Naea 07-13

KCM Divided into Three Sections

90

95

100

105

110

115

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

Pending Home Sales

NAR 6/2013

100 = Historically Healthy Level

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 6/2013

5000

5200

5400

5600

5800

6000

6200

2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4

ProjectedActual

Home Salesin thousands

NAR 6/2013

Median Region $0-100K$100-250K

$250-500K

$500-750K

$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%

Year-Over-Year Sales by Price Point

WEST MIDWEST

SOUTH

NORTHEAST

NAR 6/2013

Median Days on Market by Type

NAR, RCI Survey 6/2013

Be Able to Address the Issue of a Possible Bubble in Housing

-60

-50

-40

-30

-20

-10

0

10

20

30

Last 12 Months Since Peak

Price Changes as per Case Shiller

Case Chiller

“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 ChenSenior Director of the Moody's Analytics Research Staff

Moody’s Economy

Are Properties Overvalued?

28%26%

0%0%

5%

10%

15%

20%

25%

30%

Income Rent House Prices

Gains as Measured Between the First Quarters of 2004 and 2013

Moody’s Economy

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

Where are mortgage rates headed?

Mortgage Rate ProjectionsMortgage 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

Date PriceInterest

RateP&I

Last Year $200,000 3.5% $898.09

This Year $220,000 4.5% $1,114.71

Difference in Payment - $216.62

The Cost of Waiting a Year

Over 12 Months - $2,599.44

Over 30 Year Mortgage - $77,983.20

30 Year Fixed Rate Mortgage

Recent Rate Movement

3

3.25

3.5

3.75

4

4.25

4.5

4.75

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 6/6 6/13 6/20 6/27Rate 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 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 NothaftFreddie Mac VP and Chief Economist

Freddie Mac

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 Amount

NAR 6/2013

15%

20%

25%

30%

35%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

Percentage of Distressed Property Sales

35%

18%

Campbell/Inside Mortgage Finance HousingPulse Tracking Survey 6/2013

43.8%

36%

20.2%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

Current Homeowners First Time Buyers Investors

Breakdown of Today’s Purchasers

WSJ 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 home2.Sell homes for 1.21% more3.Sell homes above the median price for 1.71% more4.Sell the home in 5.5 fewer days 

Return on Investment

37.1

16

-12.8

52.4

-30

0

30

60

Dow S&P NASDAQ Real Estate

January 2000 – July 2013

MSN Money.com, Case Shiller

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 6/2013

5-6 Months = Normal Market Inventory

S&P Case Shiller 6/2013

S&P Case-Shiller Home Price Indices

-3.9%-3.5%

-2.5%-1.7%

-0.5%

0.6%1.1%

2.0%

3.6%4.3%

5.5%

6.8%

8.1%

9.3%10.2%

12.1%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

Year-over-Year Change in Prices

Jan Feb Mar Apr May

S&P Case Shiller 6/2013

S&P Case-Shiller Home Price Indices

Metropolitan Area Year-over-Year

Atlanta 20.8%

Boston 8.1%

Charlotte 7.3%

Chicago 9.3%

Cleveland 4.8%

Dallas 7.4%

Denver 9.9%

Detroit 19.8%

Las Vegas 22.3%

Los Angeles 18.8%

Metropolitan Area Year-over-Year

Miami 13.0%

Minneapolis 14.8%

New York 3.2%

Phoenix 21.5%

Portland 12.9%

San Diego 14.7%

San Francisco 23.9%

Seattle 11.4%

Tampa 11.3%

Washington 7.2%

S&P Case-Shiller Home Price Indices

S&P Case Shiller 5/2013

MARKETING

Opening Doors with

POWERFUL MARKETING

8.69AverageMortgage% Rate

1972-2012

HISTORICALLY

4.29Today’s

Mortgage

% Rate

CURRENTLY In the FUTURE?

“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

before the financial crisis6.06 Average

after the financial crisis4.78 Average

$3,761.52The annual difference in mortgage payment (P&I) on a $250,000 home loan if rates go from 4.5 to 6.5%.

HOME MORTGAGE INTEREST RATES (30 YEAR FIXED)

Freddie Mac Rates

KCM

%

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 Amount

z

Year-Over-Year change from NAR June 2013Single Family Residential

Condominiums & Co-ops

UP15.8%

UP 12.7%

UP11.8%

UP 13.7%

% Year-Over-Year Sales Increases by Price Point

Current % Price Change:

Source: WSJ 6/2013

4 REASONS to USE an AGENT 4 REASONS to USE an AGENT who SPECIALIZES in who SPECIALIZES in YOURYOUR AREA AREA

HOMES SELLQUICKER

HOMES SELL FOR 1.21% MORE

HOMES OVER MEDIAN PRICE SELL FOR 1.71% MORE

HOMES ARE MORE LIKELY TO SELL

http://terribuseman.wordpress.com/2013/06/13/are-we-approaching-another-housing-bubble/

Resources

KEEPINGCURRENTMATTERS.COM

Slide Slide Title Link

4,5Pending Home Sales, Month’s Inventory of Homes for Sale

http://www.realtor.org

7 Year-Over-Year Sales by Price Point http://economistsoutlook.blogs.realtor.org/page/4/

8 Median Days on Market by Typehttp://economistsoutlook.blogs.realtor.org/2013/06/25/median-days-on-the-market-down-to-41-days-in-may/

10 Price Changes as per Case Shiller http://www.housingviews.com/2013/06/25/how-the-cities-did-in-april/

11,12Are Properties Overvalued, Gains as Measured Between the First Quarters of 2004 and 2013

http://www.economy.com/dismal/pro/article.asp?cid=240711 (Paid Service)

13 The Economist Index of US House Prices http://www.economist.com/blogs/graphicdetail/2013/06/us-house-prices

15 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

16,1930 Year Fixed Rate Mortgage History, Recent Rate Movement

http://www.freddiemac.com/pmms

20 Doug Duncan Quotehttp://www.inman.com/2013/06/24/experts-doubt-surge-in-mortgage-rates-will-derail-housing-recovery

Resources

Slide Slide Title Link

21 Frank Nothaft Quote http://www.freddiemac.com/news/finance/docs/Jun_2013_public_outlook.pdf

23 Percentage of Distressed Property Sales http://www.realtor.org

24 Breakdown of Today’s Purchasers http://www.dsnews.com/articles/investor-activity-falls-sharply-in-may-2013-06-24

25 Agents Who Specializehttp://online.wsj.com/article/SB10001424127887323844804578531554168068278.html?mod=WSJ_RealEstate_MansionWeekly

28 Months Inventory of Homes for Sale http://www.realtor.org

29,30,31 S&P Case-Shiller Home Price Indices http://www.housingviews.com/wp-content/uploads/2013/05/CSHomePrice_Release_March-Qtr1-Results.pdf

37% Year-Over-Year Sales Increases by Price Point

http://economistsoutlook.blogs.realtor.org/page/4/

38 Current % Price Change http://www.housingviews.com/2013/06/25/how-the-cities-did-in-april

394 Reasons to Use an Agent who Specializes in Your Area

http://online.wsj.com/article/SB10001424127887323844804578531554168068278.html?mod=WSJ_RealEstate_MansionWeekly

40Are We Approaching Another Housing Bubble?

http://terribuseman.wordpress.com/2013/06/13/are-we-approaching-another-housing-bubble

KEEPINGCURRENTMATTERS.COM

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