At the January 2019 CEOtoCEO Breakfast, Skylar Olsen of Zillow gave a thorough, and thoroughly entertaining, outlook for the economy in 2019 and beyond. Building upon her subject of expertise, housing, Skylar presented to the group the trends that have affected the local and national housing markets over the last decade and used them to make projections for the broader market over the coming decade.
Maybe surprising for some was the role that generational change is increasingly affecting the housing market and the economy as a whole. With millennials “coming of age” and beginning to buy houses en masse and baby boomers remaining hesitant to downsize until later in life, there is no shortage of uncertainty as to how these dynamics will play out over the years. Despite this uncertainty, Skylar consolidated her outlook into six predictions:
1. Mortgage affordability takes a hit (interest rate increases).
2. Rents reverse course (turn positive from their current downward trend).
3. Commutes get worse as first time homebuyers continue to move farther from major cities in pursuit of more affordable homes.
4. Amazon HQ “losers” see a boost. That is, those cities that sought to attract large-scale business development, even if they did not land HQ2, will see an increase in businesses looking to grow there.
5. Natural disasters claim a record number of homes.
6. Home value growth slows.