KCM Divided into Three Sections
Home Price Expectation Survey A nationwide panel of over one hundred economists, real estate experts and investment & market strategists.
Average Annual Appreciation 12.0% 10.0% 8.0% 7.9% 6.0% 4.7%
4.0%
4.7%
3.6% 2.0% 0.0% -2.0% -4.0% -5.8% -6.0% Pre-Bubble (1987-1999)
Bubble Bust Recovery to Date (Jan '00-May '07) (June '07-Oct '11) (Nov '11-June '13 )
Expectations (2013-2017)
Home Price Expectation Survey 7/2013
Home Price Expectation Survey Projected Percentage Increase
Home Price Expectation Survey 7/2013
Cumulative Appreciation by 2017
Home Price Expectation Survey 7/2013
Percentage Appreciation by Survey
Home Price Expectation Survey 7/2013
Distressed Property Numbers Diving
-14.4
%
Distressed inventories have fallen 14.4% so far this year
-28
%
National foreclosure inventory is down 28% from last year
-20
%
Completed foreclosures are down 20% from last year
-23.7
%
Seriously delinquent loans are down 23.7% from a year ago CoreLogic 7/2013
Foreclosure Inventory by State
CoreLogic 7/2013
What Housing
Bubble?
“Rising home prices have swept the country…However, these runaway price gains won’t last: both rising mortgage rates and slowly growing inventories should start tapping the brakes on home prices, preventing them from rising back into bubble territory.” Jed Kolko Trulia’s Chief Economist
Trulia 7/2013
RATE
Buyer’s Purchasing Power 6.00 $
1,079
$
1,109
$
1,139
$
1,169
$
1,199
5.75 $
1,050
$
1,080
$
1,109
$
1,138
$
1,167
5.50 $
1,022
$
1,050
$
1,079
$
1,107
$
1,136
5.25 $
994
$
1,022
$
1,049
$
1,077
$
1,104
5.00 $
966
$
993
$
1,020
$
1,047
$
1,074
4.75 $
939
$
965
$
991
$
1,017
$
1,043
4.50 $
912
$
937
$
963
$
988
$
1,013
$ 180,000 -10%
$ 185,000 -7.5%
$ 190,000 -5%
$ 195,000
$ 200,000
-2.5%
Principal and Interest Payments rounded to the nearest dollar amount.
RATE
Buyer’s Purchasing Power 6.00 $
2,158
$
2,218
$
2,278
$
2,338
$
2,398
5.75 $
2,100
$
2,160
$
2,218
$
2,276
$
2,334
5.50 $
2,044
$
2,100
$
2,158
$
2,214
$
2,272
5.25 $
1,988
$
2,044
$
2,098
$
2,154
$
2,208
5.00 $
1,932
$
1,986
$
2,040
$
2,094
$
2,148
4.75 $
1,878
$
1,930
$
1,982
$
2,034
$
2,086
4.50 $
1,824
$
1,874
$
1,926
$
1,976
$
2,026
$ 360,000 -10%
$ 370,000 -7.5%
$ 380,000 -5%
$ 390,000
$ 400,000
-2.5%
Principal and Interest Payments rounded to the nearest dollar amount.
RATE
Buyer’s Purchasing Power 6.00 $
3,237
$
3,328
$
3,417
$
3,507
$
3,597
5.75 $
3,151
$
3,239
$
3,326
$
3,414
$
3,501
5.50 $
3,066
$
3,151
$
3,236
$
3,322
$
3,407
5.25 $
2,982
$
3,065
$
3,148
$
3,230
$
3,313
5.00 $
2,899
$
2,979
$
3,060
$
3,140
$
3,221
4.75 $
2,817
$
2,895
$
2,973
$
3,052
$
3,130
4.50 $
2,736
$
2,812
$
2,888
$
2,964
$
3,040
$ 540,000 -10%
$ 555,000 -7.5%
$ 570,000 -5%
$ 585,000
$ 600,000
-2.5%
Principal and Interest Payments rounded to the nearest dollar amount.
RATE
Buyer’s Purchasing Power 6.00 $
4,317
$
4,437
$
4,557
$
4,676
$
4,796
5.75 $
4,201
$
4,318
$
4,435
$
4,552
$
4,669
5.50 $
4,088
$
4,202
$
4,315
$
4,429
$
4,542
5.25 $
3,976
$
4,086
$
4,197
$
4,307
$
4,418
5.00 $
3,865
$
3,972
$
4,080
$
4,187
$
4,295
4.75 $
3,756
$
3,860
$
3,965
$
4,069
$
4,173
4.50 $
3,648
$
3,749
$
3,851
$
3,952
$
4,053
$ 720,000 -10%
$ 740,000 -7.5%
$ 760,000 -5%
$ 780,000
$ 800,000
-2.5%
Principal and Interest Payments rounded to the nearest dollar amount.
RATE
Buyer’s Purchasing Power 6.00 $
5,396
$
5,546
$
5,696
$
5,846
$
5,996
5.75 $
5,252
$
5,398
$
5,544
$
5,690
$
5,836
5.50 $
5,110
$
5,252
$
5,394
$
5,536
$
5,678
5.25 $
4,970
$
5,108
$
5,246
$
5,384
$
5,522
5.00 $
4,831
$
4,966
$
5,100
$
5,234
$
5,368
4.75 $
4,695
$
4,825
$
4,956
$
5,086
$
5,216
4.50 $
4,560
$
4,687
$
4,814
$
4,940
$
5,067
$ 900,000 -10%
$ 925,000 -7.5%
$ 950,000 -5%
$ 975,000
$ 1,000,000
-2.5%
Principal and Interest Payments rounded to the nearest dollar amount.
Calculated Risk 7/2013
30 Year Fixed Rate Mortgage History 1/2012 – 7/2013
Federal Reserve 7/2013
Mortgage Rate Projections
Analyst
Projected Rate 3Q 2014
Fannie Mae
5.0%
National Assoc of Realtors
4.8%
Freddie Mac
5.1%
Mortgage Bankers Assoc
4.9% 7/2013
The Cost of Waiting a Year Date
Price
Interest Rate
Last Year
$400,000
3.5%
$1,796.18
This Year
$420,000
4.5%
$2,128.08
Difference in Payment
P&I
- $331.90
Mortgage Payment Differences Rate
$100,000
$200,000
$300,000 $400,000 $500,000
6.00
599.55
1,199.10
1,798.65
2,398.20
2,997.75
5.75
583.57
1,167.15
1,750.72
2,334.29
2,917.86
5.50
567.79
1,135.58
1,703.37
2,271.16
2,838.95
5.25
552.20
1,104.41
1,656.61
2,208.81
2,761.02
5.00
536.82
1,073.64
1,610.46
2,147.29
2,684.11
4.75
521.65
1,043.29
1,564.94
2,086.59
2,608.24
4.50
506.69
1,013.37
1,520.06
2,026.74
2,533.43
1983
1993
$2,812.47 $1,715.63 Monthly payment on a
2003
$1,471.66
$250,000 MORTGAGE (Principal & Interest)
2013
$1,266.71
Number of BUYERS out of 100 WILLING TO bid
OVER asking price
1-5%
6-10%
over asking price
over asking price
10+% over asking price
Trulia 7/2013
Migration Patterns www.forbes.com/special-report/2011/migration.html
Return on Investment 60
January 2000 – July 2013
56.1
41.7 30
20.9
0
-7.9 -30
Dow
S&P
NASDAQ
Real Estate MSN Money, Case Shiller 7/2013
Pending Home Sales 115
110
105 100 = Historically Healthy Level
100
95
90 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May June NAR 7/2013
Pending Home Sales 120 2013
2012
2011
110
January 2012 – December 2012
100 100 = Historically Healthy Level
90
80 Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
NAR 7/2013
Percentage of Distressed Property Sales 35% 35%
30%
25%
20%
15%
15%
10% Jan Feb Mar Apr May Jun
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
NAR 7/2013
Months 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
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
NAR 7/2013
S&P Case-Shiller Home Price Indices
S&P Case Shiller 7/2013