#1CoreLogic™ Housing Market Conditions: Benchmarking New Hampshire Ralph B. McLaughlin, PhD Deputy Chief Economist, CoreLogic October 10, 2019#2Presentation Outline Three Themes for Today's Presentation •National Housing Market Condition and Forecast •New Hampshire Housing Market Condition and Forecast •Housing Policy: Benchmarking New Hampshire to Other States CoreLogic Innovate. Transform. Thrive. T © 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. 2#3CoreLogic National Housing Market Conditions and Forecast#4Mortgage Rates Lower than A Year Ago but Expected to Rise Rates today at 3.6%, lowest since 2016 and 1% lower than one-year ago Interest Rate on 30-Year Fixed-Rate Mortgages 7% 6% 5% 4% Great Recession 3% 2008 2010 2012 Nov. 2018: 4.9% Sept. 2013: 4.5% تستستر Forecast Sep. 2020: 4.0% 2014 2016 2018 2020 Source: Freddie Mac Primary Mortgage Market Survey®; forecast is average of HIS Markit, MBA, Fannie Mae, Freddie Mac, NAHB and NAR. CoreLogic Innovate. Transform. Thrive. T © 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary.#5Origination Forecast: Up 17% on Strong Refis Purchase Originations Relatively Flat to 2018 Single-family Mortgage Originations (Billions of U.S. dollars) $2,400 $2,000 $1,600 $1,200 $800 $400 $0 2010 2012 2014 2016 Consensus 2018 to 2019: Total: +17% Refi: +51% ---Forecast--- Purch: +4% 2018 2020 Refinance Purchase CoreLogic Source: Originations for 2010-2018 are from CoreLogic public records (benchmarked to HMDA through 2017); 2019 to 2020 are an average of the latest projections released by Mortgage Bankers Association, Fannie Mae and Freddie Mac. Originations exclude HELOCs. Innovate. Transform. Thrive. T 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. 5#6Geographic Inversion Underway in Housing Market July 2019 Year-Over-Year Home Price Growth, Top vs Bottom Markets 12% 10% 8% 6% 4% 2% 0% -2% Boise Salt Lake Ogden Philadelphia Lakeland Colorado Springs CoreLogic Innovate. Transform. Thrive. T Gary Tacoma Tucson Phoenix U.S. Honolulu U.S. 3.6% Orange County Wilmington Hartford Albany Oakland Kenosha Source: CoreLogic House Price Index, not seasonally adjusted (September 3, 2019 release) 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. 1 Seattle Bridgepo San Jose 6#7Population Dynamics Look Good for US Housing Market Population and Household Growth Should Support Housing Through 2040 2010-2020 2020-2030 2030-2040 Millions 25 25 30 30 20 20 15 10 10 5 II. 0 Total Pop Under 35 65 and Over CoreLogic Source: University of Virginia Weldon Cooper Center, Demographics Research Group. (2018). National Population Projections Innovate. Transform. Thrive. T 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. 7#8Home Price Growth Increases for First Time in 16 Months July 2019 HPI at 3.6%, Forecast if July 2020 is 5.4% HPI YOY % Growth July 2020 Forecast 8% 7% 6% 5% 4% 3% 2% 1% 0% July 2019 3.6% July 2020 5.4% July 2014 September 2014 November 2014 January 2015 CoreLogic May 2015 July 2015 March 2015 September 2015 November 2015 January 2016 Innovate. Transform. Thrive. T May 2016 July 2016 September 2016 November 2016 January 2017 March 2017 May 2017 July 2017 September 2017 November 2017 January 2018 May 2018 July 2018 March 2016 March 2018 September 2018 November 2018 January 2019 Source: CoreLogic House Price Index, not seasonally adjusted (September 3, 2019 release) 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. March 2019 May 2019 July 2019 September 2019 November 2019 January 2020 March 2020 May 2020 July 2020 8#9CoreLogic Price Growth Strongest For Lowest-Priced Houses Cumulative Price Growth Through May 2019 (percent) Since May 2018 6% 5% 4% 3% 2% Since 2011 Trough 100% 80% 60% 40% 20% 1% 0% More Than 25% 25% or Less Below Median Below Median Up to 25% Above Median More Than 25% Above Median Price Growth Since: ■One Year Ago ■Price Trough Source: CoreLogic HPI, Single-family Detached (July 2, 2019 release); National HPI trough occurred March 2011. Innovate. Transform. Thrive. T 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. 9#104.0 3.5 3.0 Inventory Tighter for Entry-Level Buyers Months' Supply for Sale by Price Tier: Existing Homes I 2.5 I 2.0 CoreLogic I I Entry Level Supply 3.2 Months June 2019 50-75 75-100 100-125 125-150 150-175 175-200 Source: CoreLogic, June 2019 Price Tier (Percent of Median Price) Innovate. Transform. Thrive. T 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. 10#11U.S. Investor Homebuying Rates: 1999 - 2018 Investors Purchases are at 20 Year Highs 12% 11% 10% 9% 8% 7% 6% 5% 4% 1999 2000 2001 2002 2003 CoreLogic Innovate. Transform. Thrive. T 2004 2005 2006 2007 Source: CoreLogic Public Records and Author's Calculations 2008 2009 2010 2011 2012 © 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. 11 2013 2014 2015 2016 2017 2018#12% of Investor-Purchased Homes 80% U.S. Investor Homebuying Rates by Investor Size: 1999 - 2018 Mom-and-Pop Investor Activity on the Rise. - 1-10 Properties 11-100 Properties 101 + Properties 70% 60% 50% 40% 30% 20% 10% 0% 1999 2000 2001 2002 CoreLogic Innovate. Transform. Thrive. T 2003 2004 2005 2006 2007 Source: CoreLogic Public Records and Author's Calculations 2008 2009 2010 2011 2012 2013 © 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. 12 2014 2015 2016 2017 2018#13U.S. Investor Homebuying Rates: 1999 - 2018 Investors Focusing on Starter Homes 25% 20% 15% 10% 5% 0% 1999 Starter Homes Move-Up Homes -High End Homes 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: CoreLogic Public Records and Author's Calculations CoreLogic Innovate. Transform. Thrive. T 2014 2015 2016 2017 2018 © 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. 13#14Housing Markets with Most Investor Activity, 2018 Tend to be Highest in Eastern Half of U.S. Metro Investor Purchase Share Metro Investor Purchase Share Detroit, MI 27.0% Atlanta, GA 18.5% Philadelphia, PA 23.3% Des Moines, IA 17.2% Memphis, TN 19.7% Baltimore, MD 17.2% Long Island, NY 18.8% Camden, NJ 16.7% Oklahoma City, OK 18.7% Cleveland, OH 16.7% CoreLogic Innovate. Transform. Thrive. TM © 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. 14#15Housing Markets with Least Investor Activity, 2018 Tend to be Lowest in Western Half of U.S. Metro Investor Purchase Share Metro Investor Purchase Share Ventura, CA 4.8% Elgin, IL 5.4% Boise, ID 4.8% Frederick, MD 5.6% Oakland, CA 5.1% Stockton, CA 5.7% San Jose, CA 5.2% Worcester, MA 5.9% Sacramento, CA 5.3% El Paso, TX 5.9% CoreLogic Innovate. Transform. Thrive. TM © 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. 15#1635% 30% Metro Cap Rates Correlated with Investor Homebuying Annual Median Cap Rate vs. Annual Investor Homebuying Rates, 2012 - 2018 40% 25% % of Home Purchases by Investors CoreLogic 20% 15% 10% 5% 0% 0% 2% 4% 6% 8% Median Annual Cap Rate Source: CoreLogic Public Records, CoreLogic REAS, and Author's Calculations Innovate. Transform. Thrive. T © 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. 10% 12% 16#17Increase in Investor Activity Correlated with Tightening Markets. Markets with Growing Share of Investors Saw Relative Supply Fall 20% % Point Change in Market Velocity %01- -8% CoreLogic Innovate. Transform. Thrive. T -6% -4% 15% 10% 5% 0% -10% -15% -20% -25% -30% % Point Change in Investor Activity, 2012 - 2018 Source: CoreLogic Public Records, CoreLogic REAS, and Author's Calculations 6% 8% 10% 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. 17 12%#18Residential Investment in Manchester Trending Down % of Investors Buying Homes Lowest Since Great Recession 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% Jan-02 May-02 Sep-02 CoreLogic Jan-03 May-03 Sep-03 Jan-04 May-04 Sep-04 May-05 Sep-05 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-05 Jan-06 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Source: S&P CoreLogic Case-Shiller Indices, not seasonally adjusted (September 24, 2019 release) Innovate. Transform. Thrive. T 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 m M мати سا Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Jan-19 May-19 18#19CoreLogic New Hampshire Housing Market Conditions and Forecast#20CoreLogic -20% January 1977 January 1979 January 1981 -10% January 1983 January 1985 %0 January 1987 Innovate. Transform. Thrive. T January 1989 January 1991 10% January 1993 January 1995 20% January 1997 January 1999 30% January 2001 January 2003 Boston Housing Market is Smoothing Out CoreLogic House Price Index, Year-Over-Year Change January 2005 January 2007 Source: CoreLogic House Price Index, not seasonally adjusted (October 1, 2019 release) 20 © 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. 20 January 2009 January 2011 January 2013 January 2015 January 2017 January 2019 Boston ⚫ Zero-Line#21CoreLogic -20% January 1977 January 1979 January 1981 -10% January 1983 January 1985 0% January 1987 Innovate. Transform. Thrive. T January 1989 January 1991 10% January 1993 January 1995 20% January 1997 January 1999 January 2001 30% Manchester Housing Market is Smoothing Out CoreLogic House Price Index, Year-Over-Year Change January 2003 January 2005 January 2007 Source: CoreLogic House Price Index, not seasonally adjusted (October 1, 2019 release) © 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. Boston Manchester ⚫ Zero-Line January 2009 January 2011 January 2013 January 2015 January 2017 January 2019 21#22New Hampshire Housing Markets is Smoothing Out CoreLogic House Price Index, Year-Over-Year Change 30% 20% 10% 0% -10% -20% N.H. ⚫. Zero-Line January 1977 CoreLogic January 1979 January 1981 January 1983 January 1985 January 1987 Innovate. Transform. Thrive. T January 1989 January 1991 January 1993 January 1995 January 1997 January 1999 January 2001 January 2003 January 2005 January 2007 Boston Manchester Source: CoreLogic House Price Index, not seasonally adjusted (October 1, 2019 release) © 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. January 2009 January 2011 January 2013 January 2015 January 2017 January 2019 22 22#23Manchester/NH More Closely Follows National Trend CoreLogic House Price Index, Year-Over-Year Change 30% 20% 10% 0% -10% -20% N.H. U.S. ...... .. Zero-Line January 1977 CoreLogic January 1979 January 1981 January 1983 January 1985 January 1987 January 1989 January 1991 January 1993 January 1995 January 1997 January 1999 January 2001 January 2003 January 2005 ⚫Boston Manchester Source: CoreLogic House Price Index, not seasonally adjusted (October 1, 2019 release) Innovate. Transform. Thrive. T 23 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. 23 January 2007 January 2009 January 2011 January 2013 January 2015 January 2017 January 2019#240% 1% Oct-07 Feb-08 CoreLogic 2% 3% 4% Delinquency Rate at 12-Year Low % of Housing Stock with 90+ Delinquency 5% Jun-08 Oct-08 Feb-09 Jun-09 Oct-09 Feb-10 Jun-10 Oct-10 Feb-11 Jun-11 Oct-11 Feb-12 Jun-12 Oct-12 Feb-13 Jun-13 Oct-13 Feb-14 Jun-14 Oct-14 Feb-15 Jun-15 Oct-15 Source: CoreLogic Real Estate Analytics Suite, September 2019 Release Innovate. Transform. Thrive. T 24 © 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. 24 Feb-16 Jun-16 Oct-16 Feb-17 Jun-17 Oct-17 Feb-18 Jun-18 Oct-18 Feb-19 Jun-19#25CoreLogic Jan-02 May-02 Sep-02 Jan-03 May-03 Sep-03 Jan-04 May-08 Sep-08 Jan-09 May-09 1.0% ми AMA 0.0% -1.0% -2.0% -3.0% -4.0% -5.0% May-04 Sep-04 Jan-05 May-05 Sep-05 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-06 Jan-08 4.0% 3.0% 2.0% Sep-09 Jan-10 Innovate. Transform. Thrive. T Source: Bureau of Labor Statistics, September 2019 Release © 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. Manchester Job Growth Stable % Year-Over-Year Job Growth, Manchester Metro May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 m Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 или Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Jan-19 May-19 25 25#26Manchester Wage Growth Booming % of Year-Over-Year Change in Average Wage 13.0% 8.0% 3.0% -2.0% my -7.0% May-08 Jan-08 Sep-08 CoreLogic Jan-09 May-09 Sep-09 Jan-10 May-10 May-11 Sep-10 Jan-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Innovate. Transform. Thrive. T Source: Bureau of Labor Statistics, September 2019 Release © 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 May-16 May-17 Sep-17 Jan-16 Sep-16 Jan-17 Jan-18 May-18 Sep-18 Jan-19 May-19 26 26#270.5% 0.4% 0.3% 0.2% 0.1% 0.0% Oct-08 Feb-09 CoreLogic Jun-09 Oct-09 Feb-10 Turnover Rate Rising in Manchester % of Housing Stock Changing Hands, 12-Month Rolling Average 0.6% Jun-10 Oct-10 Feb-11 Jun-11 Oct-11 Feb-12 Jun-12 Oct-12 Feb-13 Jun-13 Feb-14 Oct-13 Jun-14 Oct-14 Feb-15 Jun-15 Oct-15 Feb-16 Jun-16 Innovate. Transform. Thrive. T Source: CoreLogic Real Estate Analytics Suite, September 2019 Release © 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. Oct-16 Feb-17 Jun-17 Oct-17 Feb-18 Jun-18 Oct-18 Feb-19 Jun-19 27#2816.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Sep-09 Jan-10 CoreLogic May-10 Sep-10 Jan-11 Negative Equity at 10-Year Lows in Manchester % of Housing Stock With Home Values Lower than Mortgage Debt 18.0% May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Source: CoreLogic Real Estate Analytics Suite, September 2019 Release Innovate. Transform. Thrive. T © 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. 28 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Jan-19 May-19#29Forecasted Population Growth in New England, 2010 - 2040 Massachusetts, New Hampshire Only New England States to See Growth 2010-2020 2020-2030 2030-2040 Thousands 320 270 220 170 120 70 20 Connecticut -30 Maine Massachusetts New Hampshire Rhode Island Vermont CoreLogic Source: University of Virginia Weldon Cooper Center, Demographics Research Group. (2018). National Population Projections Innovate. Transform. Thrive. T 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. 29#309% 8% 7% %9 5% 4% CoreLogic Forecast: Home Price Growth to Pick Up through 2022 CoreLogic House Price Index Forecast, Year-Over-Year Change August 2018 October 2018 December 2018 February 2019 April 2019 June 2019 Innovate. Transform. Thrive. T August 2019 October 2019 December 2019 February 2020 April 2020 June 2020 August 2020 October 2020 December 2020 February 2021 April 2021 June 2021 Manchester Forecast Source: CoreLogic House Price Index Forecast, not seasonally adjusted (October 1, 2019 release) 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. August 2021 October 2021 December 2021 February 2022 April 2022 June 2022 August 2022 30 30#31Under 35 Population Growth in New England, 2010 - 2040 Massachusetts Only NE State to See Growth Between 2020 and 2040 2010-2020 2020-2030 2030-2040 Thousands 210 160 110 60 10 Connecticut Maine -40 Massachusetts New Hampshire Rhoc ana emont CoreLogic Source: University of Virginia Weldon Cooper Center, Demographics Research Group. (2018). National Population Projections Innovate. Transform. Thrive. T © 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. 31#32CoreLogic Benchmarking New Hampshire Housing Policies to the Nation 32#33A Perspective on How Some States Manage Housing Supply . . - - - Single-family zoning is sacrosanct. Focus is on preserving the “character” of communities. Market-rate housing densities not welcomed. New housing supply slower to respond to demand -> shortage When there's a shortage of bread, tax the baker. - Enact mandatory exclusionary zoning. • - Hope LIHTC and density bonuses cover required additional cost imposed on developer. Enact rent control Hope there isn't disinvestment in rental housing Put pressure on state housing agencies to make housing more affordable Increase demand by making borrowing cheaper CoreLogic Innovate. Transform. Thrive. T © 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. 33 33#34How New Hampshire Squares Up . Single-family zoning isn't sacrosanct. 19 of 234 communities have no formal zoning • - ADUS (Granny Flats, Casitas, etc) in 194 of 234 communities are "by-right." Taxing the baker is illegal in NH unless bonuses/subsidies given to developer - Bonuses aren't just provided for builders of workforce housing. Also included for: • Open space Senior housing ■ Rental housing Takes pressure off state housing agencies to make housing more affordable - Allows for more innovation, such as ■ Rehab loans Manufactured housing loans CoreLogic Innovate. Transform. Thrive. T © 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. 34 4#35CoreLogic Thank You 35 55#36CoreLogic Where to find more information Look for regular updates to our housing forecast, commentary and data at http://www.corelogic.com/blog @CoreLogicInc @HousingRalph The views, opinions, forecasts and estimates herein are those of the CoreLogic Office of the Chief Economist, are subject to change without notice and do not necessarily reflect the position of CoreLogic or its management. The Office of the Chief Economist makes every effort to provide accurate and reliable information, however, it does not guarantee accuracy, completeness, timeliness or suitability for any particular purpose. CORELOGIC and the CoreLogic logo are trademarks of CoreLogic, Inc. and/or its subsidiaries. Innovate. Transform. Thrive. T © 2019 CoreLogic, Inc. NYSE:CLGX] All Rights Reserved. Proprietary. 36