naea 11-13

KCM Divided into Three Sections

Existing Home Sales

S&P Case Shiller 10/2013

NAR 10/2013

100 = Historically Healthy Level

Pending Home Sales

“The emerging slowdown in home purchases appears to

be largely seasonal.”

Thomas PopikResearch Director for the

HousingPulse survey

Months Market Pricing

1 – 5 Sellers Appreciation

5 – 6 Even The Norm

6 + Buyers Depreciation

Months Supply & Impact on Price

Months Inventory of Homes for Sale

NAR 10/2013

5-6 Months = Normal Market Inventory

NAR 10/2013

Year-over-Year Inventory Levels

S&P Case Shiller 10/2013

Year-over-Year Change in Prices

Realtor.com’s Median List Price

Zillow’s Sales Price

0.0%

Month-Over-Month Price Changes

-0.2%

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

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

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

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

30 Year Fixed Rate

Freddie Mac 10/2013

Recent Rate Movement

2013

ta·perˈtāpər/Verb – to diminish or reduce

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

“The MBA believes rates will keep pushing upward, going…

well above 5%.”

HousingWire 10/2013

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%

RETURN ON INVESTMENTJanuary 2000 – November 2013

MSN Money.com, Case Shiller

Home Price Expectation

Survey

A nationwide panel of over one hundred

economists, real estate experts and

investment & market strategists.

Average Annual Appreciation

Home Price Expectation Survey 2013 4Q

Home Price Expectation Survey

Projected Percentage Increase

Home Price Expectation Survey 2013 4Q

Home Price Expectation Survey 2013 4Q

Cumulative Appreciation by 2018

30 Year Fixed Rate Mortgage HistoryJanuary 2012 – November 2013

Federal Reserve 11/2013

S&P Case Shiller 10/2013

S&P Case-Shiller Home Price Indices

Months Inventory of Homes for Sale

NAR 10/2013

5-6 Months = Normal Market Inventory

NAR 10/2013

35%

14%

Percentage of Distressed Property Sales

$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

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?

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

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)

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

Home Price Expectation Survey 2013 4Q

PROJECTED Percentage Appreciation

Home Price Expectation Survey 2013 4Q

Cumulative House Appreciation by 2018

23.7%

40.1%

28%

16.8%Pre-BubbleTrend

Bulls All Projections

Bears

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%

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

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