2015 idaho real estate summit- ada county association of realtors

The State of Real Estate in Ada CountyDecember 10, 2014

Presented by

The Ada County Association of Realtors

Dave Ferguson

2014 ACAR President

Kit Fitzgerald

Idaho Real Estate Summit -

Chairperson

Gerald Hunter

Executive Director

Idaho Housing and Finance Association

www.idahohousing.com

Housing Summit2015

IHFA Statewide Loan Production

IHFA Ada County Loan Production

IHFA Loan Servicing

Foreclosure Rates: FHA Loans

Foreclosure Rates: Conventional Loans

Delinquency Rates: FHA Loans

Delinquency Rates: Conventional Loans

Who Are Our Borrowers?

Borrower Characteristics FY2014 FY2008Age 37 31Income $51,000 $44,000Family Size 2.4 2.0FICO 720 693First-time homebuyer 81% 92%

Loan CharacteristicsAverage Loan Size $149,000 $169,000DPA Percentage 44% 26%Government Insured 50% 60%Max Eligible Income $ 90,000 $ 85,260

2014 Product Overview

Access to Credit

• Existing home sales to first-time buyers down to 33% from normal of 40%

• Home purchase loans to low-to-moderate income borrowers declined to 28.4% from 33.4% from 2012 to 2013

• Homeownership rate down to 64.3%, lowest in 20 years

• NAHB estimates loss of 18,700 home sales to tight credit

• Urban Institute estimates that in 2012 alone, as many as 1.2 million loans were lost due to low credit availability.

Access to Credit

<700 700-750 >750

2011 – Q3 2013 8.3% 23.2% 68.5%

2007 37.9% 25.6% 36.5%

1999 - 2004 37.1% 30.4% 32.4%

* Data provided by Urban Institute

FNMA Credit Scores*

Actions to Open Credit Box

• GSE 97% Loan to Value Ratios

• GSE Rep and Warrant Changes

• Freddie Mac Specialized HFA Products

• FHA HAWK Program

• FHA Quality Assurance Program

LeAnn Hume,

CCIM, CLS

COMMERCIAL REAL

ESTATE IN IDAHO

LeAnn Hume, CCIM, CLS

LeAnn M. Hume, CCIM, CLS

Global National Regional Local

ACAR Housing

Summit

• Idaho Native• Grew up with Realtors• Started career at Albertsons corporate – 17 years ago• Certified Commercial Investment Member• Certified Leasing Specialist – ICSC• Specialize in Retail Tenant Representation, Investment• Team with Andrea Nilson

STATE OF RETAIL - GLOBAL

Downtown – $15-$26 NNN

The Village – $30-$36 NNN

Depending on Concessions and TI’s

ACAR Housing

Summit

NATIONAL RETAIL TRENDS

RETAIL INDUSTRY COMP SALES

Company Name % Sales Increase Yr/Yr

Amazon.com 24.0

Michael Kors 22.9

Netflix 22.2

Burberry 17.0

Lululemon Athletica 5.0

Chico’s (1.9)

Family Dollar (2.8)

Sears (4.0)

Gordmans (6.1)

Abercrombie & Fitch (14.0)

Aeropostale (15.0)

Coldwater Creek (16.8)

Under Armour (26.0)

ACAR Housing

Summit


100 Locations

300 Locations

ACAR Housing

Summit


• The Enclosed Mall

• Lifestyle Centers – Providing an Experience

• Sense of Place

• Retailers downsizing

• Closures – Staples, Radio Shack

• Consolidation – Safeway/Albertsons

• Counterfeit Goods – 10% of all sales

• Buy Local!

ACAR Housing

Summit

LOCAL TRENDS

• Capital Chasing Yields – Pacific NW

• Low Cap Rates for Single Tenant NNN Investments

Starbucks Wendys Popeyes Freddys

• Lending Environment Still Favorable

• Multi-Family Development

• Distribution is Key to some expansion

• Grocery category expansion

• Consumer Confidence is Good

ACAR Housing

Summit

LOCAL COMMERCIAL ACTIVITY

LEADERSHIP

CONFERENCE

FUN FACTS

LEADERSHIP

CONFERENCE

• Cyber Monday - $2.04 Billion in Sales – Up 17.8%

• Black Friday – Down 11.3% from 2013 - $57.4 B

• Why? Retailers offering specials earlier

• Average holiday Household spending =

– $684 – down 6.9%

• Most Popular Purchases for holidays?

– Clothing & Clothing Accessories

ACAR HOUSING SUMMIT

Questions?

LeAnn Hume, CCIM, CLS

208-287-8436

ACAR Housing

Summit

Marc Lebowitz, RCE, CAE

Executive Director

Ada County Association of REALTORS®

Sales in 2014 (compared to 2013):• Up in all price points above $160,000• Down in all price points below $160,000

o $100,000 to $120,000 75%o $120,000 - $160,000 18%

As far back as 2006 we began seeing the availability of entry-priced housing begin to decline.

Ada County sales for 2014 “comme ci comme ça”

$100,000

$125,000

$150,000

$175,000

$200,000

$225,000

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

2010 Median 168995 165000 156495 149900 153350 162400 160000 163000 154000 147900 150000 145000

2011 Median 134900 149000 137000 135000 144500 154900 152750 156900 147500 152500 149500 149300

2012 Median 139000 158000 154900 158777 179900 174255 173000 180,399 174990 178000 177400 177971

2013 Median 185909 180000 186750 187,000 195000 212000 207000 201992 194500 214000 205700 198512

2014 Median 208180 199650 197,900 209450 209000 218650 213800 218900 205551 208698 215700

Median Home PriceNovember +5%

$141,763

$162,536

$190,031

$232,921

$223,468

$203,273

$170,155

$156,337

$146,979

$168,883

$197,364

$209,900

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

$220,000

$240,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Ada County Median Home PriceAverage by Year

+48%

2003 - 2014

0

1000

2000

3000

4000

5000

6000

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

Active Inventory

2007 2008 2009 2010 2011 2012 2013 2014

To the Bottom and Back again – A Timeline

July 2007

Median

$240,000

December 2009

Median

$165,000

Inventory

<$160,000

40%

December 2010

Median

$147,000

Inventory

Down 32%

from 2007

Levels

Sales

<$160,000

61%

Inventory

<$160,000

26%

2013

Median

$198,000

Inventory

<$160,000

20%

Today

Median

$209,000

Inventory

<$160,000

12%

Sales

<$160,000

24%

2014 Indicators

Available Inventory Jan Oct Change

$ 0- $120K 70 42 -40%

$120K - $160K 336 292 -13%

$160K - $200K 416 519 25%

$200K - $250K 362 449 24%

$250K - $300K 220 379 72%

$300K - $400K 346 444 28%

$400K - $500K 111 202 82%

Sales Jan Oct Change

$ 0- $120K 32 16 -50%

$120K - $160K 90 145 61%

$160K - $200K 74 149 101%

$200K - $250K 74 116 57%

$250K - $300K 55 83 51%

$300K - $400K 65 92 42%

$400K - $500K 16 40 150%

Dr. Lawrence Yun

Chief Economist

National Association of REALTORS®

Real Estate Trends and Outlook

Lawrence Yun, Ph.D.Chief Economist

NATIONAL ASSOCIATION OF REALTORS®

Presentation at Ada County Association of REALTORS®

Boise, ID

December 10, 2014

GDP Reboundin 2014 Q2 and Q3

-10

-8

-6

-4

-2

0

2

4

6

2007- Q1

2007- Q3

2008- Q1

2008- Q3

2009- Q1

2009- Q3

2010- Q1

2010- Q3

2011- Q1

2011- Q3

2012- Q1

2012- Q3

2013- Q1

2013- Q3

2014- Q1

2014- Q3

GDP Annualized Growth Rate

Jobs(8 million lost … 10 million gained)

122000

124000

126000

128000

130000

132000

134000

136000

138000

140000

1420002

00

0 -

Jan

20

00

- J

ul

20

01

- J

an2

00

1 -

Ju

l2

00

2 -

Jan

20

02

- J

ul

20

03

- J

an2

00

3 -

Ju

l2

00

4 -

Jan

20

04

- J

ul

20

05

- J

an2

00

5 -

Ju

l2

00

6 -

Jan

20

06

- J

ul

20

07

- J

an2

00

7 -

Ju

l2

00

8 -

Jan

20

08

- J

ul

20

09

- J

an2

00

9 -

Ju

l2

01

0 -

Jan

20

10

- J

ul

20

11

- J

an2

01

1 -

Ju

l2

01

2 -

Jan

20

12

- J

ul

20

13

- J

an2

01

3 -

May

20

13

- N

ov

20

14

- M

ay2

01

4 -

No

v

In thousands

Weekly New Unemployment Insurance Claims

250

300

350

400

450

500

550

600

20

00

- J

an

20

00

- A

ug

20

01

- M

ar

20

01

- O

ct

20

02

- M

ay

20

02

- D

ec

20

03

- J

ul

20

04

- F

eb

20

04

- S

ep

20

05

- A

pr

20

05

- N

ov

20

06

- J

un

20

07

- J

an

20

07

- A

ug

20

08

- M

ar

20

08

- O

ct

20

09

- M

ay

20

09

- D

ec

20

10

- J

ul

20

11

- F

eb

20

11

- S

ep

20

12

- A

pr

20

12

- N

ov

20

13

- J

un

20

14

- J

an

20

14

- A

ug

In thousands

Unemployment Rate

0

2

4

6

8

10

12

20

00

- J

an2

00

0 -

Ju

l2

00

1 -

Jan

20

01

- J

ul

20

02

- J

an2

00

2 -

Ju

l2

00

3 -

Jan

20

03

- J

ul

20

04

- J

an2

00

4 -

Ju

l2

00

5 -

Jan

20

05

- J

ul

20

06

- J

an2

00

6 -

Ju

l2

00

7 -

Jan

20

07

- J

ul

20

08

- J

an2

00

8 -

Ju

l2

00

9 -

Jan

20

09

- J

ul

20

10

- J

an2

01

0 -

Ju

l2

01

1 -

Jan

20

11

- J

ul

20

12

- J

an2

01

2 -

Ju

l2

01

3 -

Jan

20

13

- J

ul

20

14

- J

an2

01

4 -

Ju

l

Jobs in Boise Area

200

210

220

230

240

250

260

270

280

290

300

20

00

- J

an2

00

0 -

Ju

l2

00

1 -

Jan

20

01

- J

ul

20

02

- J

an2

00

2 -

Ju

l2

00

3 -

Jan

20

03

- J

ul

20

04

- J

an2

00

4 -

Ju

l2

00

5 -

Jan

20

05

- J

ul

20

06

- J

an2

00

6 -

Ju

l2

00

7 -

Jan

20

07

- J

ul

20

08

- J

an2

00

8 -

Ju

l2

00

9 -

Jan

20

09

- J

ul

20

10

- J

an2

01

0 -

Ju

l2

01

1 -

Jan

20

11

- J

ul

20

12

- J

an2

01

2 -

Ju

l2

01

3 -

Jan

20

13

- J

ul

20

14

- J

an2

01

4 -

Ju

l

In thousands

Jobs: U.S. vs Boise Area

90

95

100

105

110

115

120

125

130

135

20

00

- J

an2

00

0 -

Ju

l2

00

1 -

Jan

20

01

- J

ul

20

02

- J

an2

00

2 -

Ju

l2

00

3 -

Jan

20

03

- J

ul

20

04

- J

an2

00

4 -

Ju

l2

00

5 -

Jan

20

05

- J

ul

20

06

- J

an2

00

6 -

Ju

l2

00

7 -

Jan

20

07

- J

ul

20

08

- J

an2

00

8 -

Ju

l2

00

9 -

Jan

20

09

- J

ul

20

10

- J

an2

01

0 -

Ju

l2

01

1 -

Jan

20

11

- J

ul

20

12

- J

an2

01

2 -

Ju

l2

01

3 -

Jan

20

13

- J

ul

20

14

- J

an2

01

4 -

Ju

l

Household Net Worth at All-Time High

40000

45000

50000

55000

60000

65000

70000

75000

80000

85000$ billion

But Wait …

“I am not feeling it”

GDP Still not Robust … Below 3% for 9 straight years

-4

-2

0

2

4

6

8

10

19

50

19

52

19

54

19

56

19

58

19

60

19

62

19

64

19

66

19

68

19

70

19

72

19

74

19

76

19

78

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

20

10

20

12

20

14

GDP Annual Growth Rate

Sluggish Growth + Gap after Great Recession ($1.5 trillion gap … $4,700 per person)

10000

11000

12000

13000

14000

15000

16000

17000

18000

1998 - Q1 2000 - Q1 2002 - Q1 2004 - Q1 2006 - Q1 2008 - Q1 2010 - Q1 2012 - Q1

GDP in 2009 Dollars

Real GDP Real GDP W/O Recession

3% Growth Line

2.2% Growth Line

Employment Rate

54

56

58

60

62

64

66

20

00

- J

an2

00

0 -

Ju

l2

00

1 -

Jan

20

01

- J

ul

20

02

- J

an2

00

2 -

Ju

l2

00

3 -

Jan

20

03

- J

ul

20

04

- J

an2

00

4 -

Ju

l2

00

5 -

Jan

20

05

- J

ul

20

06

- J

an2

00

6 -

Ju

l2

00

7 -

Jan

20

07

- J

ul

20

08

- J

an2

00

8 -

Ju

l2

00

9 -

Jan

20

09

- J

ul

20

10

- J

an2

01

0 -

Ju

l2

01

1 -

Jan

20

11

- J

ul

20

12

- J

an2

01

2 -

Ju

l2

01

3 -

Jan

20

13

- J

ul

20

14

- J

an2

01

4 -

Ju

l

Renter Households from 2010(Increased by 4 million)

25,000

27,000

29,000

31,000

33,000

35,000

37,000

39,000

41,000

19

80

- Q

11

98

1 -

Q1

19

82

- Q

11

98

3 -

Q1

19

84

- Q

11

98

5 -

Q1

19

86

- Q

11

98

7 -

Q1

19

88

- Q

11

98

9 -

Q1

19

90

- Q

11

99

1 -

Q1

19

92

- Q

11

99

3 -

Q1

19

94

- Q

11

99

5 -

Q1

19

96

- Q

11

99

7 -

Q1

19

98

- Q

11

99

9 -

Q1

20

00

- Q

12

00

1 -

Q1

20

02

- Q

12

00

3 -

Q1

20

04

- Q

12

00

5 -

Q1

20

06

- Q

12

00

7 -

Q1

20

08

- Q

12

00

9 -

Q1

20

10

- Q

12

01

1 -

Q1

20

12

- Q

12

01

3 -

Q1

In thousands

Homeowner Households from 2010 (Decreased by 1 million)

50,000

55,000

60,000

65,000

70,000

75,000

80,0001

98

0 -

Q1

19

81

- Q

11

98

2 -

Q1

19

83

- Q

11

98

4 -

Q1

19

85

- Q

11

98

6 -

Q1

19

87

- Q

11

98

8 -

Q1

19

89

- Q

11

99

0 -

Q1

19

91

- Q

11

99

2 -

Q1

19

93

- Q

11

99

4 -

Q1

19

95

- Q

11

99

6 -

Q1

19

97

- Q

11

99

8 -

Q1

19

99

- Q

12

00

0 -

Q1

20

01

- Q

12

00

2 -

Q1

20

03

- Q

12

00

4 -

Q1

20

05

- Q

12

00

6 -

Q1

20

07

- Q

12

00

8 -

Q1

20

09

- Q

12

01

0 -

Q1

20

11

- Q

12

01

2 -

Q1

20

13

- Q

1

In thousands

Homeownership Rate

60

61

62

63

64

65

66

67

68

69

70

19

90

- Q

1

19

91

- Q

1

19

92

- Q

1

19

93

- Q

1

19

94

- Q

1

19

95

- Q

1

19

96

- Q

1

19

97

- Q

1

19

98

- Q

1

19

99

- Q

1

20

00

- Q

1

20

01

- Q

1

20

02

- Q

1

20

03

- Q

1

20

04

- Q

1

20

05

- Q

1

20

06

- Q

1

20

07

- Q

1

20

08

- Q

1

20

09

- Q

1

20

10

- Q

1

20

11

- Q

1

20

12

- Q

1

20

13

- Q

1

20

14

- Q

1

Household Net Worth($5,500 vs. $195,500)

$0

$50,000

$100,000

$150,000

$200,000

$250,000

Renter Homeowner

1998 2001 2004 2007 2010 2013

x31 x46x36 x34x46

Homeowner net worth ranges from 31 to 46 times that of renters x36

Source: Federal Reserve Survey of Consumer Finances

Median Home Price(Near 20% gain in 2 years)

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

$220,000

$240,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

The Reason for Not Feeling It

• Very Slow Housing Market Recovery

• Very Slow Commercial Market Recovery

• Holds Back Economic Recovery

Existing Home Sales20% cumulative increase over 2 years

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Monthly Pending Sales Index … Making Upward U-Turn

(Seasonally Adjusted)

70.0

75.0

80.0

85.0

90.0

95.0

100.0

105.0

110.0

115.0

20

11

- J

an

20

11

- M

ar

20

11

- M

ay

20

11

- J

uly

20

11

- S

ep

20

11

- N

ov

20

12

- J

an

20

12

- M

ar

20

12

- M

ay

20

12

- J

ul

20

12

- S

ep

20

12

- N

ov

20

13

- J

an

20

13

- M

ar

20

13

- M

ay

20

13

- J

ul

20

13

- S

ep

20

13

- N

ov

20

14

- J

an

20

14

- M

ar

20

14

- M

ay

20

14

- J

ul

20

14

- S

ep

Source: NAR

Two and Out?Or Multi-year Expansion?

(Single-Family Existing Home Sales Only)

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,0001

96

8

19

70

19

72

19

74

19

76

19

78

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

20

10

20

12

20

14

H1

1

Pent Up Demand

2000 2013

Existing Home Sales 5.2 m 5.1 m

New Home Sales 880 K 430 K

Mortgage Rates 8.0% 4.0%

Payroll Jobs 132.0 m 136.4 m

Population 282 m 316 m

Housing Starts Rising … Too Slowly

0

500

1000

1500

2000

2500

30001

97

0 -

Jan

19

72

- J

an

19

74

- J

an

19

76

- J

an

19

78

- J

an

19

80

- J

an

19

82

- J

an

19

84

- J

an

19

86

- J

an

19

88

- J

an

19

90

- J

an

19

92

- J

an

19

94

- J

an

19

96

- J

an

19

98

- J

an

20

00

- J

an

20

02

- J

an

20

04

- J

an

20

06

- J

an

20

08

- J

an

20

10

- J

an

20

12

- J

an

20

14

- J

an

Thousand units

Time to Sell a New Spec Home(in months)

0

2

4

6

8

10

12

14

16

2000- Jan

2001- Jan

2002- Jan

2003- Jan

2004- Jan

2005- Jan

2006- Jan

2007- Jan

2008- Jan

2009- Jan

2010- Jan

2011- Jan

2012- Jan

2013- Jan

2014- Jan

Sluggish Recovery in Housing Starts

• Cost of Construction Rising Faster than CPI

• Labor Shortage for construction work

• Construction loan difficulty for small local homebuilders … Dodd-Frank financial regulations?

Ada County Housing Statistics

• Home Sales down 1% year-to-date October • 2013 up 14%

• 2012 up 1%

• 2011 up 9%

• Average Price up 10%• 2013 up 17%

• 2012 up 13%

• 2011 down 9%

Boise Area Housing Permits (year-to-date)

0

2000

4000

6000

8000

10000

12000

14000

2000- Jan

2001- Jan

2002- Jan

2003- Jan

2004- Jan

2005- Jan

2006- Jan

2007- Jan

2008- Jan

2009- Jan

2010- Jan

2011- Jan

2012- Jan

2013- Jan

2014- Jan

Multiyear Recovery Likely

• More Jobs

• Manageable Mortgage Rates

• Population Pent-Up Demand

• More Inventory

• Record High Household Wealth

“Take This Job and Shove It … I ain’t working here no more”

0

500

1,000

1,500

2,000

2,500

3,000

3,500

20

02

- J

an

20

02

- J

ul

20

03

- J

an

20

03

- J

ul

20

04

- J

an

20

04

- J

ul

20

05

- J

an

20

05

- J

ul

20

06

- J

an

20

06

- J

ul

20

07

- J

an

20

07

- J

ul

20

08

- J

an

20

08

- J

ul

20

09

- J

an

20

09

- J

ul

20

10

- J

an

20

10

- J

ul

20

11

- J

an

20

11

- J

ul

20

12

- J

an

20

12

- J

ul

20

13

- J

an

20

13

- J

ul

20

14

- J

an

20

14

- J

ul

Quit Rate in thousands


• More Jobs



• More Inventory


Monetary Policy by Federal Reserve (zero rate policy for 6 years!)

0

1

2

3

4

5

6

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Fed Funds%

Federal Reserve Balance Sheet from Quantitative Easing

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

20

05

- J

an

20

05

- J

un

20

05

- N

ov

20

06

- A

pr

20

06

- S

ep

20

07

- F

eb

20

07

- J

ul

20

07

- D

ec

20

08

- M

ay

20

08

- O

ct

20

09

- M

ar

20

09

- A

ug

20

10

- J

an

20

10

- J

un

20

10

- N

ov

20

11

- A

pr

20

11

- S

ep

20

12

- F

eb

20

12

- J

ul

20

12

- D

ec

20

13

- M

ay

Total Asset Purchase

$ million

30-year Mortgage Rates

0

1

2

3

4

5

6

7

8

9

2000- Jan

2001- Jan

2002- Jan

2003- Jan

2004- Jan

2005- Jan

2006- Jan

2007- Jan

2008- Jan

2009- Jan

2010- Jan

2011- Jan

2012- Jan

2013- Jan

2014- Jan

Non-worrisome CPI Inflation – YetCOLA of 1.7% in 2015

-3

-2

-1

0

1

2

3

4

5

6

20

00

- J

an

20

00

- A

ug

20

01

- M

ar

20

01

- O

ct

20

02

- M

ay

20

02

- D

ec

20

03

- J

ul

20

04

- F

eb

20

04

- S

ep

20

05

- A

pr

20

05

- N

ov

20

06

- J

un

20

07

- J

an

20

07

- A

ug

20

08

- M

ar

20

08

- O

ct

20

09

- M

ay

20

09

- D

ec

20

10

- J

ul

20

11

- F

eb

20

11

- S

ep

20

12

- A

pr

20

12

- N

ov

20

13

- J

un

20

14

- J

an

20

14

- A

ug

Rising Renters’ and Homeowners’ Rent Growth (Above 3%)

-1

0

1

2

3

4

5

20

03

- J

an

20

03

- J

ul

20

04

- J

an

20

04

- J

ul

20

05

- J

an

20

05

- J

ul

20

06

- J

an

20

06

- J

ul

20

07

- J

an

20

07

- J

ul

20

08

- J

an

20

08

- J

ul

20

09

- J

an

20

09

- J

ul

20

10

- J

an

20

10

- J

ul

20

11

- J

an

20

11

- J

ul

20

12

- J

an

20

12

- J

ul

20

13

- J

an

20

13

- J

ul

20

14

- J

an

20

14

- J

ul

Owners' Equivalent Rent Renters' Rent

REALTOR® Rent Survey –Shows Rent Pressure

0

10

20

30

40

50

60

20

10

- D

ec

20

11

- F

eb

20

11

- A

pr

20

11

- J

un

20

11

- A

ug

20

11

- O

ct

20

11

- D

ec

20

12

- F

eb

20

12

- A

pr

20

12

- J

un

20

12

- A

ug

20

12

- O

ct

20

12

- D

ec

20

13

- F

eb

20

13

- A

pr

20

13

- J

un

20

13

- A

ug

20

13

- O

ct

20

13

- D

ec

20

14

- F

eb

20

14

- A

pr

20

14

- J

un

Falling Rising

Oil Price

0

20

40

60

80

100

120

140

160

20

00

- J

an

20

00

- A

ug

20

01

- M

ar

20

01

- O

ct

20

02

- M

ay

20

02

- D

ec

20

03

- J

ul

20

04

- F

eb

20

04

- S

ep

20

05

- A

pr

20

05

- N

ov

20

06

- J

un

20

07

- J

an

20

07

- A

ug

20

08

- M

ar

20

08

- O

ct

20

09

- M

ay

20

09

- D

ec

20

10

- J

ul

20

11

- F

eb

20

11

- S

ep

20

12

- A

pr

20

12

- N

ov

20

13

- J

un

20

14

- J

an

20

14

- A

ug

Monetary Policy

• Quantitative Easing … Finished

• Fed Funds Rate … hike in 2015 Q2

• Earlier Move to Tighten because of Inflation Pressure

• Long-term Steady State Rate (2016 onwards) .. 10 year Treasury at 5.0%

• Mortgage Rates reaching 6% by 2016

Erratic Credit Availability

• FICO New Method

• Mel Watt – New overseer of Fannie/Freddie

• Consumer Financial Protection Bureau’s – Lawsuits … Bleeding Big Banks

– Other 2000-page shuffling of Dodd-Frank … Squeezing Small Banks

• Ridiculous FHA premiums … should decline

• Historic low mortgage default rates on recent vintages (2010-2014)


• More Jobs



• More Inventory


U.S. Population

0

50

100

150

200

250

300

350

1968 1973 1978 1983 1988 1993 1998 2003 2008 2013

In millions


• More Jobs



• More Inventory and Moderate Price Growth


Inventory of Homes for Sale

0500,000

1,000,0001,500,0002,000,0002,500,0003,000,0003,500,0004,000,0004,500,000

20

07

- J

an

20

07

- M

ay

20

07

- S

ep

20

08

- J

an

20

08

- M

ay

20

08

- S

ep

20

09

- J

an

20

09

- M

ay

20

09

- S

ep

20

10

- J

an

20

10

- M

ay

20

10

- S

ep

20

11

- J

an

20

11

- M

ay

20

11

- S

ep

20

12

- J

an

20

12

- M

ay

20

12

- S

ep

20

13

- J

an

20

13

- M

ay

20

13

- S

ep

20

14

- J

an

20

14

- M

ay

Maryland inventory up 18% in July

Shadow Inventory in Idaho

0

1

2

3

4

5

6

7

8

2000- Q1

2001- Q1

2002- Q1

2003- Q1

2004- Q1

2005- Q1

2006- Q1

2007- Q1

2008- Q1

2009- Q1

2010- Q1

2011- Q1

2012- Q1

2013- Q1

2014- Q1

% of mortgages in foreclosure process or seriously delinquent


• More Jobs



• More Inventory and Moderate Price Growth


Vacation Home Sales

-

200

400

600

800

1,000

1,200

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

In thousands

Economic Forecast

2013 2014Likely

2015Forecast

2016 Forecast

GDP Growth 2.2% 2.2% 2.7% 2.9%

Job Growth +2.3 million +2.5 million +2.5 million +2.6 million

CPI Inflation 1.5% 1.6% 2.7% 3.3%

Consumer Confidence

73 87 95 98

10-yearTreasury

2.5% 2.6% 3.2% 4.3%

Housing Forecast

2013 2014Likely

2015Forecast

2016 Forecast

Housing Starts 925,000 1.0 million 1.3 million 1.4 million

New Home Sales

430,000 440,000 620,000 700,000

Existing Home Sales

5.1 million 4.9 million 5.3 million 5.4 million

Median Price Growth

+ 11.5% + 5.3% + 4% + 4%

30-year Rate 4.0% 4.2% 4.9% 6.0%

Underwriting Standards

Strict Strict Transition Normal

Commercial Real Estate

Commercial Investment Sales of Large Properties(Properties valued at $2.5 million and over)

130

212

362

423

571

174

67

147

233

299355

400 420 430

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Commercial Sales in $Billions

Federal Reserve Commercial Property Price Index

0

50

100

150

200

250

300

20

00

- Q

1

20

00

- Q

4

20

01

- Q

3

20

02

- Q

2

20

03

- Q

1

20

03

- Q

4

20

04

- Q

3

20

05

- Q

2

20

06

- Q

1

20

06

- Q

4

20

07

- Q

3

20

08

- Q

2

20

09

- Q

1

20

09

- Q

4

20

10

- Q

3

20

11

- Q

2

20

12

- Q

1

20

12

- Q

4

20

13

- Q

3

REALTOR® Markets & Deal Size(Not $2.5 million Properties)

21%

22%

26%

17%

12%

1%

2%

< $250,000

$250,000 - $500,000

$500,000 - $1,000,000

$1,000,000 - $2,000,000

$2,000,000 - $5,000,000

$5,000,000 - $10,000,000

> $10,000,000

2013 CRE Lending Survey: Value of most recent sales transaction

Source: NAR

8%

17%

25%

7%

6%

4%

18%

1% 11%

3%

Current sources of financing for commercial deals

National banks (“Big four”)

Regional banks

Local banks

Credit unions

Life insurance companies

REITs

Private investors

Public companies

Small Business Administration

Other, please specify

Source: NAR

Small Banks Important to REALTORS®

Forecast over the next 2 years

• Increased occupancy and falling vacancy (new supply lacking)

• Rising rents … can offset rising rates to support property values

• Overall … improving business opportunities

OFFICE 2014 2015 2016

Vacancy Rate 16.2% 15.8% 15.6%

Net Absorption ('000 sq. ft.) 36,192 50,678 57,782

Completions ('000 sq. ft.) 26,450 41,799 44,862

Rent Growth 2.6% 3.2% 3.6%

INDUSTRIAL 2014 2015 2016

Vacancy Rate 8.9% 8.5% 8.1%



Inventory ('000,000 sq. ft.) 8,468 8,537 8,598

Rent Growth 2.4% 2.8% 2.9%

RETAIL 2014 2015 2016




Rent Growth 2.0% 2.4% 3.0%

MULTI-FAMILY 2014 2015 2016


Net Absorption (Units) 223,421 170,065 140,128

Completions (Units) 191,481 146,461 122,381

Rent Growth 4.0% 3.9% 3.5%

Sources: National Association of REALTORS® / Reis, Inc.

Commercial Real Estate Forecast

Washington Policy Watch onCommercial Real Estate

• Facilitate Covered Bonds to help credit flow

• Raise cap on holding of commercial RE loans by credit unions

• Preserve Like-Kind Exchanges

• Preserve Terrorism Insurance

• Preserve capital gains status on carried interest

• Depreciation Rules should match economic life

• Oppose lease-accounting changes

How Young Are REALTORS® ?

0

10

20

30

40

50

60

70

Under 30 In 30s In 40s In 50s In 60s

Retiree

Working Age

Let’s Spin the Bottle !

Spin the Globe … Find the Source of Improving Standard of Living

When, How, What, Why?

• British Glorious Revolution of 1688 – William and Mary arrives to say …

– Power not with King but with people via Parliament

– No Taxation with Representation

– Life, Liberty, and (Acquire) Property

• American Revolution of 1766 – Power resides not with King but with people

– No Taxation with Representation

– Life, Liberty, and the Pursuit of Happiness

Participants in Democracy to Protect Property Rights!

Miguel Legaretta, RCE

Director, Public Policy

Ada County Association of REALTORS®

2015 idaho real estate summit- ada county association of realtors

Real Estate

housing summit2015www

good acar housing summit

state of retail

fha loans

conventional loans

commercial real estate

state of real estate

foreclosure rates