Pending Home Sales 105 100 = Historically Healthy Level
100
95
November 2011 – November 2012
90
85
November 2010 – November 2011 80 Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
NAR 12/2012
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
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
NAR 12/2012
Mortgage Rates – 30 Year Fixed 5.25
5
4.75
4.5
4.25
4
3.75
3.5
3.25
1/01/2011
Today Federal Reserve
Return on Investment 50
46.1
January 2000 – January 2013
30
18.3 10
0.5 -10
-24.9
-30
-50
Dow
S&P
NASDAQ
Real Estate MSN Money.com, Case Shiller
Home Price Expectation Survey
Average Annual Appreciation 12.0%
10.0%
10.4%
8.0% 6.0% 4.0% 3.6%
3.3%
2.0% 0.0% -2.0% -4.0%
-5.7% -6.0%
Pre-Bubble (1987-1999)
Bubble (Q1 2000 - Q2 2006)
Bust (Q3 2006 - Q2 2012)
Expectations (2013 - 2017)
Home Price Expectation Survey 12/2012
Home Price Expectation Survey 4.5
Projected Percentage Increase
4
3.5
3.1
3.6
3.2
3.3
3.3
2014
2015
2016
2017
3 2.5 2 1.5 1
0.5 0
2013
Home Price Expectation Survey 12/2012
Bulls vs. Bears 35
33.6
Overall
Bulls
Bears
30
27.7
25
23.1
21.8 19
20 16.5
15.2
15 11.5
10
11.5 8.8
7.9 6.3 4.6 3
5
11.2
5.5
6.7
3.8
0
0 2011
2012
2013
2014
2015
2016
2017
Home Price Expectation Survey 12/2012
Projected % Change in Home Prices Source
2013
Home Price Expectation Survey
3.1
National Assoc Business Economists
2.8
WSJ Economic Survey
3.25
Urgency Being Felt by Buyers Percentage of Buyers Who Believe Prices Will Rise In the Next 12 Months 80%
71% 70%
57%
60%
61%
50% 40%
34%
30% 20% 10%
0% Q1 2012 Survey
Q2 2012 Survey
Q3 2012 Survey
Q4 2012 Survey Redfin12/17/2012
Gen X & Gen Y and Homeownership
43%
are already homeowners
Trulia12/2012
72% say homeownership is part of their
personal American Dream
Trulia 12/2012
93% that currently rent plan to purchase a home
Trulia 12/2012
Joint Center for Housing Studies Harvard University 2012
79%
of those under 25 years old
% that Believe Owning is Financially Better than Renting
86%
of those 25-34
Gen X and Y Price
Rate
P&I
Today
360,000
3.4
1,596.53
End of Year
371,160
4.4
1,858.62
Monthly Savings $262.09
Thinking about moving up to the home of your dreams?
Move-Up Buyers Coming to Market 60%
50%
Reasons Non-First Time Buyers Will Buy
49%
40%
30%
17.5%
20%
11.5% 8.6%
10%
9.6%
3.7% 0%
Significally Bigger
Same Size, Cross Town
Same Size, But Same Size, More Same Size, Nicer Affordable Cross Country
75.1% Some Form of Move-Up Buyer
Significally Smaller
Redfin12/17/2012
Cost vs. Price
The Move-Up Seller
Comparison Today
Current Home
Move-up Home
2006 Price
$300,000
$450,000
Current Price (-20%)
$240,000
$360,000
Loss/Savings
$60,000
$90,000
Net Gain for Move-Up Seller
$30,000
Home Prices Next Year In the recent Home Price Expectation Survey, 105 leading housing analysts called for a 3.1% increase in home values by the end of 2013.
The Move-Up Seller
Comparison – 1 Year Later
Current Home
Move-up Home
Current Price
$240,000
$360,000
Future Price (+3.1%)
$247,440
$371,160
$7,440
$11,160
Future Gain Future Difference
$3,720
Current Gain
$30,000
Total Gain
$33,720
Mortgage Rates Moving Forward “After reaching record lows in 2012, mortgage rates are expected to creep up slowly in 2013, the Mortgage Bankers Association predicted.� 5 4.5 4 3.5
4.4
3 2.5 2 1.5
Projected 30 Year Mortgage Rate
1 0.5 0
2013 4Q MarketWatch 10/24/2012
The Move-Up Seller
Price
Rate
P&I
Today
360,000
3.4
1,596.53
End of Year
371,160
4.4
1,858.62
Monthly Savings $262.09
Future Home Prices
Home Prices in the Short Term 150.00
2010-11 2011-12 2012-13
145.00
140.00
135.00
130.00
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
Jan
Feb
Mar
Apr
S&P Case Shiller 12/2012
Some States Still Have a Way to Go “States with a non-judicial process witnessed a sharper decline in home prices at the beginning of the downturn, but are currently enjoying price appreciation. This is due to a more disposition of delinquent supply, leaving lean inventory in many markets‌In contrast, states with a judicial process, such as Florida, Illinois, and New York, are still struggling to clear the pipeline of distressed loans. As a result, home prices in the Chicago and New York metro areas have continued to edge lower.â€? BofA Merrill Lynch's Michelle Meyer
Days to Foreclosure
RealtyTrac12/2012
Highest Foreclosure Inventory
Resources Slide
Slide Title
Link
2,3,4
Pending Home Sales, Month’s Inventory of Home Sales
http://www.realtor.org
5
Mortgage Rates
http://www.freddiemac.com/pmms
6
S&P Case-Shiller Home Prices Indices
http://www.standardandpoors.com/indices/articles/en/us/?articleType=PDF&assetID=12 45345601476
11,12, 13, 14, 15
Average Annual Appreciation, Home Price Expectation Survey, Bulls vs. Bears, Cumulative Appreciation by Survey, Projected % Change in Home Prices
https://pulsenomics.com/Dec_2012_HPE_Survey.html
15
Projected % Change in Home Prices
http://economistsoutlook.blogs.realtor.org/2012/10/26/home-prices-projected-to-increaseby-3-percent-in-forthcoming-year, http://online.wsj.com/public/resources/documents/infoflash08.html?project=EFORECAST07
16
Urgency Being Felt by Buyers
http://www.redfin.com/about/press/releases/more-homebuyers-confident-about-risinghome-prices
18, 19, 20
43% are already Homeowners, 72% say homeownership…, 93% that currently rent…,
http://info.trulia.com/trulia-american-dream-survey-winter-2012
21
% that Believe Owning is Financially Better than Renting
http://www.jchs.harvard.edu/sites/jchs.harvard.edu/files/w12-4_drew_herbert.pdf
24
Move Up Buyers Coming to Market
http://www.redfin.com/about/press/releases/more-homebuyers-confident-about-risinghome-prices
KEEPINGCURRENTMATTERS.COM
Resources Slide
Slide Title
Link
27
Home Prices Next Year
https://www.pulsenomics.com/Sep_2012_HPE_Survey.html
29
Mortgage Rates Moving Forward
http://www.marketwatch.com/story/mortgage-rates-will-rise-next-year-but-slowly-2012-10-24
32
Home Prices in the Short Term
http://www.standardandpoors.com/indices/sp-case-shiller-home-priceindices/en/us/?indexId=spusa-cashpidff--p-us----
33
Some States Still Have a Way to Go
http://www.businessinsider.com/michelle-meyer-foreclosure-process-home-prices-2012-12
34
Days to Foreclosure
http://www.marketwatch.com/story/how-long-a-foreclosure-takes-in-your-state-2012-1203?siteid=nwhreal
KEEPINGCURRENTMATTERS.COM