FHFA Regional Home Prices (year-over-year)
FHFA 2013 1Q HPI Report
2012 2Q
2012 4Q
2012 3Q
2013 1Q
FHFA State Home Prices (year-over-year)
FHFA 2013 1Q HPI Report
Buyers Raising Their Offers 45% 40%
The percentage of buyers considering paying more for a home now than 90 days ago because of low inventory.
41%
35%
34%
30% 25%
26%
20% 15% 10% 5% 0%
2012 4Q
2013 1Q
2013 2Q HousingWire 5/2013
Signs of New Housing Bubble in Several Areas - CNN May 17th
91% of Regions are UNDERVALUED 9%
91%
Undervalued Trulia 5/2013
Overvalued
Housing Bubble? “Even if double-digit price appreciation were to continue in former bubble metro areas, there is no reason to believe that new home price bubbles are forming. That’s because single-family homes in these markets are still very affordable, even after last year’s large price gains.” Dr. David Stiff, Chief Economist for CoreLogic Case-Shiller
Real Estate THE ‘JUICE’ of Recovery “We forecast that housing starts will increase by about 200,000 units in 2013, which would support over 100,000 new jobs in construction alone.” Frank E. Nothaft Chief Economist at Freddie Mac 5/2013
Economic Impact of a Home Sale
NAR 5/2013
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%
10.4%
6.0%
4.0%
4.3% 3.6%
4.1%
2.0% 0.0%
-2.0% -4.0% -5.8%
-6.0% Pre-Bubble (1987-1999)
Bubble Bust Recovery to Date (Jan '00-Apr '07) (May '07-Oct '11) (Nov '11-Mar '13 )
Expectations (2013-2017)
Home Price Expectation Survey 5/2013
Home Price Expectation Survey 7
Projected Percentage Increase
6
5.4 5
4.2 3.7
4
3.5
3.5
2016
2017
3
2
1
0
2013
2014
2015
Home Price Expectation Survey 5/2013
Percentage Appreciation by Survey 7
3 Years Ago
2 Years Ago
1 Year Ago
Now
6.5 6
5.4
5.5 5
4.4
4.5 4 3.5
3.8
3.5
2.9
3 2.5
2.5
2.2
2 1.5
1.3
1 0.5 0
2013
2014 Home Price Expectation Survey 5/2013
Cumulative Appreciation by 2017 40.0%
32.8% 30.0%
22.3%
22.3%
20.0% 12.3%
10.0%
0.0% Pre-Bubble Trend
Bulls
All Projections
Bears
Home Price Expectation Survey 5/2013
What a Homeowner Should Know Before FSBOing
89% 90% 28%
of all buyers purchased their home through a real estate agent
TYPICAL SOLD PRICE*
of all buyers search online during their home buying process
of all buyers look to print newspaper ads as an offline resource
BY FSBO $174,900
BY AGENT $215,000
The % of homes selling as a FSBO has decreased in 20 years from 19% to 9%.
*The ‘typical’ price is actually the average price in the survey. However, studies have shown that people are more likely to FSBO in markets with lower price points.
Sources: NAR, Google
FSBOs Must Be Ready to Negotiate Here is a list of some of the people with whom you must be prepared to negotiate: • The buyer • The buyer’s agent • The buyer’s attorney • The home inspection company • The termite company • The buyer’s lender • The appraiser • The title company • The town or municipality • The buyer’s buyer • Your bank (in the case of a short sale)
Appraisal Challenges
Seller’s Possible Perception of Value
Buyer’s Possible Perception of Value
Appraiser’s Possible Perception of Value
Return on Investment January 2000 – June 2013
48.7
50
38.2 30
16.9 10
-10
-12.3 -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
Mar
Apr
NAR 3/2013
Pending Home Sales 110
2013
2012
2011
January 2012 – December 2012
100
100 = Historically Healthy Level
90
January 2011 – December 2011 80 Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
NAR 5/2013
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 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 Mar Apr
NAR 5/2013
S&P Case-Shiller Home Price Indices Metropolitan Area
Year-over-Year
Metropolitan Area
Year-over-Year
Atlanta
19.1%
Miami
10.7%
Boston
6.7%
Minneapolis
12.5%
Charlotte
7.3%
New York
2.6%
Chicago
7.8%
Phoenix
22.5%
Cleveland
4.8%
Portland
12.8%
Dallas
6.8%
San Diego
12.1%
Denver
9.8%
San Francisco
22.2%
Detroit
18.5%
Seattle
10.6%
Las Vegas
20.6%
Tampa
11.8%
Los Angeles
16.6%
Washington
7.7% S&P Case Shiller 5/2013
Home Prices in the Short Term 150.00
2010-11 2011-12 2012-13
145.00
140.00
135.00
130.00
May
June
July
Aug
Sept
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
S&P Case Shiller 5/2013
30 Year Fixed Rate Mortgage History 4.25
1/2012 – 5/2013 4
3.75
3.5
3.25
Federal Reserve 5/2013
Recent Rate Movement 3.85 3.8
30 Year Fixed Rate Mortgage
3.75 3.7 3.65 3.6
3.55 3.5 3.45 3.4
2013
3.35 3.3 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 5/2 5/9 5/16 5/23 5/30 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 3.35 3.42 3.51 3.59 3.81
Mortgage Rate Projections
Analyst Mortgage Bankers Assoc Fannie Mae National Assoc of Realtors
Projected Rate This Time Next Year
4.3% 4% 4.6%
Percentage of Distressed Property Sales 35% April month-end data shows delinquency rate below 6.5 percent for first time since July 2008; foreclosure inventory down nearly 25 percent year-over-year. - LPS
35%
30%
25%
18% 20%
15% Jan
Feb
Mar
Apr May Jun
Jul
Aug Sep
Oct
Nov Dec Jan
Feb
Mar
Apr
LPS & NAR 5/2013