naea 08-13

KCM Divided into Three Sections

Home Price Expectation

SurveyA nationwide panel of over one hundred

economists, real estate experts and

investment & market strategists.

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

Projected Percentage Increase

Home Price Expectation Survey

Home Price Expectation Survey 7/2013

Cumulative Appreciation by 2017

Home Price Expectation Survey 7/2013

Percentage Appreciation by Survey

Home Price Expectation Survey 7/2013

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

CoreLogic 7/2013

Foreclosure Inventory by State

What Housing

Bubble?

“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

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.

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.

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.

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.

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.

Calculated Risk 7/2013

30 Year Fixed Rate Mortgage History

1/2012 – 7/2013

Federal Reserve 7/2013

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

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

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

$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)

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

Migration Patternswww.forbes.com/special-report/2011/migration.html

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

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

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

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%

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

S&P Case Shiller 7/2013

S&P Case-Shiller Home Price Indices

MARKETING

Opening Doors with

POWERFUL MARKETING

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

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

Home Price Expectation Survey 7/2013

Cumulative House Appreciation by 2017

19.4%

35%

23.7%

13.1%Pre-BubbleTrend

Bulls BearsAll Projections

Home Price Expectation Survey 7/2013

PROJECTED Percentage Appreciation

6.7%

4.2%3.6% 3.5%

2013

3.4%

2014 2015 2016 2017

“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

https://www.facebook.com/SeattleFirstTimeHomeBuyers

https://www.facebook.com/ShaunFarrellRealEstate

http://yournaperville.com/mortgage-rates-and-impact-on-buying-a-naperville-home-july-2013

XXX

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

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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