SINGAPORE -�Media OutReach�-�27 November
2018�-� "U.S. housing market is far from heading towards a
housing bubble," forecasts Walton International Group ("Walton").� The U.S. housing market is built on a solid
foundation of sustainable and healthy growth and Walton predicts on-going
demand for this sector.�
�
Doug Donald, Senior
Vice President, Real Estate Acquisition and Disposition of Walton, said:
"Today's market is more disciplined -- driven by strong U.S. economic indicators
and job growth.� The U.S. demographics
and real estate trends will sustain ongoing positive market performance."
�
What Is Driving Today's Market?
The fundamental
drivers for land absorption are job creation, population growth, housing permit
issuance and housing affordability.�
These four highly correlated factors create a win-win scenario for
development.
�
The pro-business
environment in the U.S. has seen a number of diversified economic hubs emerge
which create clusters of job growth.� A
good example is Orlando (Florida).� It is
one of the fastest job growth centres compared with other large metropolitan
areas, growing around 4.3% annually from July 2017 to July 2018.
�
Other metropolitan
areas experiencing an average annual growth rate of over 3.1% are all located
in the Sunbelt region -- Atlanta (Georgia), Riverside (California) and Dallas
(Texas).
How does this regional performance impact the real estate market?
As population growth
through in-migration continues to increase in the Sunbelt region, from both
Millennials and Baby Boomers, a surging demand for the expansion of new
communities in the secondary cities and well-situated suburbs should dominate
the housing market into the next decade.
�
According to the
National Association of Homebuilders, compared with the end of June 2017, the
U.S.'s West saw the highest growth in single-family permits (+14.2%) while the
South 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 wide
housing production.
�
Why are supply-side challenges still occurring?
Home-builder
confidence is at its highest level since 1999, even higher than during the
housing bubble from 2004 to 2006.�
However, the current housing starts continue to lag behind the starts of
the previous cycle.
�
Stricter mortgage
qualifications and supply side challenges for builders have essentially created
a "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 are
pivotal in moving current housing starts beyond the levels reached previously.
�
After nearly a
decade of absorbing excess inventory, created from over building, home-builders
and home buyers are regaining their confidence as permits steadily rise and
return to 1.3 million per year, the long term historical average level.
�
Outlook for the U.S. housing market
The U.S. housing
market is benefiting from the country's exceptional economic performance, due
in part to President Donald Trump's 2018 tax reforms.� Many U.S. corporations are supportive of the
current federal government's pro-business, predictable regulatory environment
and job-creation mandate.
�
As a result, this
has created strong drivers in employment and population growth and this
combination is reflected in the demand for housing and the absorption of land
in the Sunbelt region in particular.�
Many political and economic factors indicate that long-term and
sustainable growth will continue in employment, population and housing numbers.
�
About Walton International Group
The
Walton Group of Companies is a multinational group of real estate investment
and development companies headquartered in Calgary, Alberta, Canada.� As one of North America's leading land-based
real estate investment and development firms, its expertise is in the research,
acquisition, management and development of strategically located land in major
growth corridors throughout Canada and the U.S.�
Walton currently manages over 107,000 acres, laying the foundation for
communities where people can live, work and play, and creating wealth for our
clients around the globe.� For more
information, please visit www.waltoninternational.com
