Real Estate Trends Report July 2013

Page 1


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 NAR 6/2013


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 6/2013


6200

6000

Home Sales in thousands

5800

5600

5400

5200

Actual

Projected

5000 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 NAR 6/2013


Year-Over-Year Sales by Price Point Region

$0-100K

$100250K

$250500K

$500750K

$750K-1M

$1M+

$269,600

Northeast

-2.7%

3.8%

17.6%

23.9%

36.3%

24.8%

$159,800

Midwest

1.5%

19.7%

35.7%

36.2%

53.8%

48%

$183,300

South

-6.3%

23.2%

36.5%

34.2%

40.6%

24.9%

$276,400

West

-47%

.5%

23.6%

38.1%

63.9%

49.8%

$208,000

U.S.

-9.3%

14.3%

28.2%

32.8%

49.8%

36.9%

Median

WEST

MIDWEST

NORTHEAST

SOUTH NAR 6/2013


Median Days on Market by Type

NAR, RCI Survey 6/2013


Price Changes as per Case Shiller Last 12 Months

Since Peak

30 20 10 0 -10 -20 -30 -40 -50 -60

Case Chiller


Are Properties Overvalued? “Inventories of existing homes are as low as they were in 2000. New-home inventories have barely budged from a 50-year low. As a consequence, there are only 5 months of inventory for existing homes and 4 months for new homes, compared with 6 months when market conditions are normal… Moreover, housing is at least fairly valued, if not undervalued. The boom and bust in housing left house price gains far behind income and rent gains.” Celia Chen Senior Director of the Moody's Analytics Research Staff Moody’s Economy


Gains as Measured Between the First Quarters of 2004 and 2013 30%

25%

28%

26%

20%

15%

10%

5%

0%

0%

Income

Rent

House Prices Moody’s Economy


http://www.economist.com/blogs/graphicdetail/2013/06/us-house-prices


Where are mortgage rates headed?


Mortgage Rate Projections

Analyst

Projected Rate 3Q 2014

Mortgage Bankers Assoc

4.6%

Fannie Mae

4.6%

National Assoc of Realtors

4.8%

Freddie Mac

4.6%

7/2013


30 Year Fixed Rate Mortgage History 1/2012 – 7/2013

Federal Reserve 7/2013


The Cost of Waiting a Year Date

Price

Interest Rate

Last Year

$200,000

3.5%

$898.09

This Year

$220,000

4.5%

$1,114.71

Difference in Payment

P&I

- $216.62


Over 12 Months Over 30 Year Mortgage

- $2,599.44 - $77,983.20


Recent Rate Movement 4.75

4.5

4.25

30 Year Fixed Rate Mortgage 4

3.75

3.5

3.25

3 1/3 1/10 1/17 1/24 1/31 2/7 2/14 2/21 2/28 3/7 3/14 3/21 3/28 4/4 4/11 4/18 4/25 Rate 3.34 3.4 3.38 3.42 3.53 3.53 3.53 3.56 3.51 3.52 3.63 3.53 3.57 3.54 3.43 3.41 3.4

5/2 5/9 5/16 5/23 5/30 6/6 6/13 6/20 6/27 3.35 3.42 3.51 3.59 3.81 3.91 3.98 4.1 4.6


“I don’t think the Fed ultimately would be troubled with a 6.5% mortgage rate.” Doug Duncan Chief Economist for Fannie Mae

Inman News


"As the economy continues to improve, we expect to see continued upward movement in long-term interest rates… At today’s house prices and income levels, mortgage rates would have to be nearly 7 percent before the U.S. median priced home would be unaffordable to a family making the median income in most parts of the country.” Frank Nothaft Freddie Mac VP and Chief Economist

Freddie Mac


Mortgage Amount 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


Percentage of Distressed Property Sales 35% 35%

30%

25%

18% 20%

15% Jan Feb Mar

Apr May Jun

Jul

Aug Sep

Oct Nov Dec Jan Feb Mar

Apr May NAR 6/2013


Breakdown of Today’s Purchasers 50.0%

43.8% 40.0%

36%

30.0%

20.2% 20.0%

10.0%

0.0%

Current Homeowners

First Time Buyers

Investors

Campbell/Inside Mortgage Finance HousingPulse Tracking Survey 6/2013


Agents Who Specialize‌ in a small geographic area compared to agents who list homes in a large area:

1. Were 4% more likely to sell the home 2. Sell homes for 1.21% more 3. Sell homes above the median price for 1.71% more 4. Sell the home in 5.5 fewer days WSJ 6/2013


Return on Investment 60

January 2000 – July 2013

52.4

37.1 30

16

0

-12.8 -30

Dow

S&P

NASDAQ

Real Estate MSN Money.com, Case Shiller


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 6/2013


S&P Case-Shiller Home Price Indices 14.0%

Year-over-Year Change in Prices

12.1%

12.0%

10.2% 10.0%

9.3% 8.1%

8.0%

6.8% 5.5%

6.0%

4.3% 3.6%

4.0%

2.0%

2.0% Jan

Feb

Mar

Apr

May

0.6%

1.1%

0.0%

-0.5% -2.0%

-1.7% -2.5%

-4.0%

-6.0%

-3.9%

-3.5%

S&P Case Shiller 6/2013

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr


S&P Case-Shiller Home Price Indices Metropolitan Area

Year-over-Year

Metropolitan Area

Year-over-Year

Atlanta

20.8%

Miami

13.0%

Boston

8.1%

Minneapolis

14.8%

Charlotte

7.3%

New York

3.2%

Chicago

9.3%

Phoenix

21.5%

Cleveland

4.8%

Portland

12.9%

Dallas

7.4%

San Diego

14.7%

Denver

9.9%

San Francisco

23.9%

Detroit

19.8%

Seattle

11.4%

Las Vegas

22.3%

Tampa

11.3%

Los Angeles

18.8%

Washington

7.2% S&P Case Shiller 5/2013


%

HOME MORTGAGE INTEREST RATES (30 YEAR FIXED)

HISTORICALLY

8.69

Average Mortgage % Rate 1972-2012

$3,761.52

CURRENTLY

4.29

In the FUTURE?

Today’s Mortgage % Rate

The annual difference in mortgage payment (P&I) on a $250,000 home loan if rates go from 4.5 to 6.5%.

“I don’t think the Fed ultimately would be troubled with a 6.5% mortgage rate.” - Doug Duncan, chief economist at Fannie Mae 6/2013

Freddie Mac Rates

6.06 Average

4.78 Average

before the financial crisis

after the financial crisis

KCM


Mortgage Amount 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


Single Family Residential

UP 15.8%

Year-Over-Year change from NAR June 2013

UP 12.7% z

Condominiums & Co-ops

UP 11.8%

UP 13.7%


% Year-Over-Year Sales Increases by Price Point


Current % Price Change:


4 REASONS to USE an AGENT who SPECIALIZES in YOUR AREA HOMES ARE MORE LIKELY TO SELL HOMES SELL FOR 1.21% MORE

HOMES OVER MEDIAN PRICE SELL FOR 1.71% MORE HOMES SELL QUICKER Source: WSJ 6/2013


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