naea 08-13
TRANSCRIPT
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KCM Divided into Three Sections
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Home Price Expectation
SurveyA nationwide panel of over one hundred
economists, real estate experts and
investment & market strategists.
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3.6%
7.9%
-5.8%
4.7% 4.7%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Pre-Bubble (1987-1999)
Bubble (Jan '00-May '07)
Bust (June '07-Oct '11)
Recovery to Date (Nov '11-June '13 )
Expectations (2013-2017)
Average Annual Appreciation
Home Price Expectation Survey 7/2013
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Projected Percentage Increase
Home Price Expectation Survey
Home Price Expectation Survey 7/2013
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Cumulative Appreciation by 2017
Home Price Expectation Survey 7/2013
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Percentage Appreciation by Survey
Home Price Expectation Survey 7/2013
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Distressed Property Numbers Diving
Distressed inventories have fallen 14.4% so far this year
Completed foreclosures are down 20% from last year
National foreclosure inventory is down 28% from last year
Seriously delinquent loans are down 23.7% from a year ago
-14.4% -20%
-28% -23.7%
CoreLogic 7/2013
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CoreLogic 7/2013
Foreclosure Inventory by State
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What Housing
Bubble?
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“Rising home prices have swept the country…However, these runaway price gains won’t last: both rising mortgage rates and slowly growing inventories should start tapping the brakes on home prices, preventing them from rising back into bubble territory.” Jed KolkoTrulia’s Chief Economist
Trulia 7/2013
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6.00 $ 1,079 $ 1,109 $ 1,139 $ 1,169 $ 1,199
5.75 $ 1,050 $ 1,080 $ 1,109 $ 1,138 $ 1,167
5.50 $ 1,022 $ 1,050 $ 1,079 $ 1,107 $ 1,136
5.25 $ 994 $ 1,022 $ 1,049 $ 1,077 $ 1,104
5.00 $ 966 $ 993 $ 1,020 $ 1,047 $ 1,074
4.75 $ 939 $ 965 $ 991 $ 1,017 $ 1,043
4.50 $ 912 $ 937 $ 963 $ 988 $ 1,013
$ 180,000 $ 185,000 $ 190,000 $ 195,000 $ 200,000
-10% -7.5% -5% -2.5%
Buyer’s Purchasing PowerR
AT
E
Principal and Interest Payments rounded to the nearest dollar amount.
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Buyer’s Purchasing Power6.00 $ 2,158 $ 2,218 $ 2,278 $ 2,338 $ 2,398
5.75 $ 2,100 $ 2,160 $ 2,218 $ 2,276 $ 2,334
5.50 $ 2,044 $ 2,100 $ 2,158 $ 2,214 $ 2,272
5.25 $ 1,988 $ 2,044 $ 2,098 $ 2,154 $ 2,208
5.00 $ 1,932 $ 1,986 $ 2,040 $ 2,094 $ 2,148
4.75 $ 1,878 $ 1,930 $ 1,982 $ 2,034 $ 2,086
4.50 $ 1,824 $ 1,874 $ 1,926 $ 1,976 $ 2,026
$ 360,000 $ 370,000 $ 380,000 $ 390,000 $ 400,000
-10% -7.5% -5% -2.5%
RA
TE
Principal and Interest Payments rounded to the nearest dollar amount.
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Buyer’s Purchasing Power6.00 $ 3,237 $ 3,328 $ 3,417 $ 3,507 $ 3,597
5.75 $ 3,151 $ 3,239 $ 3,326 $ 3,414 $ 3,501
5.50 $ 3,066 $ 3,151 $ 3,236 $ 3,322 $ 3,407
5.25 $ 2,982 $ 3,065 $ 3,148 $ 3,230 $ 3,313
5.00 $ 2,899 $ 2,979 $ 3,060 $ 3,140 $ 3,221
4.75 $ 2,817 $ 2,895 $ 2,973 $ 3,052 $ 3,130
4.50 $ 2,736 $ 2,812 $ 2,888 $ 2,964 $ 3,040
$ 540,000 $ 555,000 $ 570,000 $ 585,000 $ 600,000
-10% -7.5% -5% -2.5%
RA
TE
Principal and Interest Payments rounded to the nearest dollar amount.
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Buyer’s Purchasing Power6.00 $ 4,317 $ 4,437 $ 4,557 $ 4,676 $ 4,796
5.75 $ 4,201 $ 4,318 $ 4,435 $ 4,552 $ 4,669
5.50 $ 4,088 $ 4,202 $ 4,315 $ 4,429 $ 4,542
5.25 $ 3,976 $ 4,086 $ 4,197 $ 4,307 $ 4,418
5.00 $ 3,865 $ 3,972 $ 4,080 $ 4,187 $ 4,295
4.75 $ 3,756 $ 3,860 $ 3,965 $ 4,069 $ 4,173
4.50 $ 3,648 $ 3,749 $ 3,851 $ 3,952 $ 4,053
$ 720,000 $ 740,000 $ 760,000 $ 780,000 $ 800,000
-10% -7.5% -5% -2.5%
RA
TE
Principal and Interest Payments rounded to the nearest dollar amount.
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Buyer’s Purchasing Power6.00 $ 5,396 $ 5,546 $ 5,696 $ 5,846 $ 5,996
5.75 $ 5,252 $ 5,398 $ 5,544 $ 5,690 $ 5,836
5.50 $ 5,110 $ 5,252 $ 5,394 $ 5,536 $ 5,678
5.25 $ 4,970 $ 5,108 $ 5,246 $ 5,384 $ 5,522
5.00 $ 4,831 $ 4,966 $ 5,100 $ 5,234 $ 5,368
4.75 $ 4,695 $ 4,825 $ 4,956 $ 5,086 $ 5,216
4.50 $ 4,560 $ 4,687 $ 4,814 $ 4,940 $ 5,067
$ 900,000 $ 925,000 $ 950,000 $ 975,000 $ 1,000,000
-10% -7.5% -5% -2.5%
RA
TE
Principal and Interest Payments rounded to the nearest dollar amount.
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Calculated Risk 7/2013
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30 Year Fixed Rate Mortgage History
1/2012 – 7/2013
Federal Reserve 7/2013
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Mortgage Rate Projections
Analyst Projected Rate 3Q 2014
Fannie Mae 5.0%
National Assoc of Realtors 4.8%
Freddie Mac 5.1%
Mortgage Bankers Assoc 4.9%
7/2013
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Date PriceInterest
RateP&I
Last Year $400,000 3.5% $1,796.18
This Year $420,000 4.5% $2,128.08
Difference in Payment - $331.90
The Cost of Waiting a Year
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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
Mortgage Payment Differences
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$2,812.47
$1,715.63
$1,471.66
$1,266.71
1983
1993
2003
2013
Monthly payment on a
$250,000 MORTGAGE
(Principal & Interest)
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Number of BUYERS out of 100 WILLING TO bid
OVER asking price
1-5% over asking price
10+% 6-10% over asking price over asking price
Trulia 7/2013
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Migration Patternswww.forbes.com/special-report/2011/migration.html
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41.7
20.9
-7.9
56.1
-30
0
30
60
Dow S&P NASDAQ Real Estate
January 2000 – July 2013
MSN Money, Case Shiller 7/2013
Return on Investment
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90
95
100
105
110
115
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May June
Pending Home Sales
NAR 7/2013
100 = Historically Healthy Level
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80
90
100
110
120
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2013 2012 2011
January 2012 – December 2012
100 = Historically Healthy Level
Pending Home Sales
NAR 7/2013
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NAR 7/2013
10%
15%
20%
25%
30%
35%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Percentage of Distressed Property Sales
35%
15%
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Months Inventory of Homes for Sale
4.0
5.0
6.0
7.0
8.0
9.0
10.0
Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May
NAR 7/2013
5-6 Months = Normal Market Inventory
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S&P Case Shiller 7/2013
S&P Case-Shiller Home Price Indices
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MARKETING
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Opening Doors with
POWERFUL MARKETING
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RETURN ON INVESTMENT
January 2000 – July 2013
41.7%
20.9%
-7.9%
56.1%
Dow Jones S&P
NASDAQ
Real Estate
MSN Money, Case Shiller
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3.6%
7.9%
4.7%4.7%
Average Annual APPRECIATION
-5.8%
Pre-BUBBLE BUBBLE RECOVERYTO DATE
PROJECTEDNOW to 2017
BUST
Home Price Expectation Survey 7/2013
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Home Price Expectation Survey 7/2013
Cumulative House Appreciation by 2017
19.4%
35%
23.7%
13.1%Pre-BubbleTrend
Bulls BearsAll Projections
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Home Price Expectation Survey 7/2013
PROJECTED Percentage Appreciation
6.7%
4.2%3.6% 3.5%
2013
3.4%
2014 2015 2016 2017
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“The housing market has bottomed. It's not
too late to get involved. I still think
buying a home is the best investment any individual can make. Affordability is still at
an all-time high. Buy a home and, if you can, buy a second home.”
John Paulson
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https://www.facebook.com/SeattleFirstTimeHomeBuyers
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https://www.facebook.com/ShaunFarrellRealEstate
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http://yournaperville.com/mortgage-rates-and-impact-on-buying-a-naperville-home-july-2013
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XXX
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Resources
KEEPINGCURRENTMATTERS.COM
Slide Slide Title Link
4-8
Home Price Expectation Survey, Average Annual Appreciation, Cumulative Appreciation by 2017, Percentage Appreciation by Survey
https://pulsenomics.com/Q2_2013_HPE_Survey.php
9 Distressed Property Numbers Divinghttp://www.corelogic.com/research/foreclosure-report/national-foreclosure-report-june-2013.pdf
10 Foreclosure Inventory by Statehttp://www.corelogic.com/research/foreclosure-report/national-foreclosure-report-june-2013.pdf
11 What Housing Bubble?http://www.dsnews.com/articles/experts-see-risk-of-housing-bubble-resulting-from-fed-policies-2013-05-07
13 Jed Kolko Quote http://info.trulia.com/trulia-price-and-rent-monitors-jun-2013
19 Dramatic Mortgage Rate Increases http://www.calculatedriskblog.com/2013/07/house-prices-and-mortgage-rates.html
20, 2130 Year Fixed Rate Mortgage History, Recent Rate Movement
http://www.freddiemac.com/pmms
22 Mortgage Rate Projections
http://www.mortgagebankers.org/files/Bulletin/InternalResource/84813_.pdf http://www.freddiemac.com/news/finance/docs/Jun_2013_public_outlook.pdf http://www.realtor.org/sites/default/files/reports/2013/embargoes/phs-6-27-hgbfjnv/july-2013-outlook-2013-6-27.pdf http://www.fanniemae.com/resources/file/research/emma/pdf/Housing_Forecast_061313.pdf
25Monthly Payment on a $250,000 Mortgage
http://www.bankrate.com
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Resources
Slide Slide Title Link
26 Buyers Willing to Bid Over Asking Price http://info.trulia.com/american-dream-survey-summer-2013
27 Migration Patterns http://www.forbes.com/special-report/2011/migration.html
29 Return on Investment http://www.spindices.com/index-family/real-estate/sp-case-shiller
30, 31, 32, 33
Pending Home Sales, Percentage of Distressed Property Sales, Months Inventory of Homes for Sale
http://www.realtor.org
34 S&P Case-Shiller Home Price Indiceshttps://www.spice-indices.com/idpfiles/spice-assets/resources/public/documents/19529_cshomeprice-release-0730.pdf
37 Return on Investment http://www.spindices.com/index-family/real-estate/sp-case-shiller
39, 40Cumulative House Appreciation by 2017, Projected Percentage Appreciation
https://pulsenomics.com/Q2_2013_HPE_Survey.php
41 John Paulson Quote http://www.cnbc.com/id/100893817
42 Seattle First Home Buyers https://www.facebook.com/SeattleFirstTimeHomeBuyers
43 Shaun Farrell Real Estate https://www.facebook.com/ShaunFarrellRealEstate
44 YourNaperville.com Blog Post http://yournaperville.com/mortgage-rates-and-impact-on-buying-a-naperville-home-july-2013
KEEPINGCURRENTMATTERS.COM
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The key to
successis developing
TRUST
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