Whalen

Defla%ng Housing Bubble Comments by Christopher Whalen to the Global Interdependence Center March 11, 2014 | Paris

Have US Home Prices Recovered?

• US home prices up 12% in last year na%onally to roughly 2004 levels aKer rising for 23 consecu%ve months since start of 2012 (CoreLogic) • Between 20-­‐30% of all US homes remain “under water,” crea%ng supply pressures that are pushing prices higher in most aUrac%ve markets • Mortgage lending volumes and loan applica%ons are severely depressed due to new regula%on, Basel III capital rules and other factors

0.00%

-­‐5.00%

-­‐10.00%

-­‐15.00%

-­‐20.00%

Source: CoreLogic 1-­‐Mar-­‐13

1-­‐Jan-­‐12

1-­‐Nov-­‐10

1-­‐Sep-­‐09

1-­‐Jul-­‐08

1-­‐May-­‐07

1-­‐Mar-­‐06

1-­‐Jan-­‐05

1-­‐Nov-­‐03

1-­‐Sep-­‐02

1-­‐Jul-­‐01

1-­‐May-­‐00

1-­‐Mar-­‐99

1-­‐Jan-­‐98

1-­‐Nov-­‐96

1-­‐Sep-­‐95

1-­‐Jul-­‐94

1-­‐May-­‐93

1-­‐Mar-­‐92

1-­‐Jan-­‐91

1-­‐Nov-­‐89

1-­‐Sep-­‐88

1-­‐Jul-­‐87

1-­‐May-­‐86

1-­‐Mar-­‐85

1-­‐Jan-­‐84

1-­‐Nov-­‐82

1-­‐Sep-­‐81

1-­‐Jul-­‐80

1-­‐May-­‐79

1-­‐Mar-­‐78

1-­‐Jan-­‐77

Home Price Apprecia%on (%)

25.00%

20.00%

15.00%

10.00%

5.00%

Source: FDIC 2013:Q4

2013:Q1

2012:Q2

2011:Q3

2010:Q4

2010:Q1

2009:Q2

2008:Q3

2007:Q4

2007:Q1

2006:Q2

2005:Q3

2004:Q4

2004:Q1

2003:Q2

2002:Q3

2001:Q4

2001:Q1

2000:Q2

1999:Q3

1998:Q4

1998:Q1

1997:Q2

1996:Q3

1995:Q4

1995:Q1

1994:Q2

1993:Q3

1992:Q4

1992:Q1

1991:Q2

1990:Q3

1-­‐4 Family Loans Held by Banks ($M) 3,500,000

3,000,000

2,500,000

2,000,000

1,500,000

1,000,000

500,000

0

1990:Q2 1990:Q4 1991:Q2 1991:Q4 1992:Q2 1992:Q4 1993:Q2 1993:Q4 1994:Q2 1994:Q4 1995:Q2 1995:Q4 1996:Q2 1996:Q4 1997:Q2 1997:Q4 1998:Q2 1998:Q4 1999:Q2 1999:Q4 2000:Q2 2000:Q4 2001:Q2 2001:Q4 2002:Q2 2002:Q4 2003:Q2 2003:Q4 2004:Q2 2004:Q4 2005:Q2 2005:Q4 2006:Q2 2006:Q4 2007:Q2 2007:Q4 2008:Q2 2008:Q4 2009:Q2 2009:Q4 2010:Q2 2010:Q4 2011:Q2 2011:Q4 2012:Q2 2012:Q4 2013:Q2 2013:Q4

Non-­‐Performing Loans ($M) 120,000

30-­‐89 days past due 100,000

90 days or more past due

In nonaccrual status

Source: FDIC 80,000

60,000

40,000

20,000

0

Contact Informa%on:

R.C. Whalen + 1 212-­‐644-­‐8969 (O) + 1 914-­‐645-­‐5304 (M) chris@rcwhalen.com www.rcwhalen.com