817-329-2900

Bridge Builders Master Mind

Joe New

817.329.2900

Existing Home Sales

12,521 HomesSell Every Dayand 8,715 Buyers Receive a Mortgage

NAR 2/2012

Pending Home Sales

70.0

80.0

90.0

100.0

110.0

Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan

NAR 2/2012

Month’s Inventory of Homes for Sale

NAR 2/2012

4.0

5.0

6.0

7.0

8.0

9.0

10.0

Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan

Return on Investment

MSN Money.com, Case Shiller

IHS Global Insights 2/13/2012

Projections for 2012

“For 2012, we are expecting better housing numbers than in 2011, and a better second half than first.”IHS Global Insights

Housing Wire 2/27/2012

Projections for 2012

“A lot of housing and macroeconomic data came in higher than expected so far in

2012…while jobless claims have fallen steadily this year and indications on consumer sentiment show Americans

may be ready to begin buying properties again.”

Jason Philyaw, Editor, Housing Wire

Freddie Mac 2/22/2012

Projections for 2012

“The US economy continues to build on the momentum from the end of last year. Our outlook anticipates gradual, but steady, improvement in the economy and the housing market, supported by low interest rates and brightening job market prospects.”

Frank Nothaft. Freddie Mac VP and chief economist

Moody’s Analytics 2/27/2012

Projections for 2012

“The improved tone of housing data buoys hopes that the market may be on the verge of its long-awaited recovery. ..Increases in new- and existing-home sales over the last three months follow stronger job creation and improved affordability, including the overall drop last month in conventional mortgage rates to below 4%.”

Moody’s Analytics

CNBC 2/13/2012

Warren Buffett Speaks Out

Is it time to buy real estate?

“If I had a way of buying a couple hundred thousand single-family homes I would load up on them.”

Why invest in real estate now?

“It’s a way, in effect, to short the dollar because you can take a 30-year mortgage and if it turns out your interest rate’s too high, next week you refinance lower. And if it turns out it’s too low, the other guy’s stuck with it for 30 years. So it’s a very attractive asset class now.”

Source: CNBC 2/13/2012

Warren Buffett Speaks Out

Is buying your own home better than investing in stocks right now?

“If I knew where I was going to want to live the next five or 10 years I would buy a home and I’d finance it with a 30-year mortgage… It’s a terrific deal.”

Should we buy multiple houses?

“If I was an investor that was a handy type and I could buy a couple of them at distressed prices and find renters, I think it’s a leveraged way of owning a very cheap asset now and I think that’s probably as an attractive an investment as you can make now.”

3.75

4

4.25

4.5

4.75

5

5.25

Mortgage Rates – 30 Year Fixed

Federal Reserve

1/01/2011 Today

The Move-Up Buyer

Comparison Today Current Home Move-up Home

2006 Price $500,000 $750,000

Current Price (-20%) $400,000 $600,000

Loss/Savings $100,000 $150,000

Net Gain for move-up buyer $50,000

Comparison – 5 Years Later Current Home Move-up Home

Current Price $400,000 $600,000

Future Price (+20%) $480,000 $720,000

Future Gain $80,000 $120,000

Future difference $40,000

Current Gain $50,000

Total Gain $90,000

The Move-Up Buyer

The Move-Up Buyer

Price Rate P&I

TODAY 600,000 4.40 3,004.57

2016 720,000 6.00 4,316.76

Monthly Savings 1,312.19

MSNBC.com 2/6/2012

Home Rents Will Keep Rising

“Paying rent is getting more painful for renters across the country in the face of rising demand and tight supply… $ 1 , 0 0 0

$ 1 , 0 2 5

$ 1 , 0 5 0

$ 1 , 0 7 5

$ 1 , 1 0 0

$ 1 , 1 2 5

$ 1 , 1 5 0

$ 1 , 1 7 5

$ 1 , 2 0 0

2009 2010 2011 2012* 2013* 2014*

It’s bad timing for people who have been spooked by, or pushed out of, the residential housing market and have decided to rent instead of buy. Home ownership in the United States is at historic lows, but at the same time rental prices are on the rise.”

$540K

$900K

Owners Renters

Housing Cost Over Next 30 Years*

Forbes.com 10/13/2011

RentBuy

* Assuming payment of $1,500 for both rent and mortgage; a fixed rate mortgage and an annual rent increase of 3.2% for inflation.

Forbes.com 10/13/2011

$400K

$0Owners Renters

Retirement Fund Created from

Homeowner Equity After 30 Years*

RentBuy

* Assuming $300,000 current value with a 1% annual appreciation rate for residential property.

S&P Case-Shiller Home Price Indices

S&P Case Shiller 1/31/2012

Supply & Demand

Financial Times 2/17/2012

Months Supply of Shadow Inventory

Explaining Shadow Inventory

Shadow Inventory

SALES

NationalMortgageSettlement.com

RealtyTrac 2/16/2012

Impact of Settlement

“The settlement sets forth clear guidelines for lenders and servicers to follow when foreclosing, which should allow them to push through some of the delayed foreclosures from last year.”

Brandon Moore, Chief Executive of RealtyTrac

“The settlement helps the housing market in the long run because it allows banks to proceed with millions of foreclosures that have been stalled. Many lenders have refrained from foreclosing on homes as they awaited the settlement.”Mark Vitner, a senior economist at Wells Fargo Securities

Impact of Settlement

Washington Post 2/08/2012

BusinessWeek 2/18/2012

“I think there’ll be more price weakness, because we’ll see the number of distressed sales pick up. But I think the price declines will be modest.”

Impact of Settlement

Mark Zandi, Chief Economist Moody’s Analytics

Moody’s Analytics 2/17/2012

“The latest settlement will hasten the pace of filings and push up the distress sale share of total sales over the next several quarters,

driving national house prices down another 3%.”Celia Chen, Moody’s Analytics

Price Depreciation

Shadow Inventory

1. Houses 90 Days Delinquent on the mortgage

2. Houses owned by banks but not yet ready for sale

3. Houses in the foreclosure process

S&P Case Shiller Pricing Index – 10 City

125

135

145

155

165

175

185

195

2006 2006 2006 2006 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011

2006 - 2011

Case Shiller

S&P Case Shiller Pricing Index – 10 City

0

20

40

60

80

100

120

140

160

180

200

1987 – 2011

Case Shiller

40%

37%

31% 30% 29%31% 30%

28% 29%

32%

35%

0%

10%

20%

30%

40%

50%

Percentage of Distressed Property Sales

NAR

Calculated Risk 2/15/2012

Short Sales Surging

103

274

354397

0

50

100

150

200

250

300

350

400

450

2008 2009 2010 2011

Short Sales in Thousands

“We continued to see a shift toward pre-foreclosure sales, or short sales, and away from REOs… That trend will likely show up in more local markets in 2012 as lenders recognize short sales as a better option for many of their non-performing loans.”

Short Sales Surging

RealtyTrac 2/28/2012

RealtyTrac

Type of Sale % of Value

Non-Distressed Sale 100%

Short Sale 79%

Foreclosure Sale 71%

Value by Sale Category

RealtyTrac 02/2012

DS News 2/15/2012

Mortgage Forgiveness Debt Relief Act

Obama’s 2013 budget proposal includes an extension of the Mortgage Forgiveness Debt Relief Act of 2007.

Without the Mortgage Forgiveness Debt Relief Act, debt reduced through mortgage modifications or short sales qualifies as income to the borrower and is taxable. The administration’s extension would apply to any amounts forgiven before January 1, 2015.

Resources

KEEPINGCURRENTMATTERS.COM

Slide Slide Title Link

2,3,4Existing Home Sales, Pending Home Sales, Monthly Inventory of Homes for Sales

http://www.realtor.org

5 Return on Investment www.msnmoney.com

6 Projections for 2012 http://www.ihs.com/products/Global-Insight/industry-economic-report.aspx?ID=1065932304

7 Projections for 2012 http://www.housingwire.com/article/monday-morning-cup-coffee-more-good-housing-news-tap

8 Projections for 2012 http://freddiemac.mediaroom.com/index.php?s=12329&item=122345

9 Projections for 2012 http://www.economy.com

10, 11 Warren Buffet Speaks Out http://www.cnbc.com/id/46541258

12 Mortgage Rates - 30 Year Fixed http://www.freddiemac.com/pmms

16 House Rents Will Keep Risinghttp://bottomline.msnbc.msn.com/_news/2012/02/06/10332224-office-and-home-rent-will-keep-rising-and-rising

17, 18Housing Cost Over Next 30 Years, Retirement Fund Created from Homeowner Equity After 30 Years

http://www.forbes.com/sites/investor/2011/10/12/buy-that-dream-house-now-or-wait-until-prices-fall-further

19 S&P Case-Shiller Home Price Indices http://www.housingviews.com/wp-content/uploads/2012/01/CSHomePrice_Release1.pdf

21 Months Supply of Shadow Inventory http://ftalphaville.ft.com/blog/2012/02/17/881581/the-decline-of-us-housing-inventory

Resources

KEEPINGCURRENTMATTERS.COM

Slide Slide Title Link

22 Months Supply of Shadow Inventory http://www.realtor.org/wps/wcm/connect/0556a600491cbf9b813bcd2e39654e23/Shadow_Inventory_Annual_2011_for_website.pdf?MOD=AJPERES&CACHEID=0556a600491cbf9b813bcd2e39654e23

21 S&P Case-Shiller Home Price Indices www.housingviews.com/wp-content/uploads/2012/01/CSHomePrice_Release1.pdf

25 Impact of Settlementhttp://www.realtytrac.com/content/foreclosure-market-report/january-2012-us-foreclosure-market-report-7022

26 Impact of Settlementhttp://www.washingtonpost.com/business/source-holdout-states-to-sign-mortgage-settlement-with-banks-over-foreclosure-abuses/2012/02/08/gIQA7uIvzQ_story.html

27 Impact of Settlementhttp://www.businessweek.com/news/2012-02-14/foreclosure-deal-to-spur-u-s-home-seizures-help-heal-market.html

28 Price Depreciation http://www.economy.com/dismal

30 Foreclosures in Process by State http://www.corelogic.com/about-us/researchtrends/asset_upload_file693_14120.pdf

33 Percentage of Distressed Property Sales http://www.realtor.org

34 Short Sale Surging http://www.calculatedriskblog.com/2012/02/lawler-short-sales-increased.html

35 Short Sale Surginghttp://www.realtytrac.com/content/foreclosure-market-report/q4-and-year-end-2011-us-foreclosure-sales-report-7060

37 Mortgage Forgiveness Debt Relief Acthttp://www.dsnews.com/articles/obama-proposes-extending-tax-waiver-on-mortgage-debt-forgiveness-2012-02-15

Where Are the Opportunities?

817-329-2900

Bridge Builders Master Mind

Joe New

817.329.2900