november market report
TRANSCRIPT
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KCM Divided into Three Sections
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Existing Home Sales
S&P Case Shiller 10/2013
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NAR 10/2013
100 = Historically Healthy Level
Pending Home Sales
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“The emerging slowdown in home purchases appears to
be largely seasonal.”
Thomas PopikResearch Director for the
HousingPulse survey
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Months Market Pricing
1 – 5 Sellers Appreciation
5 – 6 Even The Norm
6 + Buyers Depreciation
Months Supply & Impact on Price
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Months Inventory of Homes for Sale
NAR 10/2013
5-6 Months = Normal Market Inventory
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NAR 10/2013
Year-over-Year Inventory Levels
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S&P Case Shiller 10/2013
Year-over-Year Change in Prices
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Realtor.com’s Median List Price
Zillow’s Sales Price
0.0%
Month-Over-Month Price Changes
-0.2%
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Affordability is still good compared to any time over the last 50 years.
“Asking home prices give us the first look at where home sale prices are headed, and they point to a
slowdown. After rising rapidly in the first half of 2013, asking prices in two thirds of the largest metros are cooling. In fact, asking prices are falling – not just
rising more slowly – in 11 of the 100 largest metros, the most markets to see prices slip in six months.”
Jed Kolko Trulia’s Chief Economist
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Affordability is still good compared to any time over the last 50 years.
“The rapid price gains of the last year cannot be sustained and we expect the pace to decline substantially…A slower pace is a
positive for housing demand and will help to keep affordability from further eroding.”
Moody’s Analytics
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Affordability is still good compared to any time over the last 50 years.
“If home values continued to rise as they have, relatively unchecked, we would almost certainly
be headed into another bubble cycle, and nobody wants that…This moderation should
help consumers feel more at ease in their decisions to buy and sell, and will help keep the
market balanced.”
Stan HumphriesChief Economist for Zillow
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Affordability is still good compared to any time over the last 50 years.
"I define a bubble as a time when people have extravagant expectations, and the expectations
are driving home price increases. We don't have the mindset of earlier this century…
Affordability is still good compared to any time over the last 50 years."
Robert ShillerNobel Prize Winning Economist
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30 Year Fixed Rate
Freddie Mac 10/2013
Recent Rate Movement
2013
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ta·perˈtāpər/Verb – to diminish or reduce
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30 Year Fixed Rate
Freddie Mac 10/2013
Rate Movement
Increase in mortgage rates
building up to Fed announcement
Decrease in mortgage rates since Fed announcement
Fed announces not to taper bond purchases
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“The MBA believes rates will keep pushing upward, going…
well above 5%.”
HousingWire 10/2013
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Mortgage Rate Projections
Analyst Projected Rate 4Q 2014
Fannie Mae 5.0% National Assoc of Realtors 5.4% Freddie Mac 5.1% Mortgage Bankers Assoc 5.0%
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RETURN ON INVESTMENTJanuary 2000 – November 2013
MSN Money.com, Case Shiller
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Home Price Expectation
Survey
A nationwide panel of over one hundred
economists, real estate experts and
investment & market strategists.
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Average Annual Appreciation
Home Price Expectation Survey 2013 4Q
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Home Price Expectation Survey
Projected Percentage Increase
Home Price Expectation Survey 2013 4Q
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Home Price Expectation Survey 2013 4Q
Cumulative Appreciation by 2018
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30 Year Fixed Rate Mortgage HistoryJanuary 2012 – November 2013
Federal Reserve 11/2013
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S&P Case Shiller 10/2013
S&P Case-Shiller Home Price Indices
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Months Inventory of Homes for Sale
NAR 10/2013
5-6 Months = Normal Market Inventory
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NAR 10/2013
35%
14%
Percentage of Distressed Property Sales
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$175K
$215K
By FSBO By AGENT
*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.
Typical Sold Price*FSBO vs. Agent
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of all buyers search online during home buying process
of all buyers purchased a home through an agent
of all buyers look to print newspaper ads
28%
89%
90%
Where Do Buyers Find a Home?
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The percentage of homes selling as a FSBO has decreased from 19% to 9% in the last 20 years
FSBOs as a Percentage of all Home Sales
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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)
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3.6%
7.9%
4.2%5.1%
Average Annual APPRECIATION
-5.9%
Pre-BUBBLE BUBBLE RECOVERYTO DATE
PROJECTEDNOW to 2018
BUST
Home Price Expectation Survey 2013 4Q
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Home Price Expectation Survey 2013 4Q
PROJECTED Percentage Appreciation
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Home Price Expectation Survey 2013 4Q
Cumulative House Appreciation by 2018
23.7%
40.1%
28%
16.8%Pre-BubbleTrend
Bulls All Projections
Bears
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Mortgage Rate Projections
Analyst Projected Rate 4Q 2014
Fannie Mae 5.0% National Assoc of Realtors 5.4% Freddie Mac 5.1% Mortgage Bankers Assoc 5.0%
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Resources
KEEPINGCURRENTMATTERS.COM
Slide Slide Title Link
4 Existing Home Sales http://www.spindices.com/index-family/real-estate/sp-case-shiller
5 Pending Home Sales http://www.realtor.org/
6 Thomas Popik Quotehttp://www.dsnews.com/articles/housing-market-performs-well-despite-rising-interest-rates-2013-10-24
8, 9Months Inventory of Homes for Sale, Year-over-Year Inventory Levels
http://www.realtor.org/
10 Year-over-Year Change in Prices http://www.spindices.com/index-family/real-estate/sp-case-shiller
11 Month-Over-Month Price Changeshttp://www.realtor.com/data-portal/Real-Estate-Statistics.aspx http://zillow.mediaroom.com/index.php?s=159&item=390
12 Jed Kolko Quote http://info.trulia.com/trulia-price-and-rent-monitors-sept-2013
13, 14Moody’s Analytics Quote, Stan Humphries Quote
http://www.dsnews.com/articles/moodys-predicts-strong-market-despite-slowdown-2013-09-27
15 Robert Shiller Quote http://www.cnbc.com/id/101152271
16, 18 Recent Rate Movement, Rate Movement http://www.freddiemac.com/pmms
19 Mortgage Bankers Association Quote http://www.housingwire.com/articles/27697-mba-economists-predict-mortgage-market-taper
20, 39 Mortgage Rate Projections
http://www.mortgagebankers.org/files/Bulletin/InternalResource/84813_.pdf http://www.freddiemac.com/news/finance/docs/Jun_2013_public_outlook.pdfhttp://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
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Resources
KEEPINGCURRENTMATTERS.COM
Slide Slide Title Link
22 Return on Investment http://www.spindices.com/index-family/real-estate/sp-case-shiller
23, 24, 25, 26
Home Price Expectation Survey, Average Annual Appreciation, Cumulative Appreciation by 2017
https://www.pulsenomics.com/Q4_2013_HPE_Survey.php
27 30 Year Fixed Rate Mortgage History http://www.freddiemac.com/pmms
28 S&P Case-Shiller Home Price Indiceshttps://www.spice-indices.com/idpfiles/spice-assets/resources/public/documents/19529_cshomeprice-release-0730.pdf?force_download=true
29, 30Months Inventory of Homes for Sale, Percentage of Distressed Property Sales
http://www.realtor.org/
32 Typical Sold Price http://economistsoutlook.blogs.realtor.org/2013/11/01/how-seller-sold-home-1991-2012/
33 Where Do Buyers Find a Home? http://www.realtor.org/
34 FSBOs as a Percentage of Home Sales http://economistsoutlook.blogs.realtor.org/2013/11/01/how-seller-sold-home-1991-2012/
36-38Average Annual Appreciation, Projected Percentage Appreciation, Cumulative House Appreciation by 2017
https://www.pulsenomics.com/Q4_2013_HPE_Survey.php
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