Return on Investment · 80 85 90 95 100 105 110 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan January 2012 – January 2013 January 2011 – January 2012 100 = Historically
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Return on Investment
January 2000 – March 2013
MSN Money.com, Case Shiller
90
95
100
105
110
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Pending Home Sales
NAR 2/2013
80
85
90
95
100
105
110
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
January 2012 – January 2013
January 2011 – January 2012
100 = Historically Healthy Level
Pending Home Sales
NAR 2/2013
New Home
SALES
Compared to
December 2012
Compared to
January 2012
January 2013 Sales
+15.6%
+28.9%
Census 3/1/2013
“While gross domestic product is
expected to be negatively impacted by
all the uncertainty surrounding the
nation's impending debt ceiling debate
and the risk of sequestration, the
housing sector is expected to continue
its upward trajectory, the National
Association for Business
Economics (NABE) said.”
Political Uncertainty
Housing Wire 2/25/2013
Month’s Inventory of Homes for Sale
4.0
5.0
6.0
7.0
8.0
9.0
10.0
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
NAR 2/2013
5-6 Months = Normal Market Inventory
Month’s Inventory of Homes for Sale
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
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
NAR 2/2013
5-6 Months = Normal Market Inventory
2011
2012
3.0
4.0
5.0
6.0
7.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
< 4 Months = Sellers’ Market
5-6 Months = Normal Market
Month’s Inventory of Homes for Sale
NAR 2/2013
Calculated Risk 2/2013
New Home Inventory
Calculated Risk 2/2013
Months Market Pricing
1- 4 Sellers Appreciation
5 - 6 Even The Norm
7+ Buyers Depreciation
Months Supply & Impact on Price
FHFA 2012 1Q HPI Report
FHFA Regional Home Prices (year-over-year)
FHFA Regional Home Prices (year-over-year)
FHFA 2012 2Q HPI Report
FHFA Regional Home Prices (year-over-year)
FHFA 2012 3Q HPI Report
FHFA Regional Home Prices (year-over-year)
FHFA 2012 4Q HPI Report
1st Quarter 2nd Quarter
3rd Quarter 4th Quarter
FHFA 2/2013
FHFA State Home Prices (year-over-year)
S&P Case Shiller 2/2013
S&P Case-Shiller Home Price Indices
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%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
Jun Jul Aug Sep Oct Nov Dec
Year-over-Year Change in Prices
Jan Feb Mar Apr May
S&P Case Shiller 2/2013
Index Increase
Case Shiller 6.8%
LPS 5.8%
CoreLogic 8.3%
FHFA (4th Quarter) 5.5%
Year-over-Year Price Increases
S&P Case-Shiller Home Price Indices
Metropolitan Area Year-over-Year
Atlanta 9.9%
Boston 3.6%
Charlotte 5.3%
Chicago 2.2%
Cleveland 2.9%
Dallas 6.5%
Denver 8.5%
Detroit 13.6%
Las Vegas 12.9%
Los Angeles 10.2%
Metropolitan Area Year-over-Year
Miami 10.6%
Minneapolis 12.2%
New York -0.5
Phoenix 23.0%
Portland 6.5%
San Diego 9.2%
San Francisco 14.4%
Seattle 8.2%
Tampa 7.2%
Washington 5.9%
S&P Case Shiller 2/2013
Home Prices in the Short Term
130.00
135.00
140.00
145.00
150.00
May June July Aug Sept Oct Nov Dec Jan Feb
2010-11
2011-12
2012-13
S&P Case Shiller 2/2013
PROJECTED?
S&P Case-Shiller Home Price Indices
S&P Case Shiller 2/2013
Metropolitan Area M-o-M
Atlanta 0.3
Boston 0.1
Charlotte -0.4
Chicago -0.7
Cleveland -0.1
Dallas -0.1
Denver -0.3
Detroit -0.6
Las Vegas 1.8
Los Angeles 1.1
Metropolitan Area M-o-M
Miami 0.8
Minneapolis -0.1
New York -0.4
Phoenix 0.9
Portland -0.5
San Diego 0.4
San Francisco 0.7
Seattle -0.5
Tampa 0.2
Washington -0.1
3.25
3.5
3.75
4
4.25
4.5
4.75
5
5.25
30 Year Fixed Rate Mortgage History
2/2011 – 3/2013
Federal Reserve 3/1/2013
The MBA projects
30 year mortgage rates
will hit 4.4% by the end
of the year.
Mortgage Rates Moving Forward
“After reaching record lows in 2012,
mortgage rates are expected to creep up
slowly in 2013, the Mortgage Bankers
Association (MBA)predicted.”
MarketWatch 10/24/2012
Mortgage Rates - 30 year fixed
Freddie Mac 3/1/2013
3.3
3.35
3.4
3.45
3.5
3.55
3.6
12/01/2012 – 3/1/2013
Impact of Increasing Rates
Price Rate P&I
200,000 3.4 886.96
200,000 4.4 1,001.52
Monthly Savings $114.56
“If, as the Federal Open Market Committee (FOMC)
anticipates, the economic recovery continues at a moderate
pace, with unemployment slowly declining and inflation
expectations remaining near 2 percent, then long-term
interest rates would be expected to rise gradually
toward more normal levels over the next several years…
Bernanke on Interest Rates
Federal Reserve 3/1/2013
The precise timing and pace of the
increase will depend importantly on how
economic conditions develop, however,
and is subject to considerable two-sided
uncertainty.”
Housing America’s Future: New Directions for National Policy
Bipartisan Policy Center 3/1/2013
“The report proposed a reformed system of housing finance
in which the private sector plays a far more prominent role in
bearing credit risk while promoting a greater diversity of
funding sources available for mortgage financing.
The problems we face in housing are so
significant and so urgent today that inaction
is no longer a viable option… It is therefore
the commission’s hope that 2013 will be the
year that Congress and the administration
finally elevate housing to the top of the
national policy agenda and give housing
the dedicated attention it deserves.”
20%
25%
30%
35%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Percentage of Distressed Property Sales
35%
23%
NAR 2/2013
Shadow Inventory
“Shadow inventory never hit full force, so now I think
we’re at a point where the pendulum has swung
completely the other way and the housing market
needs more inventory, so 2013 would be a
serendipitous time for banks to release that inventory.”
Daren Blomquist, VP of RealtyTrac
He expects 600,000 REOs in
2013 and short sales to exceed
the 2012 number, which will
likely be around 1 million.
DSNews 2/22/2013
100 hardest hit zips in 2012
FORECLOSURES
CNN Money 2013
CoreLogic 2/28/2013
Short Sales Moving Forward
“Short sales don’t seem to be going away anytime
soon...I think 2013 and 2014 are going to be all
about the short sale.”
Wingspan Portfolio Advisors CEO Steven Horne
“I think we’re going to set a new
record for short sales in 2013.”
Rick Sharga, EVP of Carrington Mortgage
HousingWire 2/21/2013
Login to KCM and download your copy
FREE WEBINAR
www.keepingcurrentmatters.com/newmarketreality
How are you preparing for real
estate’s new market reality?
“Weary of misinformation, people
are making integrity a new form of
competitive advantage…
More important than ever to building
brand equity and differentiation, trust
has become a precious commodity.”
Building Trust is Important
Ford 2013
Resources
KEEPINGCURRENTMATTERS.COM
Slide Slide Title Link
3,4,7,8,
9
Pending Home Sales, Month’s Inventory of
Homes for Sale http://www.realtor.org
5 New Home Sales http://www.census.gov/construction/nrs/pdf/newressales.pdf
6 Political Uncertainty http://www.housingwire.com/news/2013/02/25/nabe-economic-uncertainties-remain-one-exception
10 Existing Home Inventory www.calculatedriskblog.com
11 New Home Inventory http://www.calculatedriskblog.com/2013/02/new-home-sales-at-437000-saar-in-
january.html
18 FHFA State Home Prices http://www.fhfa.gov/webfiles/25010/2012Q4HPI.pdf
19,21,
23,24,
25
S&P Case Shiller Home Price Indices, Home
Prices in the Short Term, Year Over Year Price
Increases
http://www.standardandpoors.com/indices/articles/en/us/?articleType=PDF&assetID=12
45347994966
21 Year Over Year Price Increases
http://www.lpsvcs.com/Products/CapitalMarkets/PredictiveModeling/Pages/LPSHomePri
ceIndex.aspx, http://www.lpsvcs.com/Products/CapitalMarkets/PredictiveModeling/
Pages/LPSHomePriceIndex.aspx
25, 27 30 Year Fixed Rate Mortgage History,
Mortgage Rates http://www.freddiemac.com/pmms
26, 28 Mortgage Rates Moving Forward, Impact of
Increasing Rates
http://www.marketwatch.com/story/mortgage-rates-will-rise-next-year-but-slowly-2012-
10-24
Resources
KEEPINGCURRENTMATTERS.COM
Slide Slide Title Link
29 Bernake on Interest Rates http://www.federalreserve.gov/newsevents/speech/bernanke20130301a.htm
30 Housing America’s Future http://bipartisanpolicy.org/sites/default/files/BPC_Housing%20Report_web.pdf
31 Percentage of Distressed Property Sales http://www.realtor.org
32 Shadow Inventory http://www.dsnews.com/articles/lack-of-inventory-not-shadow-is-real-concern-2013-02-
22
33 Foreclosures http://money.cnn.com/interactive/real-estate/foreclosure-rate/2013/
34 Largest Foreclosure Inventory http://www.corelogic.com/research/foreclosure-report/national-foreclosure-report-
january-2013.pdf
35 Short Sales Moving Forward http://www.housingwire.com/news/2013/02/21/mba-servicing-short-sales-stay-popular-
next-two-years
39 Building Trust is Important http://media.ford.com/images/10031/fordtrendbook2013.pdf
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