2013 california housing market update and san diego area
TRANSCRIPT
2013 CALIFORNIA HOUSING MARKET OUTLOOK
California Community Colleges Real Estate Educator’s Conference February 22, 2013Sara Sutachan, Manager of Broker and Real Estate Finance Outreach
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THE ECONOMY
Signs of General Economic Recovery
1. Fiscal cliff (and recession “relapse”) avoided 2. December Jobs report exceeded expectations3. Unemployment rate at 7.8%4. Fed will keep rates low until U = 6.5% 5. “QE” (Quantitative Easing) continues6. Euro-zone still holding it together despite
stagnant/negative growth
“Fiscal Cliff Agreement”
1. Tax Rates on income and capital gains/dividends higher for individuals making $400K or households making $450K
2. Estate tax increases for individual estates over $5M and family estates over $10m
3. 2% payroll tax cut expired as scheduled4. LT unemployment benefits extended for 1 year5. Mortgage debt forgiveness extended for 1 year6. AMT patch for middle class7. “Pease Limitation” on itemized deductions reinstituted
for $250 AGI or couples making $300 AGI (above limit X 3%)
2005
2006
2007
2008
2009
2010
2011
2012
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
Q2-12
Q3-12
Q4-12
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
GDP: Sub-Par Growth, Sluggish Recovery 2012: 2.2%; 2012 Q4: -0.1%
ANNUAL PERCENT CHANGE, CHAIN-TYPE (2005) $
ANNUALLY QUARTERLY
2009 Largest Annual Drop since 1938 (-3.4%)
Personal Consumption2012 Q4: 2.2%
-6%
-4%
-2%
0%
2%
4%
6%QUARTERLY PERCENT CHANGE
SOURCE: US Dept of Commerce, Bureau of Economic Analysis
Consumers Weary, De-Leveraging Consumer Confidence Reflects Economic Realities
January 2013: 58.6
Jan-0
5Ju
l-05
Jan-0
6Ju
l-06
Jan-0
7Ju
l-07
Jan-0
8Ju
l-08
Jan-0
9Ju
l-09
Jan-1
0Ju
l-10
Jan-1
1Ju
l-11
Jan-1
2Ju
l-12
Jan-1
30
20
40
60
80
100
120
INDEX, 100=1985
Unemployment Rates Coming DownCalifornia (9.8%) vs. United States (7.8%)
Jan-0
5Ju
l-05
Jan-0
6Ju
l-06
Jan-0
7Ju
l-07
Jan-0
8Ju
l-08
Jan-0
9Ju
l-09
Jan-1
0Ju
l-10
Jan-1
1Ju
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Jan-1
2Ju
l-12
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14% US-CA CA US
SOURCE: CA Employment Development Division
Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12-1,000,000
-800,000
-600,000
-400,000
-200,000
0
200,000
400,000
600,000
800,000
Only 54% of Lost Jobs Replaced to Date
SOURCE: CA Employment Development Division
U.S. Jobs: Month to Month ChangesRecession Job Losses: 8.8 million
Since Jan’10: +4.5 million
CA Employment By RegionStrongest Regional Economy: SF Bay Area
SOURCE: CA Employment Development Division
Nov 2012 Nov 2011 Change % ChangeSouthern California 8,026.9 7,902.1 124.8 1.6%Bay Area 3,197.6 3,104.3 93.3 3.0%Central Valley 1,877.9 1,858.1 19.8 1.1%Central Coast 491.8 477.5 14.3 3.0%North Central 129.5 127.2 2.3 1.8%CALIFORNIA 14,406.4 14,137.8 268.6 1.9%
(Thousands)Nonfarm Employment (Thousands)
SoCal Regions:Employment
Oct 2012 Oct 2011 Change % ChangeLos Angeles 3,885.3 3,827.5 57.8 1.5%Orange County 1,404.4 1,383.9 20.5 1.5%Riverside/SB 1,144.2 1,136.9 7.3 0.6%San Diego 1,261.6 1,238.1 23.5 1.9%Ventura 279.0 275.0 4.0 1.5%Southern California Total 7,974.5 7,861.4 113.1 1.4%
(Thousands)
Nonfarm Employment (Thousands)
SOURCE: California Economic Development Dept.
CPI : Inflation a No Show – For NowDecember 2012: All Items +1.7% YTY; Core +1.9% YTY
Jan-0
5Ju
l-05
Jan-0
6Ju
l-06
Jan-0
7Ju
l-07
Jan-0
8Ju
l-08
Jan-0
9Ju
l-09
Jan-1
0Ju
l-10
Jan-1
1Ju
l-11
Jan-1
2Ju
l-12
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6% All Items Core
PERCENT CHANGE FROM A YEAR AGO
SOURCE: U.S. Bureau of Labor Statistics
2013: The Year of the “Political Economy”
1. Fiscal Cliff Averted but Tax and Spend Decisions Await – 60 Day Deadline
2. Tax Reform: Mortgage Interest DeductibilityMortgage Debt Forgiveness
3. Future of Fannie and Freddie4. Future of FHA
Fiscal Cliff Averted: But in 60 days automaticspending cuts will be back unless….
Source: Office of Management & Budget2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012e
10
12
14
16
18
20
22
24
26
Receipts Outlays
Federal Budget Receipts & Outlays as Percentage of GDP
Signs of U.S. Housing Recovery
1. Prices have bottomed! 2. Home equity up 20% last year to $7.71Trillion as
rising prices begin to reverse negative equity 3. New and Existing Home Sales at four- year highs 4. Low inventory across the board5. Housing starts at four-year high6. Threat of shadow inventory fading as
delinquencies, foreclosures decline7. Foreclosure starts at 6 year low
Mortgage Rates @ 50 Year Lows
Jan-0
5Ju
l-05
Jan-0
6Ju
l-06
Jan-0
7Ju
l-07
Jan-0
8Ju
l-08
Jan-0
9Ju
l-09
Jan-1
0Ju
l-10
Jan-1
1Ju
l-11
Jan-1
2Ju
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Jan-1
30%
1%
2%
3%
4%
5%
6%
7%
8% FRM ARM Federal Funds
SOURCE: Federal Home Loan Mortgage Corporation
CA Prices Still Below Trend LineSpells Opportunity
(1970-2013)19
7019
7219
7419
7619
7819
8019
8219
8419
8619
8819
9019
9219
9419
9619
9820
0020
0220
0420
0620
0820
1020
12
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
CaliforniaCA Price TrendUS
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Housing Affordability at Record HighsQ
1 20
05Q
2 20
05Q
3 20
05Q
4 20
05Q
1 20
06Q
2 20
06Q
3 20
06Q
4 20
06Q
1 20
07Q
2 20
07Q
3 20
07Q
4 20
07Q
1 20
08Q
2 20
08Q
3 20
08Q
4 20
08Q
1 20
09Q
2 20
09Q
3 20
09Q
4 20
09Q
1 20
10Q
2 20
10Q
3 20
10Q
4 20
10Q
1 20
11Q
2 20
11Q
3 20
11Q
4 20
11Q
1 20
12Q
2 20
12
0%
10%
20%
30%
40%
50%
60%
70%
80% CA US
% OF HOUSEHOLDS THAT CAN BUY
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
But there a few issues…
1. Mortgage rates are low but credit is tight2. “Defensive” Lending is prevalent3. Appraisals lagging today’s market4. Listings are scarce:
• Underwater homeowners are stuck• Investors are renting instead of flipping• Some sellers still don’t get it
Fannie & Freddie are the Market Today87% of loans are purchased by the GSE’s
Source: LPS CoreLogic
FHA Pricing Changes: 175bps Upfront Fees + 135bps MIP
Pricing ChangesEffective Date
Action New Insurance Premium
Mortgage Letter
Date Announced
FHA Share Primary MI
05-Apr-10 Increase up front MIP
225bps ML 2010-12 21-Jan-10 69.8%
04-Oct-10 Raise Upfront MIP
100 bps ML 2010-28 01-Sep-10 63.1%
Lower annual MIP
0 bps to 90 bps
18-Apr-11 Increases annual MIP by 25 bps
25 bps to 115 bps
ML 2011-10 14-Feb-11 61.3%
09-Apr-12 Raise annual MIP 10 bps
35 bps to 125 bps
ML 2012-04 06-Mar-12 45.6%
Add 25 bps for FHA jumbo
60 bps to 150 bps
Source: Inside FHA Lending
FHA Price Changes Cont…Pricing ChangesEffective Date
Action New Insurance Premium
Mortgage Letter
Date Announced
FHA Share Primary MI
Add 25 bps for FHA jumbo
60 bps to 150 bps
Upfront MIP increased 75 bps
175 bps
11-Jun-12 Lower MIP for streamlined refi
55bps ML 2012-04
06-Mar-12 42.3%
Lower annual MIP for streamlined refi
1 bps
01-Apr-13 Raise annual MIP 10 bps
45 bps to 155 bps
ML 2013-04
31-Jan-13
FHA Underwriting ChangesUnderwritingChanges
Effective Date
Action Mortgage Letter
Date Announced
FHA Share Primary MI
27-May-10 Allows streamlined refinances to be processed in TOTAL scorecard
ML 2010-19 27-May-10 69.8%
07-Sep-10 Eliminates combined LTV ratio limits implemented in 2007
ML 2010-24 06-Aug-10 66.3%
07-Sep-10 Eliminates requirement that sum of all liens be less than max loan limit
ML 2010-36 22-Oct-10 66.3%
04-Oct-10 Limits LTV ratios for borrowers with FICO scores below 580
ML 2010-29 03-Sep-10 63.1%
14-Feb-11 Clarifies FHA refinance mortgages must be current month before closing
ML 2011-11 14-Feb-11 61.5%
Source: Inside FHA Lending
FHA Underwriting Changes Cont…
UnderwritingChanges
Effective Date
Action Mortgage Letter
Date Announced
FHA Share Primary MI
Clarifies net tangible benefit for FHA streamlined refinances
11-Sep-11 Clarifies annual MIP is zero for 15-year mortgages with LTV below 78%
ML 2011-35 53.1%
13-Mar-12 Various changes in FHA refi program for underwater mortgages
ML 2012-05 13-Mar-12 47.9%
01-Apr-13 Requires manual underwriting if FICO below 620 and DTI over 43%
ML 2013-05 31-Jan-13
Source: Inside FHA Lending
Average Credit Score Increased 26 points since 2005 For Purchase Loans
2005 2006 2007 2008 2009 2010 2011 2012*700
705
710
715
720
725
730
735
740
745AVERAGE FICO PURCHASE LOANS
SOURCE: CoreLogic *2012 through Feb
What Private Capital Investors Are Pursuing Today: Transparency!
Source: Sequoia Mortgage Trust 2013-2
Fico Range # Loans WA FICO WA LTV % WA CLTV % % Total Balance660-679 7 669 59 65 1.3680-699 8 692 67 68 1.6700-719 19 711 62 63 2.5720-739 73 731 66 68 8.9740-759 86 751 63 65 10.1760-779 186 771 65 68 24.5780-799 277 790 61 63 36.3800-819 119 805 62 65 14.5820-850 2 823 69 69 0.3Grand Total 777 773 63 65 100
Credit Score Distribution of Latest Sequoia Mortgage Trust (SEMT)
Share of Underwater Mortgages Dropping as Prices Rise and Short Sales Close
SOURCE: CoreLogic
Q4-2009
Q1-2010
Q2-2010
Q3-2010
Q4-2010
Q1-2011
Q2-2011
Q3-2011
Q4-2011
Q1-2012
Q2-2012
Q3-2012
0%
5%
10%
15%
20%
25%
30%
35%
40%
28.3%
4.5%
Negative Equity Share in CA Near Negative Equity Share in CA
29% of CA Mortgages are Underwater15.6% over 125% LTV
100%
to 1
04%
105%
to 1
09%
110%
to 1
14%
115%
to 1
19%
120%
to 1
24%
125
to 1
49%
150%
to 2
24%
225%
+0%
2%
4%
6%
8%
10%
3.6% 3.0% 2.6% 2.3% 2.0%
7.3% 7.1%
1.2%
US CA
Loan-To-Value
SOURCE: CoreLogic
THE CALIFORNIA RESIDENTIAL REAL ESTATE MARKET
THOUSANDS
C.A.R. Membership Off 50,000+ From Peak
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
0
50,000
100,000
150,000
200,000
250,000
Home Sales Membership1970-2011
Dollar Volume of Sales Slowly Improving Up 16.5% in 2012, Up 7.0% in 2013
2005 2006 2007 2008 2009 2010 2011 2012p 2013f$0
$50
$100
$150
$200
$250
$300
$350
$400
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
$327
$266
$194
$154 $150 $150 $142 $166 $178
$ Volume of Sales Percent Change
% Change$ in Billion
-54%
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Sales of Existing Detached Homes and Pacific West Consumer ConfidenceCalifornia, January 2013 Sales: 491,720 Units, Down 3.9% YTD, Down 3.9% YTY
Jan-0
5Ju
l-05
Jan-0
6Ju
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Jan-0
7Ju
l-07
Jan-0
8Ju
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Jan-0
9Ju
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Jan-1
0Ju
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Jan-1
1Ju
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Jan-1
2Ju
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Jan-1
30
100,000
200,000
300,000
400,000
500,000
600,000
700,000
0
20
40
60
80
100
120
140Sales Consumer Confidence
SOURCE: California Association of REALTORS®; The Conference Board
*Sales are seasonally adjusted and annualized
INDEXUNITS
History of CA Housing Recovery in One Slide! Share of Equity, RE and Short Sales 2009 - 2012
0%
10%
20%
30%
40%
50%
60%
70%63.6%
25.0%
10.9%
Equity Sales Short Sale REO
SOURCE: California Association of REALTORS®
Median Price of Existing Detached HomesCalifornia, January : $337,040, Up 24.1% YTY
Jan-0
5Ju
l-05
Jan-0
6Ju
l-06
Jan-0
7Ju
l-07
Jan-0
8Ju
l-08
Jan-0
9Ju
l-09
Jan-1
0Ju
l-10
Jan-1
1Ju
l-11
Jan-1
2Ju
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Jan-1
3 $-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000 P: May-07$594,530
T: Feb-09$245,230-59% frompeak
SOURCE: California Association of REALTORS®
November OctoberCore Logic Home Price Index 7.1% (f) 6.3%Zillow Home Value Index 5.2% 4.7%Radar Logic Home Price Index NA* 6.9%Existing-Homes, Median Sales Price 10.1% 11.1%New Homes, Median Sales Price 15.3% 5.7%Trulia Asking Price Index 3.8% 3.6%
3rd Quarter 2nd QuarterFHFA Quarterly House Price Index 4.0% 2.0%Case-Shiller Home Price Index 0.3% (f) 1.2%
Year Over Year % IncreaseHome Price Measure
National Home Price Measures:Prices Have Hit Bottom and Are Rising
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
(f) – Forecast* Data available 1/24/13.
Trough vs. Current Price – January 2013Region Trough
MonthTrough Price
Jan-13 Median
% Chg From Trough
Monterey Region Mar-09 $241,025 $399,073 65.6%Palm Springs/Lower Desert Apr-09 $150,140 $228,930 52.5%Santa Clara Feb-09 $445,000 $652,500 46.6%San Francisco Bay Area Feb-09 $378,520 $548,890 45.0%Los Angeles May-09 $248,850 $349,720 40.5%Riverside/San Bernardino Apr-09 $150,860 $207,530 37.6%CALIFORNIA Feb-09 $245,230 $337,040 37.4%Orange County Jan-09 $442,170 $566,500 28.1%High Desert May-09 $106,210 $132,660 24.9%Sacramento Jan-12 $162,290 $201,010 23.9%Ventura Feb-09 $359,630 $440,670 22.5%San Luis Obispo Feb-11 $328,750 $398,980 21.4%San Diego Mar-09 $326,832 $390,890 19.6%Northern Wine Country Nov-11 $310,570 $367,672 18.4%Northern California Jan-12 $210,280 NA NA
SOURCE: California Association of REALTORS®
Unsold Inventory IndexCalifornia, January 2013: 3.5 Months
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Note: “Unsold Inventory Index” represents the number of months it would take to sell the remaining inventory for the month in question. The remaining inventory for the month is defined as the number of properties that were “Active”, “Pending”, and “Contingent” (when available) and divide the sum by the number of “Sold” properties for the month in question.
Jan-0
5Ju
l-05
Jan-0
6Ju
l-06
Jan-0
7Ju
l-07
Jan-0
8Ju
l-08
Jan-0
9Ju
l-09
Jan-1
0Ju
l-10
Jan-1
1Ju
l-11
Jan-1
2Ju
l-12
Jan-1
30
2
4
6
8
10
12
14
16
18
Price Range (Thousand) Jan-13 Dec-13 Jan-13
$1,000K+ 9.0 4.4 13.8$750-1000K 5.0 2.9 8.8$500-750K 3.4 2.3 7.0$300-500K 3.1 2.3 5.9$0-300K 3.0 2.4 5.0
Unsold Inventory Index (Months)
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Note: “Unsold Inventory Index” represents the number of months it would take to sell the remaining inventory for the month in question. The remaining inventory for the month is defined as the number of properties that were “Active”, “Pending”, and “Contingent” (when available) and divide the sum by the number of “Sold” properties for the month in question.
Equity Sales REO Sales Short Sales0
1
2
32.7
1.9
2.4
Unsold Inventory Index (Months)
Tight Supply of Inventory, Especially for REO Sales
California: December 2012
SOURCE: California Association of REALTORS®
Extremely Low Levels of Active Listings at the State Level
Equity Sales REO Sales Short Sales0
1
2
3
4
1.7
1.00.7
Unsold Inventory Index (Months)
SOURCE: California Association of REALTORS®
Shadow Inventory
The CA Foreclosure Funnel:
9.9 Million Homes
7.4 Million Mortgages
2.1 Million Underwater
.com/CAR
613,000/18,000 = 34 months of Inventory
435,000 Delinquent
117,000 in Foreclosure
61,000 Bank Owned
18,000 Distressed Sales
.com/CAR
Jan-0
7
May-0
7
Sep-07
Jan-0
8
May-0
8
Sep-08
Jan-0
9
May-0
9
Sep-09
Jan-1
0
May-1
0
Sep-10
Jan-1
1
May-1
1
Sep-11
Jan-1
2
May-1
2
Sep-12
Jan-1
30
10,000
20,000
30,000
40,000
50,000
60,000
70,000 Notice of Trustee Sale - Counts Notice of Defaults - Counts
California Foreclosure Filings, Jan. 2013NTS: 9356 , -64.6% YTD • NOD: 4,748, -76.4% YTD
SOURCE: ForeclosureRadar.com
6 Month Average:
NTSs: 15,142
NODs: 12,542
Jan-0
7
May-0
7
Sep-07
Jan-0
8
May-0
8
Sep-08
Jan-0
9
May-0
9
Sep-09
Jan-1
0
May-1
0
Sep-10
Jan-1
1
May-1
1
Sep-11
Jan-1
2
May-1
2
Sep-12
Jan-1
30
5,000
10,000
15,000
20,000
25,000
30,000 REOs Sold to 3rd Party Cancellations
California Foreclosure Outcomes, Jan. 2013REO: -67.9% YTD • 3rd Party: -34.6% YTD • Cancel: +18.1% YTD
SOURCE: ForeclosureRadar.com
6 Month Average:
REO: 4,544
3rd Party: 3,063
Cancelled: 14,007
• Preforeclosure: 817 • Auction: 963 • Bank Owned: 248
901 Camino Del Rio South, 10 Mile Radius
Source: ForeclosureRadar.com as of 02/19/13.
• Preforeclosure: 28 • Auction: 36 • Bank Owned: 9Lemon Grove
Source: ForeclosureRadar.com as of 02/19/13.
• Preforeclosure: 6 • Auction: 9 • Bank Owned: 0Coronado
Source: ForeclosureRadar.com as of 02/19/13.
• Preforeclosure: 848 • Auction: 1,014 • Bank Owned: 253San Diego
Source: ForeclosureRadar.com as of 02/19/13.
REGIONAL/LOCAL REAL ESTATE MARKETS
LEMON GROVE
Sales of Single Family Homes• Lemon Grove, January 2013: 19 Units • Up 72.7% MTM, Up 58.3% YTY
SOURCE: Clarus Market Metrics
Median Price of Single Family Homes• Lemon Grove, January 2013: $290,000• Up 22.6% MTM, Up 14.2% YTY
SOURCE: Clarus Market Metrics
For Sale Properties• Lemon Grove, January 2013: 54 Units• Down 18.2% MTM, Down 48.1% YTY
SOURCE: Clarus Market Metrics
Note: “For Sale Properties” represents the overall supply that exist throughout the entire month, including any listings that appear as “Active” any point in time during the month.
Month’s Supply of Inventory • Lemon Grove, January 2013: 1.9 Months
SOURCE: Clarus Market Metrics
Note: “Month’s Supply of Inventory” represents the number of months it would take to sell the remaining inventory for the month in question. The remaining inventory for the month is defined as the number of properties that were “For Sale” on the last day of the month in question. The inventory figure is then divided by the number of properties that went Under Contract during the month.
CORONADO
Sales of Single Family Homes• Coronado, January 2013: 4 Units • Down 66.7% MTM, Down 75.0% YTY
SOURCE: Clarus Market Metrics
Median Price of Single Family Homes• Coronado, January 2013: $1,337,500• Down 3.6% MTM, Up 7.6% YTY
SOURCE: Clarus Market Metrics
For Sale Properties• Coronado, January 2013: 110 Units• Down 2.7% MTM, Up 4.8% YTY
SOURCE: Clarus Market Metrics
Note: “For Sale Properties” represents the overall supply that exist throughout the entire month, including any listings that appear as “Active” any point in time during the month.
Month’s Supply of Inventory • Coronado, January 2013: 5.4 Months
SOURCE: Clarus Market Metrics
Note: “Month’s Supply of Inventory” represents the number of months it would take to sell the remaining inventory for the month in question. The remaining inventory for the month is defined as the number of properties that were “For Sale” on the last day of the month in question. The inventory figure is then divided by the number of properties that went Under Contract during the month.
SAN DIEGO
Sales of Single Family Homes• San Diego, January 2013: 464 Units • Down 30.4% MTM, Up 2.9% YTY
SOURCE: Clarus Market Metrics
Median Price of Single Family Homes• San Diego, January 2013: $430,000• Down 6.5% MTM, Up 16.2% YTY
SOURCE: Clarus Market Metrics
For Sale Properties• San Diego, January 2013: 1,949 Units• Down 0.4% MTM, Down 39.5% YTY
SOURCE: Clarus Market Metrics
Note: “For Sale Properties” represents the overall supply that exist throughout the entire month, including any listings that appear as “Active” any point in time during the month.
Month’s Supply of Inventory • San Diego, January 2013: 1.5 Months
SOURCE: Clarus Market Metrics
Note: “Month’s Supply of Inventory” represents the number of months it would take to sell the remaining inventory for the month in question. The remaining inventory for the month is defined as the number of properties that were “For Sale” on the last day of the month in question. The inventory figure is then divided by the number of properties that went Under Contract during the month.
CALIFORNIA HOUSING MARKET FORECAST
Forecast Report Card
Source: CALIFORNIA ASSOCIATION OF REALTORS®
Forecast Date: October 2012 vs. September 2011
2011 Projected
September 2011 2011 Actual2012 Forecasted September 2011
2012 Projected
SFH Resales (000s) 491.1 497.9 496.2 523.3
% Change -0.1% 1.1% 1.0% 5.1%Median Price ($000s) $291.0 $286.0 $296.0 $317.0
% Change -4.0% -6.2% 1.7% 10.9%
California Housing Market Outlook
Indicator 2008 2009 2010 2011 2012p 2013f
SFH Resales (000s) 441.81 546.86 492.29 497.86 523.25 530
% Change 27.3% 23.8% -10.0% 1.1% 5.1% 1.3%Median Price ($000s) 348.5$ 275.0$ 305.0$ 286.0$ 317.0$ 335.0$
% Change -37.8% -21.1% 10.9% -6.2% 10.9% 5.7%
30-Yr FRM 6.0% 5.1% 4.7% 4.5% 3.8% 4.0%
1-Yr ARM 5.2% 4.7% 3.5% 3.0% 2.8% 2.8%
Recovery Will Continue in 2013, with Both Sales and the Median Price Up
Units (Thousand)
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
2005
2006
2007
2008
2009
2010
2011
2012p
2013f
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
523,250.0530,000.0
Sales of Existing Detached Homes
2005
2006
2007
2008
2009
2010
2011
2012p
2013f
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$317,020
$335,000
Median PricePrice
(Thousand)
When will CA Start Building Again? 2012(p): 52,000 units, Up 10.4% from 2011
2005 2006 2007 2008 2009 2010 2011 2012P 0
50,000
100,000
150,000
200,000
250,000
Single Family Multi-Family
Household Growth: 220,000-250,000/yr.
SOURCE: Construction Industry Research Board
CLOSING THOUGHTS
Presentation Take - Aways
1. Worst of the recession is over but recovery will continue to be sluggish
2. Tax and spend debate critical next 60 days3. Rates low until Unemployment rate reaches 6.5% 4. Global Wild Cards: Euro Zone Crisis/ Recession,
China & India, Trading Partners5. Biggest Policy Issues: Future of Fannie, Freddie &
FHA
THANK YOU AND PLEASE STAY INFORMED!
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