Return on Investment
January 2000 – March 2013
MSN Money.com, Case Shiller
Pending Home Sales 110
105
100
95
90 Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
NAR 2/2013
Pending Home Sales 110
105 100 = Historically Healthy Level
100
January 2012 – January 2013
95
90
85
January 2011 – January 2012 80
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
NAR 2/2013
New Home
SALES January 2013 Sales +28.9%
+15.6%
Compared to December 2012
Compared to January 2012 Census 3/1/2013
“While gross domestic product is expected to be negatively impacted by all the uncertainty surrounding the nation's impending debt ceiling debate and the risk of sequestration, the housing sector is expected to continue its upward trajectory, the National Association for Business Economics (NABE) said.�
Political Uncertainty
Housing Wire 2/25/2013
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
NAR 2/2013
Month’s Inventory of Homes for Sale 10.0 9.0 8.0
7.0 6.0
2011 5-6 Months = Normal Market Inventory
5.0 4.0 3.0 2.0
2012
1.0 0.0
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
NAR 2/2013
Month’s Inventory of Homes for Sale 7.0
6.0
5-6 Months = Normal Market
5.0
4.0
3.0
< 4 Months = Sellers’ Market
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
NAR 2/2013
Calculated Risk 2/2013
New Home Inventory
Calculated Risk 2/2013
Months Supply & Impact on Price Months
Market
Pricing
1- 4
Sellers
Appreciation
5-6
Even
The Norm
7+
Buyers
Depreciation
FHFA Regional Home Prices (year-over-year)
FHFA 2012 1Q HPI Report
FHFA Regional Home Prices (year-over-year)
FHFA 2012 2Q HPI Report
FHFA Regional Home Prices (year-over-year)
FHFA 2012 3Q HPI Report
FHFA Regional Home Prices (year-over-year)
FHFA 2012 4Q HPI Report
1st Quarter
3rd Quarter
2nd Quarter
4th Quarter
FHFA State Home Prices (year-over-year)
FHFA 2/2013
S&P Case-Shiller Home Price Indices 8.0%
Year-over-Year Change in Prices
6.8% 5.5%
6.0%
3.6%
4.0%
2.0%
2.0%
0.0%
4.3%
Jan
Feb
Mar
Apr
May -0.5%
-2.0%
0.6%
Jun
1.1%
Jul
Aug
Sep
Oct
Nov
Dec
-1.7% -2.5%
-4.0%
-3.9%
-3.5%
-6.0%
S&P Case Shiller 2/2013
Year-over-Year Price Increases
Index
Increase
Case Shiller
6.8%
LPS
5.8%
CoreLogic
8.3%
FHFA (4th Quarter)
5.5%
S&P Case-Shiller Home Price Indices Metropolitan Area
Year-over-Year
Metropolitan Area
Year-over-Year
Atlanta
9.9%
Miami
10.6%
Boston
3.6%
Minneapolis
12.2%
Charlotte
5.3%
New York
-0.5
Chicago
2.2%
Phoenix
23.0%
Cleveland
2.9%
Portland
6.5%
Dallas
6.5%
San Diego
9.2%
Denver
8.5%
San Francisco
14.4%
Detroit
13.6%
Seattle
8.2%
Las Vegas
12.9%
Tampa
7.2%
Los Angeles
10.2%
Washington
5.9% S&P Case Shiller 2/2013
Home Prices in the Short Term 150.00
2010-11 2011-12 2012-13
145.00
PROJECTED?
140.00
135.00
130.00
May
June
July
Aug
Sept
Oct
Nov
Dec
Jan
Feb
S&P Case Shiller 2/2013
S&P Case-Shiller Home Price Indices Metropolitan Area
M-o-M
Metropolitan Area
M-o-M
Atlanta
0.3
Miami
0.8
Boston
0.1
Minneapolis
-0.1
Charlotte
-0.4
New York
-0.4
Chicago
-0.7
Phoenix
0.9
Cleveland
-0.1
Portland
-0.5
Dallas
-0.1
San Diego
0.4
Denver
-0.3
San Francisco
0.7
Detroit
-0.6
Seattle
-0.5
Las Vegas
1.8
Tampa
0.2
Los Angeles
1.1
Washington
-0.1 S&P Case Shiller 2/2013
30 Year Fixed Rate Mortgage History 5.25 5 4.75 4.5
2/2011 â&#x20AC;&#x201C; 3/2013
4.25 4 3.75 3.5 3.25 Federal Reserve 3/1/2013
Mortgage Rates Moving Forward â&#x20AC;&#x153;After reaching record lows in 2012, mortgage rates are expected to creep up slowly in 2013, the Mortgage Bankers Association (MBA)predicted.â&#x20AC;?
MarketWatch 10/24/2012
The MBA projects 30 year mortgage rates will hit 4.4% by the end of the year.
Mortgage Rates - 30 year fixed 3.6
12/01/2012 â&#x20AC;&#x201C; 3/1/2013 3.55
3.5
3.45
3.4
3.35
3.3
Freddie Mac 3/1/2013
Impact of Increasing Rates Price
Rate
P&I
200,000
3.4
886.96
200,000
4.4
1,001.52
Monthly
Savings
$114.56
Bernanke on Interest Rates â&#x20AC;&#x153;If, as the Federal Open Market Committee (FOMC) anticipates, the economic recovery continues at a moderate pace, with unemployment slowly declining and inflation expectations remaining near 2 percent, then long-term interest rates would be expected to rise gradually toward more normal levels over the next several yearsâ&#x20AC;Ś The precise timing and pace of the increase will depend importantly on how economic conditions develop, however, and is subject to considerable two-sided uncertainty.â&#x20AC;? Federal Reserve 3/1/2013
Housing America’s Future: New Directions for National Policy
“The report proposed a reformed system of housing finance in which the private sector plays a far more prominent role in bearing credit risk while promoting a greater diversity of funding sources available for mortgage financing. The problems we face in housing are so significant and so urgent today that inaction is no longer a viable option… It is therefore the commission’s hope that 2013 will be the year that Congress and the administration finally elevate housing to the top of the national policy agenda and give housing the dedicated attention it deserves.” Bipartisan Policy Center 3/1/2013
Percentage of Distressed Property Sales 35%
35% 30%
25%
23% 20%
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
NAR 2/2013
Shadow Inventory “Shadow inventory never hit full force, so now I think we’re at a point where the pendulum has swung completely the other way and the housing market needs more inventory, so 2013 would be a serendipitous time for banks to release that inventory.” Daren Blomquist, VP of RealtyTrac
He expects 600,000 REOs in 2013 and short sales to exceed the 2012 number, which will likely be around 1 million. DSNews 2/22/2013
FORECLOSURES
CNN Money 2013
100 hardest hit zips in 2012
CoreLogic 2/28/2013
Short Sales Moving Forward “Short sales don’t seem to be going away anytime soon...I think 2013 and 2014 are going to be all about the short sale.” Wingspan Portfolio Advisors CEO Steven Horne
“I think we’re going to set a new record for short sales in 2013.” Rick Sharga, EVP of Carrington Mortgage
HousingWire 2/21/2013
Resources Slide
Slide Title
Link
3,4,7,8, 9
Pending Home Sales, Monthâ&#x20AC;&#x2122;s Inventory of Homes for Sale
http://www.realtor.org
5
New Home Sales
http://www.census.gov/construction/nrs/pdf/newressales.pdf
6
Political Uncertainty
http://www.housingwire.com/news/2013/02/25/nabe-economic-uncertainties-remain-oneexception
10
Existing Home Inventory
www.calculatedriskblog.com
11
New Home Inventory
http://www.calculatedriskblog.com/2013/02/new-home-sales-at-437000-saar-injanuary.html
18
FHFA State Home Prices
http://www.fhfa.gov/webfiles/25010/2012Q4HPI.pdf
19,21, 23,24, 25
S&P Case Shiller Home Price Indices, Home Prices in the Short Term, Year Over Year Price Increases
http://www.standardandpoors.com/indices/articles/en/us/?articleType=PDF&assetID=12 45347994966
21
Year Over Year Price Increases
http://www.lpsvcs.com/Products/CapitalMarkets/PredictiveModeling/Pages/LPSHomePri ceIndex.aspx, http://www.lpsvcs.com/Products/CapitalMarkets/PredictiveModeling/ Pages/LPSHomePriceIndex.aspx
25, 27
30 Year Fixed Rate Mortgage History, Mortgage Rates
http://www.freddiemac.com/pmms
26, 28
Mortgage Rates Moving Forward, Impact of Increasing Rates
http://www.marketwatch.com/story/mortgage-rates-will-rise-next-year-but-slowly-201210-24
KEEPINGCURRENTMATTERS.COM
Resources Slide
Slide Title
Link
29
Bernake on Interest Rates
http://www.federalreserve.gov/newsevents/speech/bernanke20130301a.htm
30
Housing Americaâ&#x20AC;&#x2122;s Future
http://bipartisanpolicy.org/sites/default/files/BPC_Housing%20Report_web.pdf
31
Percentage of Distressed Property Sales
http://www.realtor.org
32
Shadow Inventory
http://www.dsnews.com/articles/lack-of-inventory-not-shadow-is-real-concern-2013-0222
33
Foreclosures
http://money.cnn.com/interactive/real-estate/foreclosure-rate/2013/
34
Largest Foreclosure Inventory
http://www.corelogic.com/research/foreclosure-report/national-foreclosure-reportjanuary-2013.pdf
35
Short Sales Moving Forward
http://www.housingwire.com/news/2013/02/21/mba-servicing-short-sales-stay-popularnext-two-years
39
Building Trust is Important
http://media.ford.com/images/10031/fordtrendbook2013.pdf
KEEPINGCURRENTMATTERS.COM