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SINGAPORE - Media OutReach - 27 November2018 - "U.S. housing market is far from heading towards ahousing bubble," forecasts Walton International Group ("Walton"). The U.S. housing market is built on a solidfoundation of sustainable and healthy growth and Walton predicts on-goingdemand for this sector.
Doug Donald, SeniorVice President, Real Estate Acquisition and Disposition of Walton, said:"Today's market is more disciplined -- driven by strong U.S. economic indicatorsand job growth. The U.S. demographicsand real estate trends will sustain ongoing positive market performance."
What Is Driving Today's Market?
The fundamentaldrivers for land absorption are job creation, population growth, housing permitissuance and housing affordability. These four highly correlated factors create a win-win scenario fordevelopment.
The pro-businessenvironment in the U.S. has seen a number of diversified economic hubs emergewhich create clusters of job growth. Agood example is Orlando (Florida). It isone of the fastest job growth centres compared with other large metropolitanareas, growing around 4.3% annually from July 2017 to July 2018.
Other metropolitanareas experiencing an average annual growth rate of over 3.1% are all locatedin the Sunbelt region -- Atlanta (Georgia), Riverside (California) and Dallas(Texas).
How does this regional performance impact the real estate market?
As population growththrough in-migration continues to increase in the Sunbelt region, from bothMillennials and Baby Boomers, a surging demand for the expansion of newcommunities in the secondary cities and well-situated suburbs should dominatethe housing market into the next decade.
According to theNational Association of Homebuilders, compared with the end of June 2017, theU.S.'s West saw the highest growth in single-family permits (+14.2%) while theSouth of the country had the highest growth in multi-family permits (+13.6%)across the country - all of which are boosting pent up demand for industry widehousing production.
Why are supply-side challenges still occurring?
Home-builderconfidence is at its highest level since 1999, even higher than during thehousing bubble from 2004 to 2006. However, the current housing starts continue to lag behind the starts ofthe previous cycle.
Stricter mortgagequalifications and supply side challenges for builders have essentially createda "missing middle" in the housing market. Qualifying potential home buyers for the"first and second time move up home" and solving the supply side challenges arepivotal in moving current housing starts beyond the levels reached previously.
After nearly adecade of absorbing excess inventory, created from over building, home-buildersand home buyers are regaining their confidence as permits steadily rise andreturn to 1.3 million per year, the long term historical average level.
Outlook for the U.S. housing market
The U.S. housingmarket is benefiting from the country's exceptional economic performance, duein part to President Donald Trump's 2018 tax reforms. Many U.S. corporations are supportive of thecurrent federal government's pro-business, predictable regulatory environmentand job-creation mandate.
As a result, thishas created strong drivers in employment and population growth and thiscombination is reflected in the demand for housing and the absorption of landin the Sunbelt region in particular. Many political and economic factors indicate that long-term andsustainable growth will continue in employment, population and housing numbers.
About Walton International Group
TheWalton Group of Companies is a multinational group of real estate investmentand development companies headquartered in Calgary, Alberta, Canada. As one of North America's leading land-basedreal estate investment and development firms, its expertise is in the research,acquisition, management and development of strategically located land in majorgrowth corridors throughout Canada and the U.S. Walton currently manages over 107,000 acres, laying the foundation forcommunities where people can live, work and play, and creating wealth for ourclients around the globe. For moreinformation, please visit www.waltoninternational.com