Real Estate UpdateRecap 2013 | Outlook 2014

Sue Carey, SCRP, SGMSCentury 21 Kreuser & Seiler

Flor HasselbringGriffith, Grant & Lackie Realtors

February 13, 2014

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National 2013 Recap

WASHINGTON (January 23, 2014) – Existing-home sales edged up in December, sales for all of 2013 were the highest since 2006, and median prices maintained strong growth.

Lawrence Yun, NAR chief economist, said housing has experienced a healthy recovery over the past two years. “Existing-home sales have risen nearly 20 percent since 2011, with job growth, record low mortgage interest rates and a large pent-up demand driving the market,” he said.

National Association of Realtors

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National 2013 Recap : December Units

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National 2013 Recap : Annual Unit Sales

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National 2013 Recap : December Median

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National 2013 Recap : December Buyers

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National 2013 Recap : Inventory

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National 2013 Recap : Demand

Chicago Area

Real Estate Market Update

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Chicago’s Three County Market Report

• Listing inventory is down

Lake, Cook and DuPage Counties:

• Closed and Pending Sales are up

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Chicago Area Active ListingsDecember 2012 – December 2013

Price Range Detached Single Family Inventory

Attached Single Family Inventory

< $250,000 Down 28% Down 38%

$250,000 ‐$500,000 Down 6% Down 4%

$500,000 ‐$1,000,000 Down 6% Down 2%

$1,000,000 + Down 4% Down 4%

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Chicago Area Pending ListingsDecember 2012 – December 2013

Price Range Detached Single Family Pending

Attached Single Family Pending

< $250,000 Up 9% Up 1%

$250,000 ‐ $500,000 Up 22% Up 16%

$500,000 ‐ $1,000,000 Up 13% Up 38%

$1,000,000 + 0% Up 44%

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Price Range Detached Single Family Closed Units

Attached Single Family Closed Units

< $250,000 Up 5% Even

$250,000 ‐ $500,000 Up 28% Up 38%

$500,000 ‐ $1,000,000 Up 59% Up 31%

$1,000,000 + Up 25% Down 2.2%

Chicago Area Closed ListingsDecember 2012 – December 2013

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Chicago Area Median Closed PriceDecember 2012 – December 2013

Price RangeDetached Single 

Family Median Closed $

Attached Single Family Median Closed 

$

< $250,000 Up 6.0% $132,500

Up 24%$114,700

$250,000 ‐ $500,000 Down 2%$330,000

Up 4.0%$349,500

$500,000 ‐ $1,000,000 Down 1%$645,000

Up 1%$615,000

$1,000,000 + Up 8%$1,385,000

Down 11%$1,465,000

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Chart of Dow Jones Industrials 1/1/13-12/31/13

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The Suburban Luxury Market

School DistrictOr Area

Million Dollar Home Sales/Unit Change

2013 Average $/ Price Gain

Lake Forest High SchoolDistrict 115 117 Units / 43% $1,669,248 / 3.5%

New Trier High SchoolDistrict 203 366 Units / 80%  $1,620,265  /‐1%

Hinsdale Central High School District 83 225 Units / 48% $1,552,121 / 1%

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Chicago Area MSIDecember 2012 – December 2013

Price RangeDetached Single 

Family Months Supply of Inventory

Attached Single Family Months Supply of 

Inventory

< $250,000 Down 39%To 4.5 Months

Down 47%To 3.7 Months

$250,000 ‐ $500,000 Down 30%To 5.5 Months

Down 2%To 5.0 Months

$500,000 ‐ $1,000,000 Down 22%To 8.3 Months

Down 38% To 4.6 Months

$1,000,000 + Down 9%To 15 Months

Down 41% To 5.5 Months

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The Distressed Market is Shrinking

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Chicago Area Rental Market

Type of Rental Property

Median Rental Price Last 3 Months

Months Supply of Rental Inventory

3 Bedroom Detached Home $1,650|942 units 2.4 Months

4 Bedroom Detached Home $2,150 | 480 units 2.5 Months

2 Bedroom Attached Outside City Limits $1,275 | 1,154 units 2.5 Months

2 Bedroom Attached Inside City Limits $1,795| 1,207 units 1.9 Month

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Chicago Area Summary

• The Inventory of Good Quality Active Listings is Shrinking.

• Prices Will Likely Increase as Demand Stays Strong and Supply Remains Steady or Decreases.

• Rental Inventory is Low and Prices Will Continue to Climb.

• It is Very Important to Enter the Market Equipped with Advance Knowledge of Conditions Prepared to Make Decisions Quickly.

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Select City Snapshot from RDC®Q4 Year over Year Recap

City Average Detached Closed $ Q4 2013

Average Detached Closed $ Q4 2012

Q4 2013            Avg DOM | MSI

SF 3+ BRRent

Atlanta $267,000 $233,000 60 DOM | 3.5 MSI $1650

Boston $690,200 $547,600 54 DOM | 2.3 MSI $3000

Charlotte $222,200 $208,700 138 DOM | 5.4 MSI $1500

Dallas/Ft Worth $232,600 $195,500 59 DOM | 2.6 MSI $1900

Los Angeles $683,500 $568,200 54 DOM | 1.2 MSI $2400

San Francisco $1,270,000 $1,158,000 33 DOM | 0.2 MSI $5000

Source: RelocationDirectorsCouncil.org members: Berkshire Hathaway Home Service Georgia Properties; William Raveis Real Estate; Wilkinson & Assoc ERA Powered; Ebby Halliday; Winkelman Realty; and Alain Pinel Realtors

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Outlook 2014

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The Rental Dilemma

Short Term vs Mid Term vs Long Term

Profile of the Renter Inventory Levels

Length of Lease Budget

Resources (Realtor, Craig’s List, Zillow, Reader) Reliability and Representation

School Districts

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The Rental Dilemma

4th Quarter Data from Reis Inc.

Rental vacancies around the country continue to tighten; currently at 4.1%

Chicago had a 3.7% vacancy at year-end

Overall, rents are at the highest level seen

Where the labor market is strong – Seattle, San Francisco, Denver, Austin, New York – rents are growing by 4 to 7% on a year/year basis

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Wrap Up according to NAR

• Slight increase in unit sales to 5.11 million; up from 5.09 in 2013– Supply will struggle to keep up with demand; need a 5-6 mo supply

• A 5.3% increase in median home sale prices year over year

• Unemployment is expected to drop from 7.4% to 6.8%

• Consumer Confidence will hit a high of 81 in 2014, up from an index of 73 in 2013

• Continued reduction of distressed sales; according to the Federal Reserve, homeowner’s net equity holdings soared by $2.2 trillion dollars between Q3 2012 and Q3 2013

– KCM Crew referenced a 7.9% growth in home equity in the past 12 mos.

QUESTIONS?

Perhaps you’d consider listing your home for sale this year?

Thank you for attending.