Housing Market Overview 2017 Q3...Comparing First-Time Buyers Now and Then (mid 1970s) 50 Negative...
Transcript of Housing Market Overview 2017 Q3...Comparing First-Time Buyers Now and Then (mid 1970s) 50 Negative...
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Housing Market Overview 2017 Q3Zillow Economic Research
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 1
About Zillow Economic Research ���������������������������������������������������������������������������������������������������� 4Zillow Economic Research ������������������������������������������������������������������������������������������������������������������ 5Zillow Group ���������������������������������������������������������������������������������������������������������������������������������������������� 8Home Values and Rents ������������������������������������������������������������������������������������������������������������������������ 9
Zillow Home Value Index ���������������������������������������������������������������������������������������������������������������������������������������������10
Zillow Home Value Index, Annual and Monthly Growth ����������������������������������������������������������������������������������� 11
Annual Home Value Growth ��������������������������������������������������������������������������������������������������������������������������������������� 12
Urban, Suburban and Rural Home Values ������������������������������������������������������������������������������������������������������������ 13
Zillow Home Value Forecast �������������������������������������������������������������������������������������������������������������������������������������� 14
Zillow Home Value Index, by Thirds ������������������������������������������������������������������������������������������������������������������������ 15
Annual Home Value Appreciation, by Thirds ������������������������������������������������������������������������������������������������������ 16
Zillow Rent Index ������������������������������������������������������������������������������������������������������������������������������������������������������������ 17
Annual Rent Appreciation ������������������������������������������������������������������������������������������������������������������������������������������ 18
Multifamily and Single-Family Home Rents ��������������������������������������������������������������������������������������������������������� 19
Urban, Suburban and Rural Rents ��������������������������������������������������������������������������������������������������������������������������20
Zillow Rent Forecast ����������������������������������������������������������������������������������������������������������������������������������������������������� 21
Rising Rents and Homelessness ������������������������������������������������������������������������������������������������������������������������������ 22
Mortgage and Rent Affordability ����������������������������������������������������������������������������������������������������23Zillow Mortgage and Rent Affordability ��������������������������������������������������������������������������������������������������������������� 24
Table of Contents
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 2
Mortgage Affordability in the Largest Metro Areas ����������������������������������������������������������������������������������������� 25
Zillow Mortgage Affordability, by Thirds �������������������������������������������������������������������������������������������������������������� 26
Household Income, by Thirds ����������������������������������������������������������������������������������������������������������������������������������� 27
Rent Affordability in the Largest Metro Areas ��������������������������������������������������������������������������������������������������� 28
Renters With No Savings ������������������������������������������������������������������������������������������������������������������������������������������� 29
Renter Renewal Savings ���������������������������������������������������������������������������������������������������������������������������������������������30
Renters Are Moving Less ��������������������������������������������������������������������������������������������������������������������������������������������� 31
Commute Distances ����������������������������������������������������������������������������������������������������������������������������������������������������� 32
Inventory, Construction and Demographics �������������������������������������������������������������������������������33Zillow For-Sale Inventory �������������������������������������������������������������������������������������������������������������������������������������������34
Zillow For-Sale Inventory, by Thirds ���������������������������������������������������������������������������������������������������������������������� 35
Days on Zillow ���������������������������������������������������������������������������������������������������������������������������������������������������������������� 36
New Homes Listed For Sale �������������������������������������������������������������������������������������������������������������������������������������� 37
Home Sales ���������������������������������������������������������������������������������������������������������������������������������������������������������������������� 38
New Residential Construction Permits ����������������������������������������������������������������������������������������������������������������� 39
Age of Sold Homes �������������������������������������������������������������������������������������������������������������������������������������������������������40
Fixer-Uppers �������������������������������������������������������������������������������������������������������������������������������������������������������������������� 41
New Construction Appreciation by Decade �������������������������������������������������������������������������������������������������������42
Repairs on New Construction Homes �������������������������������������������������������������������������������������������������������������������43
Home Sale Prices �����������������������������������������������������������������������������������������������������������������������������������������������������������44
Home and Lot Sizes �����������������������������������������������������������������������������������������������������������������������������������������������������45
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 3
Typical Buyer Profile ��������������������������������������������������������������������������������������������������������������������������������������������������� 46
Single-Family Residence Rentals ���������������������������������������������������������������������������������������������������������������������������� 47
Homeownership Views by Age �������������������������������������������������������������������������������������������������������������������������������� 48
Share of Millennials Living With Their Parents ��������������������������������������������������������������������������������������������������� 49
Comparing First-Time Buyers Now and Then (mid 1970s) ��������������������������������������������������������������������������� 50
Negative Equity, Foreign Investment and the Economy �������������������������������������������������������� 51Negative Equity ��������������������������������������������������������������������������������������������������������������������������������������������������������������52
Negative Equity, by Thirds ������������������������������������������������������������������������������������������������������������������������������������������53
Foreclosure Thirds �������������������������������������������������������������������������������������������������������������������������������������������������������� 54
Boomerang Buyers ��������������������������������������������������������������������������������������������������������������������������������������������������������55
U�S� Homeownership Rate ����������������������������������������������������������������������������������������������������������������������������������������� 56
Newly Formed Households ����������������������������������������������������������������������������������������������������������������������������������������57
U�S� Homeownership Rate, by Race ����������������������������������������������������������������������������������������������������������������������� 58
Experts: Foreign Investment ������������������������������������������������������������������������������������������������������������������������������������� 59
Top Markets for International Home Shoppers ��������������������������������������������������������������������������������������������������60
Exchange Rates �������������������������������������������������������������������������������������������������������������������������������������������������������������� 61
Experts: Impact of Foreign Investment ���������������������������������������������������������������������������������������������������������������� 62
Chinese Buyers ��������������������������������������������������������������������������������������������������������������������������������������������������������������� 63
Chinese and U�S� Real Estate ����������������������������������������������������������������������������������������������������������������������������������� 64
About Zillow �������������������������������������������������������������������������������������������������������������������������������������������65
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 4
About Zillow Economic Research
Real Estate Metrics• Zillow Home Value Index• Zillow Rent Index• Zillow Home Value Forecast• Zillow Rent Forecast• Negative Equity• For-Sale Inventory• Age of Inventory• List Prices• Sale Prices• Rental Prices• Home Sales• Home Value/Square Foot ($)• Price/Square Foot ($)• Listings with Price Cuts (%)• Median Price Cut (%)• Homes Sold for Loss/Gain (%)• Homes Foreclosed (out of 10k)• Foreclosure Re-sales (%)• Percent of Homes Increasing/Decreasing in Value• Homes Sold in the Past Year (%)• Cash Buyers• Price-to-Rent Ratios• Price-to-income Ratios• Mortgage and Rent Affordability• Buy-Rent Breakeven• Zillow Home Prices Expectations Survey• 15-minute Mortgage Rate Series:
Conventional/Jumbo• Existing Home Sales Forecast• New Home Sales Forecast• Case-Shiller Forecast
In-depth research and monthly reportswww�zillow�com/research
Data is available for download at:www�zillow�com/data
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 5
Zillow Economic Research
Dr� Svenja Gudell, Chief Economist @SvenjaGudell
Svenja joined Zillow in 2011 and leads the company’s industry-leading economic research team, a recognized voice of impartial, data-driven economic analysis on the U�S� housing market� Under Svenja’s leadership, Zillow produces monthly reports on housing trends for more than 450 metros nationwide, with data often available down to the ZIP-code level� In addition, Svenja and her team publish original research on various real estate topics, ranging from rental and mortgage affordability, negative equity and forecasting, to policy, generational and mortgage research� Svenja has presented to various federal agencies and at numerous industry conferences, and has been widely quoted in national and local media�
Prior to joining Zillow, Svenja did economic, financial and strategy consulting for Analysis Group and was an Assistant Economist in the Research Group of the Federal Reserve Bank of New York� Svenja has a Bachelor of Arts in economics from the University of Rochester, a Master of Arts in economics from New York University, a Master of Science in business administration from the University of Rochester, and a Ph�D� in finance from the University of Rochester� Contact Svenja at svenjag@zillow�com
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 6
Zillow Economic Research
Dr� Skylar Olsen, Senior Economist
Skylar joined Zillow in the summer of 2012� Her research is used by consumers, policy makers, and other researchers to understand the real estate markets and make better decisions� While authoring numerous research projects such as A House Divided – How Race Colors the Path to Homeownership, she also creates many of Zillow’s real estate metrics, including the Buyer-Seller Index and the Buy-Rent Breakeven Horizon� She holds a Ph�D� in Economics from the University of Washington and specializes in the spatial patterns of housing and demographic change�
Aaron Terrazas, Senior Economist@AaronTerraz
Aaron is a Senior Economist at Zillow where his research focuses primarily on mortgage and rental markets� Previously he was an economist at the United States Treasury Department’s Office of Economic Policy, and a policy analyst at the Migration Policy Institute in Washington, D�C� He received his bachelor’s degree in international relations from Georgetown University and his master’s degree in applied economics from Johns Hopkins University�
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 7
Zillow Economic Research
Sarah Mikhitarian, Economist
Sarah joined Zillow in October 2015, working on unveiling current real estate market conditions, interesting patterns in the housing market and past and future market trends� Prior to joining Zillow, Sarah worked at the Institute for Health Metrics and Evaluation, where she conducted research aimed at understanding and improving national and global health and evaluating the performance of health systems� She received her undergraduate degree in both economics and Hispanic studies from Scripps College, and was awarded a Master of Arts in economics with a specialization in applied microeconometrics from the University of Washington�
Alexander Casey, Policy Advisor
Alexander joined Zillow as a policy analyst in the summer of 2016� He works on the Economic Research team, using Zillow’s research to contribute to current public policy concerning housing and the overall economy� Alexander is involved with a variety of policy issues including housing assistance, land use, finance and transportation� Prior to joining Zillow, Alexander worked at the Minnesota Attorney General’s Office on consumer protection issues� Alexander holds an M�P�A� from the Evans School of Public Policy and Governance at the University of Washington, and a B�A� in Sociology from the University of Minnesota�
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 8
Zillow Group
Dr� Stan Humphries, Chief Analytics Officer@StanHumphries
Dr� Stan Humphries is the chief analytics officer of Zillow Group, a portfolio of the largest and most vibrant real estate and home-related brands on Web and mobile� Stan is the co-author of the New York Times Best Seller “Zillow Talk: Rewriting the Rules of Real Estate�”
As chief analytics officer, Stan oversees Zillow Group financial planning and analysis, corporate strategy, economic research, data science and engineering, marketing and business analytics, and pricing analytics� Stan was one of Zillow’s earliest pre-launch employees and is the creator of the Zestimate and its first algorithm�
Stan also serves as chief economist for Zillow Group� He has built out the industry-leading economics and analytics team at Zillow, a recognized voice of impartial, data-driven economic analysis on the U�S� housing market� Stan is a member of Fannie Mae’s Affordable Housing Advisory Council and the Commerce Department’s Data Advisory Council� Stan also serves on the Visiting Committee of the Department of Economics at the University of Washington�
Prior to joining Zillow, Stan spent five years at Expedia, where he ran the advanced analytics team� Before Expedia, Stan served as a researcher and faculty member at the University of Virginia, and was previously a Presidential Management Fellow where he served at NASA, the Office of Science and Technology Policy in the Executive Office of the President, and the Technology Administration within the Department of Commerce� Stan has also served in the United States Peace Corps, where he taught high school physics and chemistry in the West African country of Benin� Stan has a Bachelor of Arts from Davidson College, a Master of Science in foreign service from Georgetown University and a Ph�D� in government from the University of Virginia�
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 9
HOME VALUES AND RENTS
• U�S� home values are growing at a steady pace, and have surpassed pre-recession highs nationally and in a number of large markets� Driven largely by limited inventory and high demand, home values are growing fastest at the bottom end of the market�
• Regionally, markets in the Pacific Northwest, Texas, Florida and parts of the Southwest continue to outperform slower-moving markets in the Midwest and Mid-Atlantic�
• Growth in rents nationwide has largely flattened and cooled considerably� Pockets of strong rent appreciation remain in the Pacific Northwest and California�
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 10
1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
$100K
$110K
$120K
$130K
$140K
$150K
$160K
$170K
$180K
$190K
$200K
Zill
ow
Ho
me
Val
ue In
dex
$202,700April 2007$196,600
U�S� home values have surpassed pre-recession highs�
Source: Zillow Home Value Index (September 2017)�
+34.1% +6.9%Trough-to-Current Year-over-Year
Zillow Home Value Index
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 11
2001 2003 2005 2007 2009 2011 2013 2015 2017
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Yea
r-O
ver-
Yea
r C
hang
e in
ZH
VI
-0.8%
-0.6%
-0.4%
-0.2%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
Mo
nth-
Ove
r-M
ont
h C
hang
e in
ZH
VI
6.9%
0.4%
Annual Home Value Growth Monthly Home Value Growth
Annual U�S� home value appreciation has accelerated�
Source: Zillow Home Value Index (September 2017)�
Zillow Home Value Index, Annual and Monthly Growth
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 12
Washington, DC3.1%
Tampa, FL8.8%
Seattle, WA12.4%
San Diego, CA6.5%
Sacramento, CA8.1%
Pittsburgh, PA4.6%
Phoenix, AZ6.5%
Philadelphia, PA3.1%
Orlando, FL8.9%
New York, NY7.8%
Minneapolis, MN6.6%
Los Angeles, CA5.7%
Las Vegas, NV10.2%
Kansas City, MO6.7%
Houston, TX4.2%
Detroit, MI8.5%
Dallas, TX8.9%
Columbus, OH6.0%
Chicago, IL6.4%
Boston, MA7.0%
Austin, TX6.5%
St. Louis, MO1.4%San Francisco, CA
6.0%
San Antonio, TX7.3%
Portland, OR7.2%
Miami, FL7.1%
Denver, CO7.2% Cincinnati, OH
5.8%
Charlotte, NC9.0%
Atlanta, GA7.9%
1.4% 12.4%Annual Home Value Growth
Markets in the Pacific Northwest, Texas and Florida continue to outperform slower-moving markets in the Midwest and Mid-Atlantic�
Source: Zillow Home Value Index (September 2017)�
Annual Home Value Growth
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 13
1999 2004 2009 2014$80K
$100K
$120K
$140K
$160K
$180K
$200K
$220K
$240K
$260K
$280K
$300K
$320K
Zill
ow
Ho
me
Val
ue In
dex
$156,011
$231,647
$310,937
2000 2005 2010 2015
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
Ann
ual H
om
e V
alue
Ap
pre
ciat
ion
6.5%
5.9%
9.4%
Urban Suburban Rural
Urban homes are worth more than suburban homes and their values are growing at a faster pace�
Source: Zillow Home Value Index (September 2017)�
Urban, Suburban and Rural Home Values
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 14
Home value growth is expected to slow through 2018 Q2
Source: Zillow Home Value Forecast, Top 20 Metros (September 2017)�
Zillow Home Value Forecast
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 15
1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017$0K
$50K
$100K
$150K
$200K
$250K
$300K
$350K
Zill
ow
Ho
me
Val
ue In
dex
$357,500
$202,700
$117,700
Bottom Third Median Home Values Top Third
Zillow Home Value Index, by Thirds
Source: Zillow Home Value Index (September 2017)�
Year-over-Year % Change
8.9% 6.9% 4.0%Bottom Third Median Top Third
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 16
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
Ann
ual H
om
e V
alue
Gro
wth
4.0%
6.9%
8.9%
Bottom Third Median Home Values Top Third
Annual Home Value Appreciation, by Thirds
Source: Zillow Home Value Index (September 2017)�
Home value appreciation for bottom-third homes continues to outpace home value growth in other segments�
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 17
2011 2012 2013 2014 2015 2016 2017 2018$1,240
$1,260
$1,280
$1,300
$1,320
$1,340
$1,360
$1,380
$1,400
$1,420
$1,440
Zill
ow
Ren
t In
dex
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
Ann
ual R
ent
Gro
wth
1,430
2.1%
Annual Rent Growth Zillow Rent Index
Annual growth in rents picked up somewhat in the first half of 2017, but remains slow�
Source: Zillow Rent Index (September 2017)�
Zillow Rent Index
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 18
Washington, DC0.6%
Tampa, FL2.4%
Riverside, CA6.0%
Pittsburgh, PA-1.0%
Phoenix, AZ3.5%
Philadelphia, PA0.4%
Orlando, FL3.5%
New York, NY0.2%
Los Angeles, CA4.5%
Houston, TX-2.4%
Boston, MA2.3%
St. Louis, MO1.6%
Seattle, WA5.5%
San Francisco, CA-0.4%
San Diego, CA4.3%
San Antonio, TX1.1%
Portland, OR4.7% Minneapolis, MN
5.1%
Miami, FL-1.5%
Detroit, MI0.7%
Denver, CO1.5%
Dallas, TX3.0%
Chicago, IL0.9%
Charlotte, NC3.8%
Atlanta, GA4.3%
-2.4% 6.0%Annual Rent Growth
Rent is falling in several large markets nationwide�
Source: Zillow Rent Index (September 2017)�
Annual Rent Appreciation
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 19
2012 2014 2016 2018
$1,250
$1,300
$1,350
$1,400
$1,450
$1,500
$1,550
Zill
ow
Ren
t In
dex
$1,414
$1,559
2012 2013 2014 2015 2016 2017-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
Yo
Y 2.5%
1.4%
Multifamily Units Single-Family Homes
Rents for single-family homes and units in larger multifamily buildings share similar trends�
Source: Zillow Rent Index (September 2017)�
Multifamily and Single-Family Home Rents
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 20
2012 2014 2016 2018
$1,100
$1,200
$1,300
$1,400
$1,500
$1,600
$1,700
$1,800
Zill
ow
Ren
t In
dex
$1,181
$1,568
$1,843
2012 2013 2014 2015 2016 2017-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
Ann
ual R
ent
Ap
pre
ciat
ion
2.3%
0.3%
1.5%
Urban Suburban Rural
Rents in the city are higher than rents in the suburbs, but suburban rent is growing more quickly�
Source: Zillow Rent Index (September 2017)�
Urban, Suburban and Rural Rents
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 21
-1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0%Expected Rent Appreciation Through September 2018
Atlanta, GA
Riverside, CA
Seattle, WA
San Diego, CA
Los Angeles, CA
Phoenix, AZ
Minneapolis, MN
Tampa, FL
New York, NY
Dallas, TX
Miami, FL
Boston, MA
United States
San Francisco, CA
Detroit, MI
Chicago, IL
Baltimore, MD
Washington, DC
St. Louis, MO
Philadelphia, PA
Houston, TX -0.5%
0.4%
0.6%
6.0%
0.8%
0.3%
4.9%
4.8%
3.6%
6.2%
2.9%
8.7%
3.5%
2.5%
2.2%
1.0%
4.1%
1.4%
1.6%
3.1%
1.1%
Rental appreciation is expected to accelerate over the next year�
Source: Zillow Rent Forecast (September 2017)�
Zillow Rent Forecast
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 22
Rising rents contribute to rising homelessness� This connection is strongest in LA, New York, Seattle and DC�
Source: Zillow analysis of Homeless Population Counts�
Rising Rents and Homelessness
If Rents Increase:
Forecasted Increase in Homeless Population in:
Los Angeles New York Seattle Washington
1% 378 people 609 people 52 people 30 people
2% 773 1,196 103 78
3% 1,180 1,787 154 126
4% 1,584 2,383 206 174
5% 1,993 2,982 258 224
6% 2,402 3,586 311 272
7% 2,814 4,197 363 322
8% 3,230 4,811 416 372
9% 3,650 5,428 469 423
10% 4,072 6,048 523 474
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 23
MORTGAGE AND RENT AFFORDABILITY
• Overall, mortgage affordability – the share of income necessary to afford a typical mortgage payment – looks reasonable in most markets� But affordability is suffering, especially at the bottom end of the market, as home values rise and incomes fail to keep pace�
• As mortgage interest rates rise, mortgage affordability will also suffer, although there’s some headroom for rates to rise before this really becomes problematic�
• Unlike mortgage affordability, rental affordability is much worse today than it was historically, though the recent slowdown in rent growth has helped somewhat�
• Poor rent affordability is worrisome, as more money devoted to rent makes it more difficult to save for homeownership�
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 24
1988 1993 1998 2003 2008 2013 201812%
14%
16%
18%
20%
22%
24%
26%
28%
30%29.1%
15.4%
Average Share of Income Spent on Rent, 1985-2000
Average Share of Income Spent on Mortgage, 1985-2000
MortgageAffordability,1985-2000
MortgageAffordability, 2017
Q3Forecasted at 5% Forecasted at 6% Forecasted at 7% Rent Affordability,
1985-2000Rent Affordability,
2017 Q3
29%26%23%20%18%15%21%
Share of Income Spent on Housing
Nationwide, the share of income spent on a mortgage is well below historic norms�
Source: Zillow Mortgage Affordability, Zillow Rent Affordability (2017 Q3)�
Zillow Mortgage and Rent Affordability
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 25
Atl
anta
, GA
Bo
sto
n, M
A
Chi
cag
o, I
L
Den
ver,
CO
Ho
usto
n, T
X
Mia
mi,
FL
New
Yo
rk, N
Y
Po
rtla
nd, O
R
San
Fra
ncis
co, C
A
Sea
ttle
, WA
Uni
ted
Sta
tes
Was
hing
ton,
DC
0.0%
20.0%
40.0%
60.0%S
hare
of
Inco
me
Sp
ent
on
Mo
rtg
age
Median Aff Mortgage Affordability, 1985-2000 Forecasted at 5%
Source: Zillow Mortgage Affordability (2017 Q3)�
Share of Income Spent on Mortgage, 2017 Q2 13% 23% 14% 22% 13% 21% 26% 25% 41% 25% 15% 18%
Average Share of Incomes Spent on Mortgage, 1985-2000 19% 26% 23% 22% 15% 20% 30% 23% 38% 25% 21% 22%
Forecasted at 5% Rates 16% 27% 17% 26% 15% 25% 31% 29% 47% 28% 18% 21%
Forecasted at 6% Rates 17% 30% 19% 29% 17% 28% 35% 32% 53% 32% 20% 23%
Forecasted at 7% Rates 19% 34% 21% 33% 19% 31% 39% 36% 59% 35% 23% 26%
Mortgage Affordability in the Largest Metro Areas
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 26
Weak income growth and rapid appreciation, even with very low mortgage interest rates, means homes are becoming more unafforable, more quickly for bottom-third home buyers�
Source: Zillow Mortgage Affordability (2017 Q2)�
Zillow Mortgage Affordability, by Thirds
2000 2002 2004 2006 2008 2010 2012 2014 20160.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
11.1%
14.2%
23.0%
Bottom Third Middle Third Top Third
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 27
2000 2002 2004 2006 2008 2010 2012 2014 2016$0K
$20K
$40K
$60K
$80K
$100K
$120K
$140K
Ho
useh
old
Inco
me
$136,000
$57,098
$20,222
Bottom Third Middle Third Top Third
Income growth for the lowest earners has been especially weak�
Source: Zillow analysis of U�S� Census Bureau ACS data, IPUMS (2017 Q2)�
Nominal Income Growth,
2000-2016
50.5%Top Third
35.2%Middle Third
30.5%Bottom Third
Household Income, by Thirds
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 28
Atl
anta
, GA
Bal
tim
ore
, MD
Bo
sto
n, M
A
Chi
cag
o, I
L
Dal
las,
TX
Det
roit
, MI
Ho
usto
n, T
X
Los
Ang
eles
, CA
Mia
mi,
FL
Min
neap
olis
, MN
New
Yo
rk, N
Y
Phi
lad
elp
hia,
PA
Pho
enix
, AZ
Riv
ersi
de,
CA
San
Die
go
, CA
San
Fra
ncis
co, C
A
Sea
ttle
, WA
St.
Lo
uis,
MO
Tam
pa,
FL
Uni
ted
Sta
tes
Was
hing
ton,
DC
0%
10%
20%
30%
40%
50%S
hare
of
Inco
me
Sp
ent
on
Ren
t
Rent Affordability, 2017 Q3Average Rent Affordability, 1985-2000
Rent Affordability in the Largest Metro Areas
Source: Zillow Rent Affordability, Top 20 Metros (2017 Q3)�
Share of Income Spent on Rent, 2017 Q3 26% 27% 34% 30% 30% 25% 29% 48% 41% 27% 39% 27% 27% 37% 42% 42% 30% 23% 32% 29% 26%
Average Share of Income Spent on Rent, 1985-2000
19% 27% 26% 25% 22% 20% 24% 36% 29% 21% 26% 21% 23% 33% 35% 31% 24% 21% 28% 26% 18%
The share of income spent on rent is higher than the historic average in the nation’s 20 largest metros�
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 29
12.5% or less 12.6% to 19.4% 19.5% to 27.3% 27.3% to 45.3% 45.4% or more0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
Sha
re o
f R
ente
rs S
avin
g N
oth
ing
43.3%
33.6%
55.6%
38.3%
67.2%
Share of Income Spent on Rent
As the share of income spent on rent rises, more renters report saving nothing�
Source: Zillow analysis of data from the Federal Reserve Board, Survey of Household Economics and Decisionmaking 2015 and 2016, and the U�S� Census Bureau, ACS, IPUMS�
Renters With No Savings
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 30
$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000
AtlantaBaltimore
BostonCharlotteChicago
DallasDenverDetroit
HoustonLos Angeles
MiamiMinneapolis
New YorkPhiladelphia
PhoenixPittsburgh
PortlandRiverside
SacramentoSan Diego
San FranciscoSeattle
St. LouisTampa
United StatesWashington
Annual rent savings for renewing tenants after:2 years 3 years 4 years 5 years
Rising rents make renewing a better investment than moving
Source: Zillow analysis of U�S� Census Bureau American Community Survey, 2015, made available by the University of Minnesota, IPUMS-USA�
Renter Renewal Savings
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 31
1975 1980 1985 1990 1995 2000 2005 2010 20150%
10%
20%
30%
40%
50%
60%
70%
Sha
re o
f R
ente
rs W
ho M
ove
din
the
Pri
or
12 M
ont
hs
14.3%
18.9%
30.6%
48.6%
10.1%9.8%
15.9%
27.2%
44.3%
68.3%
College Age (18-23)Young Adult (24-34)
Middle Age (35-54)Retirement Age (55-69)
Elderly (70+)
Across all age groups, fewer renters are moving today than in prior decades�
Source: Zillow analysis of U�S� Bureau of Labor Statistics, Current Population Survey, 2016�
Renters Are Moving Less
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 32
Miami, FL Philadelphia, PA San Francisco, CA Seattle, WA
2006 2010 2014 2006 2010 2014 2006 2010 2014 2006 2010 20146.0
7.0
8.0
9.0
10.0
11.0
12.0
13.0
14.0
15.0
Med
ian
Co
mm
ute
Dis
tanc
e to
Do
wnt
ow
n C
ore
, Mile
s
12.6
13.3
7.8
9.5 9.1
10.5
15.4
11.9
Annual income $40K or more Annual income $15K or less
Lower-income workers with jobs in major downtown cores have steadily moved farther away from city centers, sacrificing distance for affordability�
Source: Zillow analysis of U�S� Census Bureau, Longitudinal Employer-Household Dynamics, Origin-Destination Employment Statistics, 2002-2014�
Commute Distances
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 33
INVENTORY, CONSTRUCTION AND DEMOGRAPHICS
• Inventory of homes for sale is very low, and getting lower� Inventory constraints are particularly acute among entry-level and median homes – the exact homes sought by first-time homebuyers and young families�
• New construction has thus far failed to get back to pre-recession levels, especially for single-family homes�
• A lack of inventory overall means those homes that are on the market are selling faster – currently, homes spend about a week less on the market before selling than they did a year ago�
• Millennials do value homeownership, but many are finding it difficult to attain, and more young adults are living with their parents�
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 34
2010 2011 2012 2013 2014 2015 2016 2017 20181200K
1300K
1400K
1500K
1600K
1700K
1800K
1900K
2000K
2100K
2200K
2300K
Fo
r-S
ale
Inve
nto
ry
1,245,888
The number of U�S� homes for sale is low, and falling�
Source: Zillow For-Sale Inventory (Seasonally Adjusted, Smoothed) (September 2017)�
-46.1% -12.3%Peak-to-Current Year-over-Year
Zillow For-Sale Inventory
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 35
2010 2011 2012 2013 2014 2015 2016 2017 20180K
100K
200K
300K
400K
500K
600K
700K
800K
900K
Sm
oo
thed
Sea
sona
lly A
dju
sted
Inve
nto
ry
290,135
563,268
249,318
Bottom Third Middle Third Top Third
Inventory shortages are particularly acute among bottom- and middle-third homes�
Source: Zillow For-Sale Inventory (Seasonally Adjusted, Smoothed) (September 2017)�
-19.5% -14.5% -7.6%Bottom Third Middle Third Top Third
Year-over-Year % Change
Zillow For-Sale Inventory, by Thirds
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 36
2012 2013 2014 2015 2016 20170K
100K
200K
300K
400K
500K
600K
700K
561,740
470,155
New Listing CountNew Listing Count (Trailing Twelve Month Average)
The number of listings hitting the market has remained consistent
Source: Zillow Listing Data (June 2017)�
New Homes Listed For Sale
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 37
2010 2011 2012 2013 2014 2015 2016 2017 201870
80
90
100
110
120
130
140
Day
s o
n Z
illo
w
77
Homes listed for sale are selling more quickly than in the past few years�
Source: Zillow Days on Zillow, Including REOs (September 2017)�
Days on Zillow
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 38
2000 2002 2004 2006 2008 2010 2012 2014 2016 20180.0M
1.0M
2.0M
3.0M
4.0M
5.0M
6.0M
7.0M
Exi
stin
g H
om
e S
ales
0K
200K
400K
600K
800K
1,000K
1,200K
1,400K
New
Ho
me
Sal
es
5.4M
635K
Existing Home Sales New Home Sales
Sales of new homes in particular have struggled to get back to pre-recession levels�
Source: National Association of Realtors Existing Home Sales: Single-Family & Condo & Co-op, U�S� Census Bureau New Residential Sales (September 2017)�
Home Sales
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 39
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 20180K
200K
400K
600K
800K
1,000K
1,200K
1,400K
1,600K
1,800K
New
Pri
vate
Ho
usin
g U
nits
Aut
hori
zed
by
Bui
ldin
gP
erm
its
(Sea
sona
lly A
dju
sted
Ann
ual R
ates
)
823K
367K
In structures with 1 unit In structures with 5+ units
Permits for new multifamily projects are near pre-recession levels, while single-family permits remain low�
Source: U�S� Census Bureau: New Residential Construction (September 2017)�
New Residential Construction Permits
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 40
2000 2002 2004 2006 2008 2010 2012 2014 20160
3
6
9
12
15
18
21
24
27
30
Med
ian
Ag
e o
f S
old
Ho
mes
2006: 15 years
2015: 28 years
The age of sold homes has almost doubled since the housing collapse, largely because of a lack of new construction�
Source: Zillow analysis of public record transactions, 2015�
Age of Sold Homes
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 41
-20 -15 -10 -5 0 5 10 15Difference in days on market between move-in ready homes and fixer uppers
Miami, FLAtlanta, GA
Dallas, TXOrlando, FL
Portland, ORRiverside, CA
Virginia Beach, VAJacksonville, FLKansas City, MO
Cleveland, OHHouston, TX
Los Angeles, CATampa, FL
New York, NYDetroit, MI
Seattle, WAUnited States
Boston, MAPittsburgh, PAProvidence, RIBaltimore, MD
Washington, DCPhiladelphia, PA
St. Louis, MOSan Antonio, TX
Chicago, IL-13
-21
-12-11
-4
10
-8
-3
-5-5
-2-2
-7
15
-1000
99
33
35
77
Metros where fixer-upperssold faster
Metros where fixer-upperssold slower
In many markets, fixer-uppers sold just as fast or faster than move-in ready homes�
Source: Zillow Listing and Transaction Data�
Fixer-Uppers
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 42
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006Year of Construction
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
Ave
rag
e A
nnua
l Ap
pre
ciat
ion
New construction built in 1997appreciated an average of 5.2%per year over the first ten yearsof existence.
New construction isappreciating fasterthan the existinghousing stock.
Existing Housing Stock New Construction
Newly constructed homes held their value better during the recession�
Source: Zillow analysis of home values (Zestimates) appreciation of new and existing homes over time�
New Construction Appreciation by Decade
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 43
1950s 1960s 1970s 1980s 1990s 2000s 2010s0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
55.0%
60.0%
% o
f H
om
ebuy
ers
Mak
ing
Maj
or
Rep
airs
43.4%
29.4%
33.9%
56.3%
24.2% 23.8%
39.1%Less than 1 in 4 buyersof recently built homes
paid for majorrenovations within thefirst year of owning.
Decade of Construction
Buyers of newly constructed homes also pay less in repairs after moving in�
Source: Zillow Group Consumer Housing Trends Report 2016�
Repairs on New Construction Homes
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 44
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018$0K
$50K
$100K
$150K
$200K
$250K
$300K
Exi
stin
g H
om
es $247,600
$328,500
Existing Homes New Homes
The price gap between newly built and existing homes is widening�
Source: National Association of Realtors and U�S� Census Bureau Construction Review (September 2017)�
Home Sale Prices
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 45
2000 2002 2004 2006 2008 2010 2012 2014 2016-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Per
cent
Cha
nge
in M
edia
n H
om
e S
ize
and
Med
ian
-13.1%
20.2%
Note: Centered 7-month moving average
Lot Square Feet Structure Square Feet
Since 1999, homes have gotten larger while lots have gotten smaller�
Source: Zillow analysis of U�S� Census Bureau: Survey of Construction microdata, 2000-2016�
Home and Lot Sizes
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 46
Typical Buyer Profile
Source: Zillow analysis of U�S� Census Bureau, American Community Survey, 2014, made available by the University of Minnesota, IPUMS-USA�
Existing Homes New Construction
$95KIncome
25 minutesTypical Commute Time
75.5% marriedMarital Status
46.1%Have At Least One Child
26.2%Millennial Share
$70KIncome
56.6% marriedMarital Status
40%Have At Least One Child
30%Millennial Share
20 minutesTypical Commute Time
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 47
1982 1987 1992 1997 2002 2007 2012 2017
13.0%
14.0%
15.0%
16.0%
17.0%
18.0%
19.0%
Sha
re o
f S
FR
s T
hat
Are
Ren
ted
18.9%
Renting single-family homes is increasingly popular�
Source: Zillow analysis of U�S� Census Bureau, Current Population Survey 2017, made available by University of Minnesota, IPUMS-USA�
Single-Family Residence Rentals
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 48
Owning a home increases yourstanding in the local community
Owning a home is a key to a highersocial status
Owning a home is necessary to liveThe American Dream
18-34 35-54 55+ 18-34 35-54 55+ 18-34 35-54 55+0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Sha
re o
f R
epo
nden
ts W
ho S
tro
ngly
Ag
ree
28.0%
33.0%
18.0%
32.0%
23.0%
13.0%
34.0%
29.0%
21.0%
Age Group
Millennials do have positive views of homeownership�
Source: Zillow Housing Aspirations Report�
Homeownership Views by Age
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 49
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
26.0%
27.0%
28.0%
29.0%
30.0%
31.0%
32.0%
33.0%
34.0%
Sha
re o
f Y
oun
g A
dul
ts L
ivin
g w
ith
The
ir P
aren
ts
33.9%
The share of millennials (age 18-34) living with their parents has increased sharply in the past decade�
Source: U�S� Census Bureau: Current Population Survey, March Supplement, 2016, made available by the University of Minnesota, IPUMS-USA�
Share of Millennials Living With Their Parents
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 50
1975-1979 2010-2013
32.5 years oldAverage age
$54KIncome in today’s dollars
2 people Household size
6 years Years renting before buying
$140KHome value in today’s dollars
29 years oldAverage age
2.6 people Household size
4.6 years Years renting before buying
$99KHome value in today’s dollars
$55KIncome in today’s dollars
Comparing First-Time Buyers Now and Then (mid 1970s)
Source: Zillow analysis of University of Michigan Panel Survey of Income Dynamics, 1970-2013�
Today’s first-time home buyer is more than three years older and typically rents longer before making the jump into homeownership compared to previous generations�
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 51
NEGATIVE EQUITY, FOREIGN INVESTMENT AND THE ECONOMY
• The U�S� negative equity rate has fallen consistently for four years, but more than 5 million homeowners remain trapped underwater� These homeowners are more likely to live in less expensive homes, contributing to inventory shortages�
• The homeownership rate is at multi-decade lows, as renters stay renting longer and would-be buyers find it difficult to enter the market�
• Foreign buyers of U�S� homes tend to focus on the higher end of the market, with some much more sensitive to currency fluctuations than others�
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 52
2011
Q2
2011
Q3
2011
Q4
2012
Q1
2012
Q2
2012
Q3
2012
Q4
2013
Q1
2013
Q2
2013
Q3
2013
Q4
2014
Q1
2014
Q2
2014
Q3
2014
Q4
2015
Q1
2015
Q2
2015
Q3
2015
Q4
2016
Q1
2016
Q2
2016
Q3
2016
Q4
2017
Q1
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
24.0%
26.0%
28.0%
30.0%
32.0%
Sha
re o
f H
om
es w
ith
a M
ort
gag
e in
Neg
ativ
e E
qui
ty
19.4%
21.0%18.8%
17.9%16.9%
16.9%
23.8%
31.4%31.1% 30.9%
30.6%
15.4%
30.0%
10.4%
25.4%
10.5%
14.4%
10.9%
13.4%
28.2%
13.1%12.1%
27.5%
12.7%
Negative equity has declined steadily since early 2012�
Source: Zillow Negative Equity (2017 Q1)�
Negative Equity
![Page 55: Housing Market Overview 2017 Q3...Comparing First-Time Buyers Now and Then (mid 1970s) 50 Negative Equity, Foreign Investment and the Economy 51](https://reader036.fdocuments.net/reader036/viewer/2022070807/5f057b437e708231d4132d74/html5/thumbnails/55.jpg)
ZILLOW HOUSING MARKET OVERVIEW | PAGE 53
0.0% 20.0% 40.0%Bottom Third
0.0% 20.0% 40.0%Middle Third
0.0% 20.0% 40.0%Top Third
United States
Atlanta, GA
Baltimore, MD
Boston, MA
Chicago, IL
Detroit, MI
Los Angeles, CA
Miami, FL
Minneapolis, MN
New York, NY
Philadelphia, PA
Phoenix, AZ
Riverside, CA
San Diego, CA
San Francisco, CA
Seattle, WA
St. Louis, MO
Tampa, FL
Washington, DC
36.4%
24.6%
27.0%
24.5%
26.5%
19.0%
17.0%
13.6%
18.5%
15.8%
13.7%
19.1%
9.4%
21.1%
9.8%
6.3%
7.8%
11.1%
8.1%
10.0%
10.9%
10.6%
13.0%
10.2%
14.8%
6.0%
11.5%
4.9%
8.6%
9.8%
6.3%
9.5%
9.2%
2.9%
7.9%
5.3%
6.1%
7.1%
6.9%
4.3%
3.4%
4.3%
8.8%
3.9%
6.2%
7.9%
7.6%
6.7%
5.8%
8.7%
5.3%
5.3%
5.2%
5.7%
4.1%
3.1%
1.5%
Negative equity is worst among bottom-third homes�
Source: Zillow Negative Equity by Tier (2017 Q1)�
Negative Equity, by Thirds
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 54
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Share of Foreclosures
United StatesNew York, NY
Los Angeles, CAChicago, IL
Dallas, TXPhiladelphia, PAWashington, DC
Miami, FLAtlanta, GABoston, MA
San Francisco, CA
Detroit, MIRiverside, CA
Phoenix, AZSeattle, WA
Minneapolis, MNSan Diego, CA
St. Louis, MOTampa, FL
Baltimore, MDDenver, CO
Pittsburgh, PA
60.0
44.0
30.0
40.3
48.4
46.9
20.8
20.8
30.3
34.9
34.6
49.3
42.9
46.7
38.4
39.6
45.5
36.8
38.6
43.235.9
56.2
38.3
33.8
55.8
28.5
55.3
35.2
37.2
37.7
44.1
14.6
41.9
46.1
16.6
16.9
16.6
45.1
45.1
41.5
15.4
14.7
39.1
13.9
15.6
12.9
12.6
16.7
17.6
51.8
18.7
13.3
31.3
31.5
35.1
13.5
31.5
12.3
17.3
13.7
51.7
57.1
51.7
51.7 13.1
11.5
Top-Third HomesMiddle-Third HomesBottom-Third Homes
Owners of the least expensive homes were hit hardest by the foreclosure crisis�
Source: Zillow Foreclosure Data (2015)�
Foreclosure Thirds
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 55
5 10 1500
10
20
30
40
50
60
70
80
Sha
re o
f B
orr
ow
ers
wit
h a
New
Mo
rtg
age
Years After Foreclosure Start
Subprime, 2000–06 foreclosure startPrime, 2000–06 foreclosure start Prime, 2007–10 foreclosure start
Subprime, 2007–10 foreclosure start
Homeownership rates for individuals foreclosed upon during the recession have been slower to recover than for those foreclosed upon before the recession�
Dharmasankar and Mazumder, Federal Reserve Bank of Chicago, 2016�
Boomerang Buyers
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 56
1967 1972 1977 1982 1987 1992 1997 2002 2007 2012 2017
63.0%
64.0%
65.0%
66.0%
67.0%
68.0%
69.0%
U.S
. Ho
meo
wne
rshi
p R
ate
63.9%
The U�S� homeownership rate is near historic lows�
Source: U�S� Census Bureau Homeownership Rate for the United States (2017 Q3)�
U�S� Homeownership Rate
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 57
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Cum
ulat
ive
Per
cent
Cha
nge
in t
he N
umb
er o
f H
ous
eho
lds
31.7%
24.8%
27.2%
% change total % change owner % change renter
Since 2005, newly formed households have tended to rent�
Source: Zillow analysis of U�S� Census Bureau CPS data 1995-2016, IPUMS�
Newly Formed Households
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 58
Asian or Pacific Islander Black Hispanic White, non-Hispanic0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
Ho
meo
wne
rshi
p R
ate
42.0%
72.5%
46.1%
57.1%
Blacks have the lowest homeownership rate�
Source: U�S� Census Bureau, Housing Vacancies and Homeownership (2017 Q3)�
U�S� Homeownership Rate, by Race
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 59
10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0%
Decrease marginally
Decrease substantially
Increase marginally
Increase substantially
Stay about the same
43.0%
32.0%
18.0%
4.0%
3.0%
Given prevailing economic and geopolitical conditions in the U.S. and abroad, which of the following choices bestreflects your expectations concerning foreign investment in the U.S. residential real estate market in the coming year?I expect foreign investment will:
Share of Panelists
A majority of experts polled by Zillow say foreign investment is unlikely to increase over the next year�
Source: Zillow Home Price Expectations Survey, 2017 Q2�
Experts: Foreign Investment
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 60
Canada China Europe Latin America
Buffalo, NY San Jose, CA Los Angeles, CA Miami, FL
Miami, FL San Francisco, CA San Francisco, CA Orlando, FL
Tampa, FL Seattle, WA San Jose, CA San Diego, CA
San Jose, CA Los Angeles, CA San Diego, CA Los Angeles, CA
Los Angeles, CA San Diego, CA Orlando, FL San Francisco, CA
Foreign buyers searching for homes in the United States tend to focus their search on warmer and/or coastal markets�
Source: Zillow search data�
Top Markets for International Home Shoppers
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 61
Japanese and Brazilian buyers have seen their purchasing power reduced the most over the past year, thanks to fluctuating exchange rates�
Source: Zillow Home Value Index and Foreign Currency Data (June 2016, June 2017)�
Exchange Rates
-2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0%U.S. Home Value Appreciation
Japanese Yen
Brazilian Real
British Pound
Chinese Yuan Renminbi
United States Dollar
Canadian Dollar
Mexican Peso
Euro
Russian Ruble -0.9%
17.5%
11.0%
5.0%
4.2%
7.4%
9.5%
9.5%
7.3%
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 62
In your opinion, what impact is the current level of foreign home purchase activity having, if any, on each of thefollowing factors within those markets experiencing above-average levels of foreign home buyer activity (i.e., SanFrancisco, Seattle, New York, Miami)?
10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%Share of Respondents
Home inventory
Home values (overall)
High-end home values
Mid-level home values
Entry-level home values
5.7% 3.4%
6.9%
9.2%
48.3%
22.1%
16.5%
19.5%
50.6%
42.5%
62.8%
61.2%
69.0%
36.8%
11.6%
15.3%
4.6%
3.4%
3.5%
7.1%
Major Impact Modest Impact No Impact Not Sure
Experts polled by Zillow said home purchase activity by foreign buyers is likely to have the most impact on high end home values, and a modest impact on overall inventory of homes for sale�
Source: Zillow Home Price Expectations Survey, (2017 Q2)�
Experts: Impact of Foreign Investment
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 63
0 10 20 30 40 50 60 70 80 90 100Target List Price Percentile
Boston, MA
Los Angeles, CA
New York, NY
San Francisco, CA
Seattle, WA
United States
American Home Shoppers Chinese Home Shoppers
The median American home shopper on Zillow in 2016 was looking at a home priced at the 57th percentile of homes for sale in a given metro market, while the median Chinese home shopper on Zillow was looking at a home priced at the 73rd percentile�
Source: Zillow Search Data�
Chinese Buyers
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 64
ShenzhenBeijing
ShanghaiSan Francisco, CA
Los Angeles, CAGuangzhou
San Diego, CANanjing
New York, NYTianjin
HangzhouWashington, DC
Seattle, WADenver, CO
QingdaoBaltimore, MD
Minneapolis, MNRiverside, CA
Miami, FLBoston, MA
WuhanChicago, IL
JinanPhiladelphia, PA
St. Louis, MOPhoenix, AZ
Tampa, FLDetroit, MI
$2,200
$6,448
$4,023$3,603
$4,888
$6,836
$3,462
$2,346
$2,979
$7,768
$3,367
$2,585
$3,327
$2,725
$1,740
$1,434
$1,688
$1,425
$1,678
$1,326
$1,878
$1,637
$1,975
$1,675
$2,162
$2,921
$1,819
$1,417
China United States
Notes: Chinese data are mean saleprice per square meter for existing
homes sold in July 2016. Yuanrenminbi values are converted to US
dollars using the average exchangerate prevailing in July 2016, about 6.67
RMB per USD. US data are mediansales price per square meter of all
homes -- new and existing -- sold inJuly 2016. Both series are not
seasonally adjusted.
Homes sold last July in China’s most expensive metros – Shenzhen, Beijing, and Shanghai – cost thousands of dollars more per square meter than homes sold in the priciest U�S� metro areas�
Source: Lianjia (China) and Zillow (US)�
Chinese and U�S� Real Estate
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ZILLOW HOUSING MARKET OVERVIEW | PAGE 65
About Zillow
Zillow® is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help� In addition, Zaillow operates an industry-leading economics and analytics bureau led by Zillow’s Chief Economist Dr� Svenja Gudell� Dr� Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research� Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years� Launched in 2006, Zillow is owned and operated by Zillow Group (NASDAQ: Z and ZG), and headquartered in Seattle�
Zillow is a registered trademark of Zillow, Inc�
Press Contact: press@zillow�com