s Housing 2012
We’re beginning to hear noises that we’ve reached a major turning point in the housing market — and that, with interest rates so low, this is a rare opportunity to buy. But are such observations on target? It would be comforting if they were. Yet the unfortunate truth is that the tea leaves don’t clearly suggest any particular path for prices, either up or down.
Robert Schiller, NYT, January 26, 2013
Housing 2020: Why?• We need to look beyond recovery from the Housing
Crash • There are sweeping trends that are re-shaping
housing in seismic ways.• Our housing markets and products will be widely
affected.• Understanding these trends and their impacts will
help us prepare our communities.
THINK BIG: What is shaping the future of housing in Virginia in the next decade?
Demographics
Economics
Finance
Green/Sustainable
Part 1: Demographics
Housing 2020
Demographics
• Virginia’s population is growing• Regional growth varies greatly• New households are different from the past• The “Millennials” are here • The “Age Wave” has arrived• Housing preferences are changing
Demographics
John Martin at SIR / Boomer Project
• CEO of the Boomer Project and president and CEO of the Southeastern Institute of Research
• John has been the guiding force behind the Older Dominion Partnership, an umbrella organization dedicated to studying the impact of the age wave on Virginia and how to prepare for it.
Population Growth
• How much growth?• Where will it be?• Who will it be? • What does it mean for housing?
Putting future demographic change in perspective
Housing Virginia Video Presentations“Population Growth in Perspective” by John Martin
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Where is the growth happening?• 2010
• 2030
Weldon Cooper Center for Public Service
Demography is Destiny: Impacts on communities
Housing Virginia Video Presentations“VA’s Population Growth – Makeup and Expectations” by John Martin
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The AGE WAVE: What is it … What does it mean?
The AGE WAVE: “Age Ready Communities”
Why do we need to be “Age Wave Ready”?
Housing Virginia Video Presentations“The Age Wage” by John Martin
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.
The AGE WAVE: Boomers are diverse; will make different housing
choices as they retire
How are the new HHs in Virginia different from the past ?
Housing Virginia Video Presentations“Shift in HH Makeup” by John Martin
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Multi-generational HHs on the rise
Multi-Generational HHs in Virginia
Multi generational HHs on the rise
No longer just the Walton family…
Household formation in decline
CPS - Current Population Survey; HVS - Housing Vacancies and Homeownership; ACS – American Community Survey
Household Formation
• Unemployment for Millennials is twice the National Average
• Real Wages for Young People have Declined since 2007
• 1 in 3 btw age 18 and 25 report Moving back to Parents House
• House and Apartment Sharing is at High Levels
CPS - Current Population Survey; HVS - Housing Vacancies and Homeownership; ACS – American Community Survey
Household formation in decline
Young HHs Have not been Forming HHs at Normal Rates
HH composition trends will continue:
HH composition trends will
continue
Single and single parent HHs
The Millennials: here they come!
How are the Millennials changing everything?
Housing Virginia Video Presentations“Gen Y” by John Martin
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Owning versus Renting - future housing choices
Housing Virginia Video Presentations“Gen Y Perspective on Work/Living” by John Martin
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The Gen Y view of owning a home differs from their parents.
Housing Virginia Video Presentations“Gen Y View on Home Ownership” by John Martin
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“Self Supportive” housing – new owners will place different demands on their homes
Housing Virginia Video Presentations“Self Supportive Housing” by John Martin
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The Tailwind in the market: Boomers and Millennials converge
on the same housing choice:
Urban, walkable, connected, smaller, affordable, green
Housing Virginia Video Presentations“Tailwinds” by John Martin
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The NEW FRU
What the new frugality means for housing?
Housing Virginia Video Presentations“The New FRU” by John Martin
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Takeaways: Demographics• 80% of VA population growth in the “Crescent”• The Age Wave is NOW – Boomers still drive the market… but
in a different direction • Aging in place creates new demands on the housing stock• Multi – Gen HHs need different housing design and style• Single headed HHs / non-family HHs will continue to rise• Immigrants / Minorities – VA will be majority minority by
2040• Millennials – a different view of housing / not as central as for
boomers• The “TAILWIND” : Boomers and Millennials converge on
housing preferences: urban, smaller, affordable, green
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