2014 Housing Forecast – Grayson Glaze, Alabama Center For Real Estate

March 13, 2014 GBAHB 2014 Housing Forecast Seminar Grayson Glaze, CCIM, CPM ACRE Executive Director

Special Thanks to our Founding Partners Since 1996 -­‐ Formed by Alabama Legislative Act

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PROVIDE RELEVANT RESOURCES IN THE AREAS OF….

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v 5-­‐Year Window (‘09-­‐’13) v Annual Comparison (2013 vs 2012) v Month – Latest Data (February 2014) v Birmingham New Home Production v Housing Forecast v Economic Outlook v Potluck Thursday v Take Home ”Resources”

BIRMINGHAM

JANUARY 2011

v v v v v v

62 Total New Home Sales compared 425 in Jan ‘08 14.1 Month of Supply (8.3 ‘08) YOY Sales down 35% YOY Permits down 5% YOY Starts down 25% YOY Avg Sales Down 15%

v 2nd

to Last of 5 Metro Market

ROCK APARTMENT ADVISORS BIRMINGHAM,ALABAMA

In Memory – Marshall O’Neil Photo at 2010 ACRE/GBAHB VIP Party/Mike Wedgeowrh’s The Viridian

Count your Blessings…

YOU survived

7

ALABAMA SUPPLY – AVERAGE # LISTINGS

Inventory down only 15% since 2009 | Equilibrium = 21,580 units

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BIRMINGHAM SUPPLY – AVERAGE # LISTINGS Inventory down 27% since 2009 | Equilibrium = 6,000+/-­‐ units

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BHAM NEW HOME SUPPLY – AVERAGE # LISTINGS | Equilibrium = 500+/-­‐ units Inventory down 58% since 2009

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ALABAMA -­‐ TOTAL RESIDENTIAL SALES Still 27% from 2006 Peak of 59,222 @ 5% (last 3-­‐yr average) = YR 2020

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BIRMINGHAM -­‐ TOTAL RESIDENTIAL SALES Still down 37% from 2006 peak (18,805) | @ 7% (last 3-yr avg) = Yr 2021

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BIRMINGHAM -­‐ TOTAL NEW HOME SALES

Still down 61% from 2008 (3,635 units) & 30% from 2009 @ 13% (last 2-yr avg growth) = Yr 2021-2022 to reach 2008

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ALABAMA -­‐ DAYS ON MARKET BEFORE SOLD DOM still up 5% vs ‘09

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BIRMINGHAM - DAYS ON MARKET BEFORE SOLD is Goods News for Market DOM down 19% since 2009 | Trend

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ALABAMA -­‐ MEDIAN SALES PRICE Median Price UP 5.4% since 2011 bottom

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BIRMINGHAM -­‐ MEDIAN SALES PRICE Median Price UP 16% since 2011 (8% per year)

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BHAM NEW HOME -­‐ MEDIAN SALES PRICE

Median Price UP 26% since 2010 bottom (9% avg per year)

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BHAM NEW HOME -­‐ AVERAGE SALES PRICE

Average Price UP 24% since 2010 bottom (8% avg per year)

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ALABAMA -­‐ ANNUAL COMPARISON

2013 VS 2012 | 3rd Consecutive Yr of Sales Growth – 2% in’11, 6% in ‘12)

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BIRMINGHAM -­‐ ANNUAL COMPARISON

2011 was first positive sales growth @ 2% since 2006 2012 was also up 10% over 2011 -­‐ Trending in Right Direction

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BHAM NEW HOMES -­‐ ANNUAL COMPARISON 2012 was first positive sales growth @ 16% since 2006) Trending in Right Direction

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41% dn from Peak New Home Inventory = 705 units or 10% Supply Dn 4% from Feb 13 |

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Months of Supply: DOWN 5% from February 2013 | 45% down from Peak(Feb’10)

New Home I/S in February = 6.8 months

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Sales Up .5% from Feb 2013 | 42% down from Peak in Feb 2006

New Home Sales = 104 units or 14% of all sales vs 12% in Feb 2013

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YOY Monthly Comparison: DOM Unchanged from Feb 2013 | 6% Down from 3-­‐yr Avg (110)

No Bham DOM data for New Construction

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Prices UP 8.3% from Jan 2013 1-2% Avg. Annual Growth since 2004 | 6% off peak February 2006

New Home Median Price up 26% or $53,922

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BHAM TREND LINES RED

= NEW HOMES SOLD | GREEN= USED SOLD

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BHAM TREND LINES RED

= NEW HOMES LISTED | BLUE = NEW SOLD

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BHAM TREND LINES TOTAL

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SALES VOLUME BY $ (2006-2014)

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Bham New Home – Market Share

by Closed Transactions (last 12 months thru 2/2014) DR

HORTON 12% / SIGNATURE HOMES 7%

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BHAM TREND LINES AVERAGE

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PRICE – NEW HOMES BLUE

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Bham New Home – Market Share

by SALES PRICE (last 12 months thru 2/2014)

$200,000-299,000

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= 40% | $300,000-$399,000 = 30%

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NEW HOMES SUPPLY Building Permits still off 29% from 2008 Housing Starts still off 33% from 2008 2013 – Permits up 18% / Starts up 19% BHAM JANUARY PERMITS Down 20% | Start Dn 7%

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Missed by 1.5% or short by 218 units

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Sales Forecast = 41,799 units | Actual = 43,079 units

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Missed by: 3%

|

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Sales up 8.2% or 80 more units per month | NEW HOME 7-­‐12% RANGE

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Sales up 5% or 180 more units per month

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US HOUSING OUTLOOK Keyword:

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GRADUAL

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US HOUSING OUTLOOK Keyword:

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Progress

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US HOUSING OUTLOOK Keyword:

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GRADUAL

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US HOUSING OUTLOOK Keyword:

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PATIENCE

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US HOUSING OUTLOOK AL

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1.1% / US 2.09% (Dec ‘13)

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US HOUSING OUTLOOK AL

TYPICAL LAGS US BY 12-18 MOTNHS

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US HOUSING OUTLOOK Keyword:

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STABLE

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ROCK APARTMENT ADVISORS BIRMINGHAM,ALABAMA

Potluck

THURSDAY 52

TRULIA: RENT VS BUY In

100 markets – on average 38% cheaper to BUY Birmingham was 56% cheaper to BUY

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ALABAMA -­‐ MEDIAN SALES PRICE

Median Price Average Annual Appreciation since 1975 – 7% per year

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ALABAMA Multifamily OCCUPANCY

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RATE TRENDS

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US ECONOMIC OUTLOOK Keyword:

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EXPANSION

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STEADY

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FAVORABLE (Starts up 30% in’15, 10% in ’16)

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FAVORABLE

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Ground ZERO – Good News – 175,000

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EXCITING

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US HOUSING OUTLOOK THRU 2015 ARE

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