2017 U.S. Economic & Housing Market Update

WHERE REAL ESTATE IS MOVING

2017 U.S. Economic & Housing Market Update

© 2016 Ten-X, LLC. Confidential & Proprietary

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What We’ll Cover Today

¨ US Economic Overview

¨ Existing and New Home Sales

¨ State of the Foreclosure Market

¨ The Mortgage Market

¨ Closing Thoughts

A Brief Introduction to Ten-X

The Leading Online Real Estate Marketplace

NUMBERS

$46 BillionOf assets sold

275,000+Assets sold

INVESTORS MILESTONES2007Company founded

2016Ten-X

2009CRE platform


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The Ten-X Brand Family

Ournewname,Ten-X,reflectsexpansionoftheserviceswe’llbedelivering– andthemuchbroaderaudiencewe

plantoreachviathreedistinctlinesofbusiness.

Dedicatedtothesaleofqualitycommercial

propertiesviaauctionandmoretraditionalmethods

Anewplatformcreatedespeciallyforconsumersandagents,withafocusonmove-inreadyhomes

Thenation’slargestonlinerealestatemarketplace,nowexclusivelyfocusedonthesaleofbank-ownedandforeclosureproperties

US Economic Overview


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GDP Stable, but Still Lags Historic Averages


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Inflation in Line with Market Expectations


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Unemployment Rate Continues to Improve


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Labor Force Participation Rate Still Historically Low


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And Part Time Employment Historically High


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Wage Growth Appears to be Steady


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And Consumer Confidence Highest Since 2000

National Housing Market Overview


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Existing Home Sales Ticking Up


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New Home Sales Improving, But Uneven


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Existing Home Inventory Historically Low


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New Home Inventory Improving, But Near 40-Year Low

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Housing Starts Improving…


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But Lagging Behind Prior Recoveries…


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…and Inflated by Multifamily Numbers


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Prices Continue to Rise, Outpacing Wage Growth


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And Affordability is Becoming More of a Concern

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Homeownership Rates Still Near 50-Year Low


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Even Though Household Formation Is Picking Up

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Student Loan Debt a Factor in Household Formation

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Foreclosure Market Update


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Delinquency Rates Continue to Fall


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Foreclosure Starts Declining Rapidly


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Monthly Foreclosure Activity Trending Down

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And Overall Foreclosure Activity Approaches Normal Levels


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Percentage of Loans in Foreclosure Lowest Since 2006


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Distressed & Cash Sales Declining, but Still Above Norm

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The Mortgage Market


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Mortgage Rates are Finally Rising…


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…But are Still Near Their Historic Lows


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Refinance Activity Falling Fast


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Purchase Activity May Not be Enough to Offset Drop


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But as Rates Rise, Credit May Loosen

International Investors


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International Buyers Account for Over $100 Billion

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China, Canada Dominate Purchases


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But Interest is Strong from Around the World

Closing Thoughts


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Closing Thoughts

¨ 2017 will look very much like 2016¨ Between 5.5-5.6 million existing home sales, and 650,000-700,000 new home sales¨ Prices should rise 5-6%

¨ Inventory weak across the board¨ Lackluster construction, underwater borrowers, declining distressed inventory

¨ Affordability may become a problem¨ Prices continue to outpace wage growth

¨ Household formation slower than expected¨ Lack of starter homes, generational tendencies, and credit availability may skew numbers towards rentals¨ Latino buyers – the fastest growing segment – pose challenges for lenders

¨ Foreclosure crisis finally over¨ Activity should be at normal levels by late 2017¨ Possible that levels will dip below historical norms¨ Note sales by GSEs, major lenders accelerating recovery

¨ Unlikely to hit “full recovery” until late 2018 at the earliest

Thank You!

Rick Sharga

Executive Vice President, Ten-X

[email protected]

@ricksharga