WASHINGTON AREA HOUSING OUTLOOK

ER F I R S T Q UA R T 2015 ES T A I C O S S A A DELT A E R A N O T G WA SHIN K O O L T U O G H O U SIN SP ON S ORE D for Reatel Estate entete C r f...
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ER F I R S T Q UA R T

2015

ES T A I C O S S A A DELT A E R A N O T G WA SHIN K O O L T U O G H O U SIN SP ON S ORE D

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BY

THE WASHINGTON METRO AREA FOR-SALE HOUSING MARKET

M A R K E T I N D I C ATO RS

Washington Metro Area | At First Quarter 2015 | Figure 1 CHANGE VS. Q4 2014

Q1 AVG. SALES PRICE Q1 SALES (UNITS)

CHANGE VS. Q1 2014

Modest conditions during the first quarter of 2015 indicate that the rebound effect in the Washington metro area housing market is

$451,640

3.1%

2.5%

waning. Year-over-year average sale prices are softening as inventory

11,948

17.1%

8.8%

picks up and the bidding wars that defined the market early in the

10

13

recovery disappear. The average number of days on market has also

Q1 AVG. DAYS ON MARKET

69

SALES PACE*

2.8 Months

0.3 Months

0.1 Months

Source: MRIS, Delta Associates; April 2015. *Sales pace at March 2015. Pace is ratio of total for-sale inventory to current month’s sales.

moved above the long-term average, further suggesting that the regional housing market expansion is decelerating. • 1st quarter prices: Up 2.5% from last year at this time. • Unit volume: Up 8.8% during 1st quarter 2015 compared to 1st quarter 2014. • Days on market: Up 13 days since 1st quarter 2014 to 69 days and 6 days more than the 10-year average of 59 days. • Months of inventory: Up 0.1 month since 1st quarter 2014. Support for the broader housing market in the period ahead will come from the ongoing improvement in the national economy and consumer confidence that is now back to pre-recession levels. However, impediments such as weak wage growth and lower job growth combined with an anticipated increase in mortgage rates may keep the region’s housing market performance modest in the remainder of 2015. For current housing market indicators, see Figure 1.

PRICE GROWTH CONTINUES TO DECELERATE In the first quarter of 2015, the average sale price of a Washington area home was $451,640 — an increase of 2.5% from one year earlier. This rate of price growth compares to 5.5% at first quarter 2014 and 9.2% at the same quarter in 2013. Price growth is likely to remain below the long-term average as the number of active listings in the region continues to increase in the near term. This slowdown in price growth could boost demand for housing this year, however. DE LTA AS S OCIATES | G M U CEN T ER F O R R EAL EST A T E E N T R E PR E N E U R S H IP

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WASHINGTON AREA HOUSING OUTLOOK

FIRST QUARTER 2015

The Washington area’s Core Jurisdictions of Alexandria and Arlington as well as the District of Columbia experienced the greatest price increase among the sub-areas. The average price of homes sold in the Core Jurisdictions, at $601,374 in first quarter 2015, was 5.7% higher than the average price in first quarter 2014. • Alexandria: home prices rose 10.5% from a year ago. • Arlington: prices increased 5.9% compared with prices at this time last year. • The District: average home prices went up 5.1% from a year earlier. The Inner Ring jurisdictions of Fairfax, Montgomery, and Prince George’s counties (including Falls Church and Fairfax cities) had an average sale price of $429,889 in first quarter 2015, which was a slight increase of 1.2% from a year ago. • Prince George’s: prices increased 7.7% compared with prices from a year earlier. • Montgomery County: home prices declined 1.9% from this time last year.

H O M E P R I C E S BY S U B - A R EA *

Washington Metro Area | At First Quarter 2015 | Figure 2 CHANGE VS. Q4 2014

SUB-AREA*

Core

• Fairfax County: average prices climbed 3.7% from the average a year earlier.

CHANGE VS. Q1 2014

$601,374

2.2%

5.7%

2,458

20.6%

4.4%

In the Washington area’s Outer Suburbs of Prince William, Loudoun,

Units

$429,889

3.3%

1.2%

and Frederick counties, first quarter 2015 prices were 3.3% higher than

6,366

16.9%

8.9%

a year earlier, with an average price of $375,860. See Figures 2 and 3.

Outer

$375,860

1.7%

3.3%

Units

2,954

14.2%

14%

Inner Units

• Prince William County: average home prices increased by 5.4% from one year earlier.

Source: MRIS, Delta Associates; April 2015. *Core: DC, Arlington, Alexandria. Inner: Fairfax, Montgomery, Prince George’s, Fairfax City, Falls Church. Outer: Loudoun, Prince William, Frederick.

• Loudoun County: the average sales price in 1st quarter 2015 was 2.1% higher than the average a year earlier. • Frederick County (MD): average prices were 4.0% higher than a

HOME SALES AVERAGE PRICE CHANGE 1 2 - M O . T R A I L I N G AV G . P R I C E C H A N G E

Washington Metro by Sub-Area* | 2005 – First Quarter 2015 | Figure 3 Core

40%

Inner Outer

30%

quarter 2015. With slower price growth, unit volume sold during first

10%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

quarter 2015 went up 8.8% from a year ago, with sales in March 2015 marking the fourth month in a row of year-over-year increase in total

-10% -20%

sales. This is in contrast to the decline in sales throughout 2014 when

-30% -40%

SALES VOLUME UP Sales activity in the Washington area is off to a healthy start in first

20%

0%

year earlier.

2005

2006

2007

2008

2010 2009 Axis Title

2011

2012

2013

2014

2015

Source: MRIS, Delta Associates; April 2015. *Core: DC, Arlington, Alexandria. Inner: Fairfax, Montgomery, Prince George’s, Fairfax City, Falls Church. Outer: Loudoun, Prince William, Frederick.

volume over the year dipped as low as 7.1%. Slower price growth and encouraging news on the regional economy are positive factors that will continue to support strong sales activity in the near term.

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WASHINGTON AREA HOUSING OUTLOOK

FIRST QUARTER 2015

Unit volume sold has been sustained fairly well in light of lackluster regional job gains. While the Federal government has trimmed its workforce, the private sector continues to create enough new jobs to help offset the local economic impact of Federal austerity measures.

DAYS ON MARKET RISES ABOVE THE LONG-TERM AVERAGE Homes in the Washington area averaged 69 days on the market in the first quarter of 2015, up 14 days from one year earlier and climbing above the 10-year average of 59 days. The increase in days on market over the year is driven by a rising number of listings in the area, with active listings up 20.9% from a year ago. Bidding wars among investors and regular homebuyers from earlier in this recovery period have now faded. Homes are also lingering longer on the market since homebuyers now have a larger selection of listings at more moderate prices. See Figure 4. FOR-SALE LISTINGS

Washington Metro Area | Existing Houses | Figure 4

Time on market is shortest in the Core Jurisdictions and longest in the Outer Suburbs. Differences between the market’s geographic sub-areas

45,000 40,000

30,000

LISTINGS

had widened a bit near the end of 2011 and in early 2012 as uncertainty

10-Year Average = 21,063 Listings

35,000

over the Federal budget began to affect the market, although the gaps

25,000

were not as divergent as in the 2006-2009 period. Those gaps became

20,000 15,000

less pronounced in the second half of 2012 and during 2013, indicating

10,000

a healthy overall market. Early in 2015, the market remains healthy

5,000 0 3/02

3/03

3/04

3/05

3/06

3/07

3/08

3/09

3/10

3/11

3/12

3/13

3/14

3/15

overall, but the pace of activity has been slowing.

Source: MRIS, Delta Associates; April 2015.

• Core: Time on market was 54 days at the end of 1st quarter 2015, up 3 days from the average one year earlier.

AVERAGE DAYS ON MARKET

• Inner Ring: Time on market averaged 68 days in the 1st quarter of

Washington Metro by Sub-Area* | Existing Houses | Figure 5

2015, up from 54 days one year earlier. • Outer Suburbs: Time on market was 79 days during the 1st

150

125

Market Average at Q1 15: 69 Days

quarter of 2015, an increase from 59 days a year earlier and

D AY S

100

Outer

75

Core

50

Of note, the average selling price in the first quarter of 2015 was 98.1%

25

0

just 5 days above the regional 10-year average. See Figure 5.

Inner

of list price. The ratio ticked down as listings increased and buyers Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Source: MRIS, Delta Associates; April 2015. *Core: DC, Arlington, Alexandria. Inner: Fairfax, Montgomery, Prince George’s, Fairfax City, Falls Church. Outer: Loudoun, Prince William, Frederick.

became less willing to pay nearly full price, taking advantage of more options at varying price points. Additions to the available inventory may create a larger bid/ask spread in the year ahead.

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WASHINGTON AREA HOUSING OUTLOOK

FIRST QUARTER 2015

AVAILABLE INVENTORY SLIGHTLY INCREASES The metro area has an average of 2.8 months of for-sale inventory

PRICE CHANGE AND INVENTORY

Washington Metro Area | 2004 – First Quarter 2015 | Figure 6 12-Month Price Change (left axis)

30%

20%

12

15% 10%

9

5% 0% -5%

04

05

06

standing at 13,375, which is a 20.9% increase from the end of first

15

25%

07

08

09

10

11

12

13

14

15 6

-10% 3

-15% -20%

Months of Inventory (right axis)

-25%

MONTHS OF INVENTORY*

12-MONTH PRICE CHANGE

at the end of first quarter 2015, with the number of active listings

0

Source: MRIS, Delta Associates; April 2015. *Months of inventory at current sales pace for last month in each quarter.

quarter 2014. Newly optimistic Washington area residents are putting their homes on the market thanks to growing consumer confidence nationwide. Although the first quarter 2015 sales pace is still below the long-term average of 3.9 months, the inventory crunch will likely continue to ease as price gains – though modest – continue and as the regional job market improves steadily. See Figure 6. In recent years, the Washington area’s average prices tend to rise when the ratio of inventory to sales is below six months. This ratio is calculated by dividing the number of listings by the number of sales at a given point in time. If the number of sales increases and the number

MONTHS OF FOR-SALE INVENTORY

of listings decreases or remains the same, the ratio may be low, as at

Washington Metro Area | Figure 7

the peak of the housing market in 2005. The relatively low ratio we

8

March 2014

have seen in the past two years is primarily due to a lower number

MONTHS OF INVENTORY AT S A L E S P A C E *

March 2015

6

of listings, rather than robust sales volume. However, the number of

Mar 2015: 2.8 Months

listings is now increasing, and the months of inventory available, while

Mar 2014: 2.7 Months

relatively low, is higher than a year ago.

4

2

Fauquier County in Virginia had the highest ratio of listings to sales at approximately 8.1 months of inventory at March 2015. Falls Church

0

Falls Ch

District

Alex

Pr Geo

Arl

Ffx Cnty

Pr Will

Mont

Fred (MD)

Lou

Ffx City

Source: MRIS, Delta Associates; April 2015. Note: Sales pace at March 2015. Pace is ratio of total for-sale inventory to current month’s sales.

Fauq

City has the lowest available inventory relative to sales this quarter at 1.4 months. See Figure 7.

PEER CITIES OUTPERFORM THE WASHINGTON AREA PRICE CHANGES

Selected Large Metro Areas | 1994 – 2014 | Figure 8 PRICE CHANGES REFLECTED IN P U R C H A S E - O N LY I N D E X E S

200% 175%

169%

By most measures, the Washington metro area housing market has performed consistently better than other metro areas’ housing markets. This is seen most clearly when examining long-term performance. Recently, however, price growth in most major U.S.

150%

metros has surpassed the Washington market’s rate of growth. In

125%

particular, metros such as Miami, Dallas, and San Francisco are seeing

100%

more robust price growth.

75% 50% 25%

The Federal Housing Finance Agency (FHFA) reported that the Washington metro area experienced price growth of 169% from

Source: FHFA, Delta Associates; April 2015. Note: Price change at 4th quarter of respective year; seasonally adjusted.

the fourth quarter of 1994 through the fourth quarter of 2014, with Washington placing third after Los Angeles and San Diego among large metros. See Figure 8.

DE LTA AS S OCIATES | G M U CEN T ER F O R R EAL EST A T E E N T R E PR E N E U R S H IP

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WASHINGTON AREA HOUSING OUTLOOK

FIRST QUARTER 2015

Meanwhile, Case-Shiller has reported that Washington home prices increased 1.3% from January 2014 to January 2015, the most recent

PRICE CHANGES

20-City Composite | January 2014 – January 2015| Figure 9

data available. Washington underperformed the 20-city composite increase of 4.6% over the same period, though the composite price

HOME PRICE INDEX GROWTH

9% 8%

gain continues to decelerate as part of a national slowdown. Among

7%

the 20 cities in the composite, Washington ranked last in price growth

6% 5%

as of January 2015. The metro area’s housing market began to recover

4%

earlier in the cycle, and its performance is now being exceeded by

3% 2%

1.3%

other metropolitan areas. See Figure 9.

1% 0%

Of note, Case-Shiller’s methodology is different from FHFA’s in that Source: S&P/Case-Shiller, Delta Associates; April 2015. Note: Seasonally adjusted purchase-only index.

Case-Shiller tracks “same-store” prices, or comparable unit sales.

WASHINGTON AREA HOUSING OUTLOOK Momentum has slowed in the Washington metro area housing market. Average prices during the first quarter of 2015 increased but at a much slower pace of just 2.5% year-over-year. The average days on market in the metro area has risen above the 10-year average of 59 days, further indicating that the housing market expansion is leveling off. Despite these moderated market indicators, there is some good news: the recent slowdown in price gains has helped to improve sales activity. Sales volume from one year ago is up 8.8%, a turnaround from the decline in sales during 2014. Meanwhile, the growing optimism about the Washington economy has helped more homeowners feel confident about putting their homes up for sale. As a result, the metro area available housing inventory continues to pick up early this year. As the limitation in supply continues to ease, local price growth will likely remain in the modest rage of 2% to 4% annually in the short term. This slowdown in price growth should, however, put purchasing a home within reach of more Washington area buyers as prices become more consistent with buyer preferences, wage growth, and rent changes in the region. Sales activity early in 2015 may also be spurred by buyers on the sidelines who will act before mortgage rates become less favorable later this year if the Federal Reserve increases the federal funds rate.

As price growth slows, more Washington area buyers are within reach of purchasing a home. Meanwhile, growing optimism about the economy is encouraging homeowners to put their homes on the market. DE LTA AS S OCIATES | G M U CEN T ER F O R R EAL EST A T E E N T R E PR E N E U R S H IP

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WASHINGTON AREA HOUSING OUTLOOK

FIRST QUARTER 2015

On balance, we expect that a combination of the following will bring modest gains to the Washington-area for-sale housing market in 2015: • Mortgage interest rates that remain relatively low by historical standards, notwithstanding a potential modest increase during the latter half of 2015. • An easing of lending standards by Fannie/Freddie that will open up homeownership, especially to first-time home buyers. • Job growth, driven by the private sector, that is likely to gain traction this year. • Growing confidence by builders, lenders, and buyers that the height of market risk has passed. • Income growth and household formation that will propel new home buyers into the marketplace. Of note, a projected decline in the region’s apartment rents will likely slow the rate of price gains for Washington-area single-family houses in the year ahead.

Modest gains to the Washington area for-sale housing market are expected to come out of 2015, including: Low Mortgage rates Easing of lending standards Private sector job growth Overall confidence in the market

DE LTA AS S OCIATES | G M U CEN T ER F O R R EAL EST A T E E N T R E PR E N E U R S H IP

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FIRST QUARTER 2015

THE BIG PICTURE R ESA L E VO LU M E

P E RC E N T C H A N G E I N H O U S E P R I C E S

Washington Metro Area | All Housing Types | Figure 11

Washington Metro Area vs. 20-City Composite | Figure 10

120,000

25%

20%

% CHANGE

15%

HOUSING UNITS SOLD

Washington Metro Area U.S. 20-City Composite

10% 5% 0% -5% -10% -15% -20% 2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015*

Source: S&P/Case-Shiller, Delta Associates; April 2015. *12 months ending April 2015. Note: Seasonally adjusted purchase-only index.

100,000

80,000

60,000

40,000

20,000

0

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015*

Source: MRIS, Delta Associates; April 2015. *Annualized.

Our Take: The Washington area saw a 1.3% increase

Our Take: Sales volume during the first quarter of

in existing home prices for the 12 months ending

2015 was 11,948 units, up 8.8% from the same period

January 2015 (per Case-Shiller data), underperforming

last year.

the 20-city composite average of 4.6%. Washington outperformed its peer cities earlier in the cycle but now trails all major metros. Most of the major markets included in the composite index, however, are experiencing a slowdown in price growth.

ANNUAL AVERAGE DAYS ON MARKET

R ESA L E P R I C E C H A N G E

Washington Metro Area | Existing Houses | Figure 12 120

10-Year Average = 59 Days

100

Washington Metro Area | Trailing 12 Months | Figure 13 6%

105

4%

D AY S

80

69

2%

60 40

45

27

0%

20

-2%

0

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015*

Source: MRIS, Delta Associates; April 2015. *At First Quarter 2015.

Mar '14

Apr '14

May '14

Jun '14

Jul '14

Aug '14

Sep '14

Oct '14

Nov '14

Dec '14

Jan '15

Feb '15

Mar '15

Source: MRIS, Delta Associates; April 2015.

Our Take: The average time on the market for first

Our Take: Price growth this quarter weakened

quarter 2015 is 69 days, up from 55 days one year earlier

compared to the elevated price gains earlier in the

and 10 days above the 10-year average of 59 days.

recovery period. On a 12-month trailing basis, the average price in March 2015 increased 1.5% from March 2014.

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WASHINGTON AREA HOUSING OUTLOOK

FIRST QUARTER 2015

TACKLING AFFORDABILITY WITH ENERGY EFFICIENT HOMES In early 2015 sales activity in the Washington metro area rose, as home prices continued to slow down. This trend may be an indication of how the pool of potential home buyers is now increasing as a greater array of listings at more moderate prices becomes available. This trend also suggests that those who are looking to buy remain watchful of their ability to afford homes in the area. In light of this concern, one of the tools that could make a home more marketable and more affordable while saving on monthly household expenses over the long term is the energy efficient mortgage (EEM). EEMs help to offset higher prices by allowing potential homebuyers to qualify for larger loans at a time when credit availability is tight. One advantage of this lending program is that conventional EEMs can boost the borrower’s buying power by letting lenders count the estimated energy savings of a “green” home that the borrower is looking to purchase as part of the borrower’s income. This thereby stretches the debtto-income qualifying ratio, allowing the borrower to qualify for a larger loan amount without having to increase the down payment. EEMs also help borrowers add value to their homes while maximizing monthly housing costs. One type of EEM, the Energy Improvement Mortgage, helps homebuyers save money on future energy costs by allowing cost-effective, energy-saving measures to be financed as part of their mortgage. According to Fannie Mae’s guidelines for EEMs, the full cost of qualifying energy investments made by the borrower will then be accounted for in the home appraisal, adding value to the home. Like other lending programs, the benefits of EEMs vary based on the qualifications of the borrower, the home’s current energy rating, and the cost of planned energy improvements. Recent surveys are showing that buying energy-efficient homes under EEMs is a good investment, however. A study by the University of North Carolina found that mortgages on homes with Energy Star labels – a certification of a building’s energy efficiency – were, on average, 32% less likely to default than mortgages on homes without energysaving improvements. Meanwhile, a controlled study by University of California researchers found that California homes labeled energy-efficient by rating systems such as Energy Star, LEED, and GreenPoint Rated increased their selling price by an average of 9% compared with homes with no “green” labels. There is also growing demand for energy-efficient homes, which could make the selling process faster and more marketable for “green” homeowners in the future. According to the United States Green Building Council (USGBC), the share of new single-family residential construction that is considered energy efficient has grown notably, increasing from 2% in 2005 to 23% in 2013. USGBC estimates that by 2016 the market share of energy-efficient single-family homes will increase to a range of 26% to 33%. Although the USGBC data only account for newly constructed homes, it underscores the growing marketability of homes with “green” features. More and more potential homebuyers are also willing to pay premiums on energy-efficient products for their homes, especially as they begin to count these investments as long-term savings. A study by John Burns Real Estate shows that 91% of potential homebuyers want energy efficient products, given one caveat: these products should prove to save them on monthly expenses. In Washington, homeowners have already begun to recognize how energy-efficient measures can mitigate rising homeownership costs. In the District alone, USGBC shows that there are 612 single-family homes with LEED home certifications – another green building rating program. This compares to 48 LEED certified homes that USGBC publishes for Chicago and 32 homes in Seattle. Increasing awareness of EEMs as well as other incentives for owning “green” will help homeowners overcome concerns over affordability to a degree, boosting the slowdown in ownership preferences and sales activity.

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FIRST QUARTER 2015

WASHINGTON AREA ECONOMIC OUTLOOK We expect job growth in the metro area to remain tempered for an

PAY RO L L J O B G ROW T H

Large Metro Areas | 12 Months Ending February 2015 | Figure 14 225

expansion cycle – in the range of 40,000 to 50,000 jobs per year from 2015 through 2018. This is sufficient to support a healthy residential real estate industry, but below the levels experienced in most recent expansion cycles. See Figures 14-16.

150

Since October 2014, job growth has exceeded 35,000 jobs per year on

75

52.0

a trailing 12-month basis, peaking at 52,000 jobs in the most recent reporting period – February 2015. We expect this gradual strengthening

0

LA Basin

NY

DFW

SF Bay

Atl

Hou South Fl

Chi

Phx

Den

Was

Bos

Source: BLS, Delta Associates; April 2015.

of employment growth to continue in 2015 and 2016. The Federal government should shed fewer jobs, Professional and Business Services will likely experience steady improvement, and Retail Trade and Leisure/Hospitality will continue to record strong job growth. Of

U N E M P LOY M E N T R AT E S

Large Metro Areas | February 2014 vs. February 2015 | Figure 15 10%

U N E M P L O Y M E N T R AT E

February 2014

February 2015

note, the Retail and Hospitality sectors create lower-wage jobs and leave many workers underemployed, but they are a strong source of jobs, nonetheless.

National Rate

8%

6.6% 6%

5.5%

We estimate that an annual average of 47,300 payroll jobs will be added to the Washington metro area economy during the five-year

4%

period from 2015 to 2019. Private sector firms will be the cornerstone

2%

of employment growth in the period ahead. 0% DFW

Hou

Den

SF Bay

Bos

Was

Source: BLS, Delta Associates; April 2015.

S Fla

Phx

Atl

NY

Chi LA Basin

Note: National rates are seasonally adjusted.

PAYROLL JOB GROWTH

Washington Metro Area | 1999 – 2019 | Figure 16 140

5-Year Projected Average = 47,300/Year

THOUSANDS OF NEW P AY R O L L J O B S

120 100

20-Year Annual Average = 41,700/Year

80 60 40 20 0 -20 -40 -60 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Source: BLS, Delta Associates; April 2015.

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DELTA ASSOCIATES Delta Associates is a firm of experienced professionals serving the commercial real estate industry for over 35 years. The firm’s main practice areas are: 1. Consulting, research, and advisory services for all property types throughout the United States (including market feasibility studies, highest and best use analysis, market entry strategies, asset performance enhancement studies, market due diligence, white papers on special topics, valuation analysis, and litigation support); and 2. Subscription publications for selected metro areas for the apartment, condominium, office, retail, and housing markets. For more information on Delta Associates, please visit DeltaAssociates.com. Delta’s Washington Area Housing Outlook team includes: • Rachelle Sarmiento, Senior Associate: [email protected] or 202-778-3114 • David Parham, Senior Vice President • Sallie Drumheller, Graphic Designer For information about Delta’s consulting services, please contact David Weisel, CEO: [email protected] or 202-778-3119. For information about Delta’s subscription publications, please contact Jennifer Glaser, Director of Operations: [email protected] or 202-778-3106. Headquarters 1717 K Street, NW Suite 1010 Washington, DC 20006 202.778.3100 [email protected] © 2015. All rights reserved. You may neither copy nor disseminate this report. If quoted, proper attribution is required. Sources: Bureau of Labor Statistics, Center for Regional Analysis, Delta Associates, Energy Star, Federal Housing Agency, Federal Housing Finance Agency, John Burns Real Estate, Metropolitan Regional Information Systems, NATIONAL ASSOCIATION of REALTORS®, S&P/Case-Shiller, U.S. Census., U.S. Green Building Council, Washington Post Although the information contained herein is based on sources which Delta Associates (DA) believes to be reliable, DA makes no representation or warranty that such information is accurate or complete. All prices, yields, analyses, computations, and opinions expressed are subject to change without notice. Under no circumstances should any such information be considered representations or warranties of DA of any kind. Any such information may be based on assumptions which may or may not be accurate, and any such assumption may differ from actual results. This report should not be considered investment advice.

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FIRST QUARTER 2015

GEORGE MASON UNIVERSITY CENTER FOR REAL ESTATE ENTREPRENEURSHIP The Center for Real Estate Entrepreneurship at George Mason University strives to advance real estate research and education in real estate development and finance. Working in partnership with leading real estate developers, professionals, and organizations in the Washington, D.C. area, the center develops relevant content for the business and academic communities. The center acts as a bridge between the Master of Science in Real Estate Development academic program and the real estate industry. It provides MS in Real Estate Development students with a forum for professional development and offers them unique opportunities to connect with the real estate development community. For more information about The Center for Real Estate Entrepreneurship please contact Robert Wulff, CREE Director and MS in Real Estate Development Director, at [email protected]. Or, visit us on the web at business.gmu.edu. The Center for Real Estate Entrepreneurship is within George Mason’s School of Business. Ranked by U.S. News & World Report in the top 15 percent of all AACSB accredited business schools, the School of Business is one of only 10 percent of business schools worldwide that is accredited in both business and accounting by the Association to Advance Collegiate Schools of Business (AACSB) International. Locations Fairfax Arlington Herndon Main Campus School of Business 4400 University Drive, MS 1B1 Enterprise Hall Fairfax, VA 22030 703.993.1880

DE LTA AS S OCIATES | G M U CEN T ER F O R R EAL EST A T E E N T R E PR E N E U R S H IP

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