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Everyone is Now Saying It


Return on Investment January 2000 – April 2013

46.1

50

33.3 30

12.5 10

-10

-17.1 -30

Dow

S&P

NASDAQ

Real Estate MSN Money.com, Case Shiller


Pending Home Sales 110

105

100 = Historically Healthy Level

100

95

90 Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

NAR 3/2013


Pending Home Sales 110 2013

2012

100 = Historically Healthy Level

2011

January 2012 – December 2012

100

90

January 2011 – December 2011 80

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec NAR 3/2013


Future Price Projections Analyst

New

Previous

Bank of America

8%

4.7%

Capital Economics

8%

5%

Deutsche Bank

7%

2.5%

Freddie Mac

4.5%

2%

John Burns Consulting

9.1%

5.3%

J.P. Morgan

7%

3%

Morgan Stanley

7%

5%

NAR

7%

4%

Zelman & Associates

7%

5.5%

4.2%

2.9%

Zillow

Wall Street Journal 3/2013


S&P Case Shiller National Pricing Index 200

190 180 170 160 150 140 130

2006 – 2012

120 KCM 3/2013

Case Shiller


S&P Case Shiller National Pricing Index 200 180 160 140 120 100

80 60 40 20 0

KCM 3/2013

1987 – 2012 Case Shiller


S&P Case Shiller National Pricing Index 140

130

2010 – 2012 120

2010

KCM 3/2013

2010

2011

2011

2011

2011

2012

2012

2012

2012

Case Shiller


Home Price Expectation Survey


Projected Home Prices - 2013 Home Price Expectation Survey The nationwide panel of 118 economists, real estate experts and investment and market strategists expects home values to end 2013 up an average of 4.6 percent according to the first quarter Home Price Expectations Survey. Home Price Expectation Survey 3/2013


Average Annual Appreciation 12.0%

10.0% 8.0%

10.4%

6.0% 5.1%

4.0% 2.0%

3.6%

4.1%

0.0%

-2.0% -4.0% -6.0%

-5.8% Pre-Bubble (1987-1999)

Bubble Bust Recovery to Date (Jan '00-Apr '07) (May '07-Oct '11) (Nov '11-Jan '13 )

Expectations (2013-2017)

Home Price Expectation Survey 3/2013


Home Price Expectation Survey 6

5

Projected Percentage Increase 4.6

4.2

4

3.8

3.8

3.7

2015

2016

2017

3

2

1

0

2013

2014

Home Price Expectation Survey 3/2013


Cumulative Appreciation by 2017 40.0%

34.2% 30.0%

22.0%

22.0%

20.0%

11.7% 10.0%

0.0%

Pre-Bubble Trend

Bulls

All Projections

Bears

Home Price Expectation Survey 3/2013


Percentage Appreciation by Survey 6

3 Years Ago

2 Years Ago

1 Year Ago

Now

5.5 5

4.6

4.5 4

3.5 3

3.9

3.6

3.2

2.7

2.6

2.5

2 1.5

4.2

1.4

1 0.5 0 2013

2014 Home Price Expectation Survey 3/2013


S&P Case-Shiller Home Price Indices 10.0%

Year-over-Year Change in Prices

8.1%

8.0%

6.8% 5.5%

6.0%

3.6%

4.0%

2.0%

0.0%

Jan

Feb

Mar

Apr

May

0.6%

-0.5% Jun -2.0%

-2.5% -4.0%

-3.9%

1.1%

Jul

4.3%

2.0%

Aug

Sep

Oct

Nov

Dec

Jan

-1.7%

-3.5%

-6.0%

S&P Case Shiller 3/2013


S&P Case-Shiller Home Price Indices Metropolitan Area

Year-over-Year

Atlanta

13.4%

Boston

Metropolitan Area

Year-over-Year

Miami

10.8%

4%

Minneapolis

12.1%

Charlotte

6%

New York

.6%

Chicago

3.3%

Phoenix

23.2%

Cleveland

4.8%

Portland

8.3%

San Diego

9.8%

Dallas

7%

Denver

9.2%

San Francisco

17.5%

Detroit

13.8%

Seattle

8.7%

Las Vegas

15.3%

Tampa

8.9%

Los Angeles

12.1%

Washington

5.9% S&P Case Shiller 3/2013


Home Prices in the Short Term 150.00

2010-11 2011-12

PROJECTED?

2012-13

145.00

140.00

135.00

130.00

May

June

July

Aug

Sept

Oct

Nov

Dec

Jan

Feb

Mar

Apr

S&P Case Shiller 3/2013


30 Year Fixed Rate Mortgage History 4.25

1/2012 – 4/2013 4

3.75

3.5

3.25 Federal Reserve 4/2013


Mortgage Rates Moving Forward

The MBA projects 30 year mortgage rates will hit 4.3% by the end of the year‌

MBA 3/2013

and, they have already started to inch upward‌


Recent Rate Movement 3.65 3.6

30 Year Fixed Rate Mortgage

3.55 3.5 3.45 3.4 3.35

2013

3.3 1/3 Rate 3.34

1/10 3.4

1/17 3.38

1/24 3.42

1/31 3.53

2/7 3.53

2/14 3.53

2/21 3.56

2/28 3.51

3/7 3.52

3/14 3.63

3/21 3.53

3/28 3.57

4/4 3.54

Freddie Mac 4/2013


The Move-Up Seller

Price

Rate

P&I

2006

$400,000

6.5

$2,528.27

Today

$300,000

3.5

$1,347.13

Monthly Savings $1,181.14


The Move-Up Seller

Price Over 12 Months Over 30 Year Mortgage

P&I $14,173.68 $425,210.40


Opportunity Still Exists - For Now “Although buying a home is still cheaper than renting, the gap is closing. In 2013, home prices should rise faster than rents, and mortgage rates are likely to rise in the next year as the economy improves. …People who didn’t buy a home last year may have missed the bottom of the market, but they haven’t completely missed the boat. Buying remains cheaper than renting in all 100 large metros.” Jed Kolko, Trulia’s Chief Economist Trulia 3/2013


Month’s Inventory of Homes for Sale 10.0 9.0 8.0 7.0

6.0

5-6 Months = Normal Market Inventory

5.0 4.0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb

NAR 3/2013


Completed Foreclosures 200,000

160,000

120,000

80,000

40,000

0

4Q 2009

1Q 2010

2Q 2010

3Q 2010

4Q 2010

1Q 2011

2Q 2011

3Q 2011

4Q 2011

1Q 2012

2Q 2012

3Q 2012

4Q 2012

OCC Mortgage Metrics Report 3/2013


Foreclosures in Process 1,400,000

1,200,000

1,000,000

800,000

600,000

400,000

200,000

0

4Q 1Q 2Q 3Q 4Q 1Q 2009 2010 2010 2010 2010 2011

in millions

2Q 2011

3Q 2011

4Q 2011

1Q 2Q 3Q 4Q 2012 2012 2012 2012

OCC and OTS Mortgage Metrics Report 3/2013


Cheaper to Buy than Rent “Today’s it is 44% cheaper to buy versus rent. In fact, homeownership is cheaper than renting in all of America’s 100 largest metros. That’s because falling mortgage rates have kept buying almost as affordable, relative to renting, as it was last year.”

Trulia 3/2013


Cheaper to Buy than Rent

http://trends.truliablog.com/vis/rentvsbuy-winter-2013

Trulia 3/2013


Percentage of Distressed Property Sales 35%

35% 30%

25%

25% 20%

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

NAR 3/2013


Everyone is Now Saying It


Projected Home Prices - 2013 Bank of America “Home prices continue to show momentum amid shrinking inventory and record high affordability, prompting us to revise up our original forecast (4.7%) for home prices this year.

We now expect national home prices to increase 8% this year.� Bank of America 3/2013


Projected Home Prices - 2013 Capital Economics “Strong demand and tight inventory have brought existing home sales back to ‘normal’ levels, and further gains are possible… These conditions, combined with broader economic indicators, lead Capital Economics to revise its previous forecast of a 5 percent price gain this year up to 8 percent.”

DSNews 3/2013


Projected Home Prices - 2013 Morgan Stanley “Strong momentum in home prices as well as housing activity gave Morgan Stanley analysts enough confidence to upgrade their home price appreciation projections to roughly 7% (from 5%) for 2013.

HousingWire 3/2013


30 Year Fixed Rate Mortgage History 4.25

1/2012 – 4/2013 4

3.75

The Bottom? 3.5

3.25

Federal Reserve 4/2013


Recent Rate Movement 3.65

3.6

30 Year Fixed Rate Mortgage

3.55

3.5

3.45

3.4

3.35

This Year

3.3

Freddie Mac 4/2013


S&P Case-Shiller Home Price Indices Metropolitan Area

Year-over-Year

Atlanta

13.4%

Boston

Metropolitan Area

Year-over-Year

Miami

10.8%

4%

Minneapolis

12.1%

Charlotte

6%

New York

.6%

Chicago

3.3%

Phoenix

23.2%

Cleveland

4.8%

Portland

8.3%

San Diego

9.8%

Dallas

7%

Denver

9.2%

San Francisco

17.5%

Detroit

13.8%

Seattle

8.7%

Las Vegas

15.3%

Tampa

8.9%

Los Angeles

12.1%

Washington

5.9% S&P Case Shiller 3/2013


S&P Case-Shiller Home Price Indices Metropolitan Area

M-o-M

Atlanta

1.0%

Boston

Metropolitan Area

M-o-M

Miami

.8%

0%

Minneapolis

-.5%

Charlotte

.2%

New York

.1%

Chicago

-.9%

Phoenix

1.1%

Cleveland

-.5%

Portland

-.4%

Dallas

0%

San Diego

-.6%

Denver

0%

San Francisco

0.1%

Detroit

-.9%

Seattle

-.3%

Las Vegas

1.6%

Tampa

.9%

Los Angeles

.9%

Washington

-.7% S&P Case Shiller 3/2013


Resources Slide

Slide Title

Link

4,5

Pending Home Sales

http://www.realtor.org

6

Future Price Projections

http://blogs.wsj.com/economics/2013/03/27/home-prices-seen-making-stronger-gains-in-2013/

11,12, 13,14, 15

Projected Home Prices – 2013, Average Annual Appreciation, Home Price Expectation Survey, Cumulative Appreciation by 2017, Percentage Appreciation by Survey

https://www.pulsenomics.com/uploads/Q12013_ZHPES_Press_Release_Final.pdf

16,17, 18, 19, 20

S&P Case-Chiller Home Price Indices, Home Prices in the Short Term

http://www.standardandpoors.com/indices/articles/en/us/?articleType=PDF&assetID=1245349348126

21, 23

30 Year Fixed Rate Mortgage History, Recent Rate Movement

http://www.freddiemac.com/pmms

22

Mortgage Rates Moving Forward

http://www.marketwatch.com/story/mortgage-rates-will-rise-next-year-but-slowly-2012-10-24

26

Opportunity Still Exists – For Now

http://info.trulia.com/rentvsbuy-winter2013

27

Month’s Inventory of Homes for Sale

http://www.realtor.org

28,29

Completed Foreclosures, Foreclosures in Progress

http://www.occ.gov/publications/publications-by-type/other-publications-reports/mortgagemetrics-2012/mortgage-metrics-q2-2012.pdf

30,31

Cheaper to Buy than Rent

http://trends.truliablog.com/2013/03/rent-vs-buy-winter-2013

KEEPINGCURRENTMATTERS.COM


Resources Slide

Slide Title

Link

33

Percentage of Distressed Property Sales

http://www.realtor.org

36

Projected Home Prices - 2013

http://www.dsnews.com/articles/capital-economics-revises-home-price-forecast-upward2013-03-08

37

Projected Home Prices – 2013

http://www.housingwire.com/news/2013/03/20/housing-track-improve-hurdles-remainmorgan-stanley

38,39

30 Year Fixed Rate Mortgage History, Recent Rate Movement

http://www.freddiemac.com/pmms

40,41

S&P Case-Chiller Home Price Indices

http://www.standardandpoors.com/indices/articles/en/us/?articleType=PDF&assetID=1245 349348126

KEEPINGCURRENTMATTERS.COM


Real Estate Trends Report April 2013