2012 UNCW Economic Outlook Conference

Residential Real EstateMarket Brief

NATIONAL SALES

UP 9%

HOUSING MARKET SHOWING STRENGTH

% Change vs Last Year

LOCAL SALES

UP 18%

30 YR INTEREST RATE

DOWN .65 POINTS

NATIONAL MEDIAN PRICES

UP 9%

NATIONAL INVENTORY

DOWN 18%

NATIONAL % OF DISTRESSED SALES

DOWN 11%

LOCAL % OF DISTRESSED SALES

DOWN 3%

LOCAL MEDIAN PRICES

DOWN 1%

LOCAL INVENTORY

DOWN 3%

U.S. HOUSING SUMMARY 2012 (In Millions)

Source: John Burns Real Estate Consulting

133 Housing

Units

120 Households

Occupied

13 Vacant

79 Owned

41 Rented

26 No Mortgage

53 with Mortgage

41 with Equity

12 Negative Equity

2.530-60 days delinquent

4.190+ days or in

foreclosure

5.4 current

Supply & Demand

Case Shiller Pricing Index

2000 2003 2012

According to the S&P Case Shiller price index, residential real estate values have returned to 2003 first quarter prices. That, in itself, says something. However, when you factor in mortgage rates, the case for buying a home today becomes even more compelling.

2006

Month’s Inventory of Homes for Sale

NAR

Months Supply Pricing

1-2 Double Digit Appreciation

3-4 Single Digit Appreciation

5-6 Balanced

7-8 Single Digit Depreciation

9+ Double Digit DepreciationBU

YE

RS

M

AR

KE

TS

EL

LE

RS

M

AR

KE

T

02468

1012141618

Wilmington AreaNational

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

Source 2012 2013 2014Home Price

Expectation Survey -.4 1.4 2.6Urban Land

Institute Flat 2.0 3.5Demand Institute

Study 1.0 1.8 2.5

Projected Annual % Change in Home Prices

Case Shiller Pricing Index

2000 2006 2024

At 3% gain per year, it would take 12 years for current

prices to return to 2006 levels

2012

As long as distressed homes remain a significant portion of homes for sale, prices for non-distressed homes will be under pressure to converge with distressed prices.

Continued Pressure on Prices

Radar Logic 5/31/2012

Existing Home Sales

12,247 HomesSell Every Dayand 8,940 Buyers Receive a Mortgage

NAR 5/2012

Mortgage Rates – 30 Year Fixed

Federal Reserve

1/01/2011 Today

YearMortgage Payment

(2011 Dollars)

Payment-to-Income Ratio

Payment-to-Rent Ratio

1990 $1,183 .28 1.45

2000 $1,125 .24 1.37

2006 $1,240 .28 1.44

2011 $669 .15 .77

Joint Center For Housing Studies Of Harvard University 6/2012

Cost of Owning a Home (Last 20yrs)

Where Do You Want to Invest Your $ Over the Next 12 Years?

MSN Money.com, Case Shiller