SEATTLE, Feb.17, 2016
/PRNewswire/ -- More than half of the experts surveyed in the
latest Zillow® Home Price Expectations (ZHPE) Survey said the
continued decline of undocumented immigration in the U.S. will
drive up construction labor costs.
The number of immigrants in the U.S. who entered the country
illegally has remained flat for more than five years, according to
data from Pew Hispanic Center. The undocumented Mexican immigrant
population in the United States,
in particular, is now 20 percent smaller than it was in 2007.
The quarterly ZHPE survey, sponsored by Zillow and conducted by
Pulsenomics LLCi, asked more than 100 housing experts
about their expectations for the housing market. Of those, 85
answered a question about how immigration might affect the housing
market.
Immigration is an ongoing national debate, and one that's sure
to be part of the 2016 presidential race. For that reason, Zillow
looked at how this issue would impact housing. Respondents said
they think fewer immigrants entering the country illegally will
translate to higher housing costs and more luxury home
construction.
- More than two-thirds of those surveyed said an immigration
slowdown would drive up construction labor costs.
- About 43 percent said a decline in the undocumented immigrant
population would result in more construction jobs for U.S.-born
workers and other foreign-born workers.
- Forty percent said that higher labor costs would, in turn,
cause builders to focus on high-end construction, which has a
higher profit margin.
- More than 30 percent of respondents tied immigration trends to
the lack of inventory, and predicted that the number of new homes
built will remain lower than historic norms.
"While housing policy hasn't been a big talking point thus far
in this election cycle, immigration policy certainly has, and
immigration plays a big role in housing," said Zillow Chief
Economist Dr. Svenja Gudell. "The
supply of homes for sale isn't keeping up with demand – especially
among entry-level homes that first-time buyers want. New-home
construction has been sluggish, and homes that are getting built
are aimed at a higher-end clientele. If builders hire relatively
more expensive U.S.-born workers, they may continue to focus on the
more profitable higher end of the market."
Single-family home construction has declined over the past
decade. More than half of the experts in the November ZHPE survey
said the decline in single-family construction can be attributed to
high labor costs and a lack of skilled workers.
Prices of newly constructed homes are at historic highs -- the
median price of new homes sold in December
2015 was almost 7 percent above the pre-recession peak of
$267,000 in March 2007.
Overall home price expectations are up from a quarter ago, with
survey respondents expecting 3.7 percent home value appreciation in
2016. Respondents expected 3.4 percent appreciation last
quarter.
"The outlook for 2016 home price appreciation is 3.7 percent,
less than the 4 percent value increase realized in 2015," said
Pulsenomics founder Terry Loebs,
noting that longer-term expectations for home values continue to
drift lower. "The five-year average annual rate of home value
appreciation expected by the panelists is stuck at 3.3 percent, its
lowest level since 2012. These subdued expectations are remarkable
in light of the improvement in headline unemployment numbers,
recent evidence of real income growth, stubbornly low home
inventory levels, and very low mortgage rates that seem unlikely to
spike anytime soon."
Outcome likely to
occur if undocumented immigration trends continue
|
Percentii
|
Construction labor
costs will go up.
|
67.1%
|
More U.S.-born or
legally authorized foreign-born workers will enter the residential
construction labor force.
|
43.5%
|
Home builders will
focus on higher end/higher margin homes that justify higher labor
costs.
|
40.0%
|
The number of new
homes built will remain lower than historic norms.
|
30.6%
|
Demand for rental
housing will diminish, and rent growth will moderate in the
communities that have historically attracted undocumented
immigrants.
|
20.0%
|
Construction labor
costs will go down.
|
10.6%
|
Other
|
4.7%
|
Broadly speaking,
demand for rental housing will diminish, and rent growth will
moderate.
|
2.4%
|
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, Zillow 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. Zillow also sponsors the bi-annual Zillow Housing Confidence
Index (ZHCI) which measures consumer confidence in local housing
markets, both currently and over time. 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.
About Pulsenomics:
Pulsenomics LLC
(www.pulsenomics.com) is an independent research and consulting
firm that specializes in data analytics, new product and index
development for institutional clients in the financial and real
estate arenas. Pulsenomics also designs and manages expert surveys
and consumer polls to identify trends and expectations that are
relevant to effective business management and monitoring economic
health. Pulsenomics LLC is the author of The Home Price
Expectations Survey™, The U.S. Housing Confidence Survey, and The
U.S. Housing Confidence Index. Pulsenomics®, The Housing
Confidence Index™, and The Housing Confidence Survey™ are
trademarks of Pulsenomics LLC.
i This edition of the Zillow® Home Price Expectations
Survey surveyed 104 experts between January
27 and February 9, 2016. The survey was conducted by
Pulsenomics LLC on behalf of Zillow, Inc.
ii The percent of 85 respondents who indicated each
outcome; the percentages do not sum to 100% because panelists were
asked to select as many as three outcome choices.
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SOURCE Zillow