2015 mid-year real estate update
TRANSCRIPT
WHERE REAL ESTATE IS MOVING WHERE REAL ESTATE IS MOVING
2015 Mid-Year Real Estate Update Rick Sharga Executive Vice President May 20, 2015
What We’ll Cover Today
• Existing and New Home Sales Trends
• Delinquencies and Foreclosures
• Investor Activity
• Commercial Real Estate Trends
• Closing Thoughts
• Q & A
2
WHERE REAL ESTATE IS MOVING
Existing & New Home Trends
Existing Home Sales Weaker Than Forecast
Prices Continue to Increase, But Rate of Growth Slowing
Low Inventory Driving Price Gains
New Home Sales Improving, Still Far Off Peak Levels
New Home Inventory Still Near 40-year Low
Housing Starts Continue to Lag
And Are Still Skewed Toward Multifamily
WHERE REAL ESTATE IS MOVING
Foreclosures: The End is (Finally) Near
Delinquent Loan Backlog is Shrinking
And US Foreclosure Activity Decreasing Rapidly
Majority of Loans in Foreclosure are Pre-2010 Vintage
And 77% of Delinquent Borrowers are Underwater
15
But Negative Equity Trends are Improving
16
And Largely Concentrated in a Few States
17
WHERE REAL ESTATE IS MOVING
Investor Activity
Investor Purchase Prices Moderating in All Regions
19
Price to Appraisal Ratio Moderating – Lowest Since Q4 2010
20
Price-to-Appraisal Ratio Declining in Most Metros
21
Most Live Event Investors Choose to Flip Properties
22
While Most Online Investors Prefer Holding to Rent
23
South & West Regions Offer Best Investing Prospects
24
Top 5 Hottest Metro Areas in the US
25
WHERE REAL ESTATE IS MOVING
Commercial Market Overview
Commercial Sales at Highest Levels Since Recession
And Prices Continue to Rise in All Sectors
28
Risk Premiums May be Nearing Cyclical Peak
And Cap Rates Fall Below 10-Year Averages
WHERE REAL ESTATE IS MOVING
Closing Thoughts
What’s in Store for the Rest of 2015
• Residential market may show marginal improvements over 2014:
» Existing home sales between 4.9-5.1 million units
» Existing home prices appreciate between 4.5 - 5.5%
» Access to credit still tight, and interest rates likely to increase slightly
• New home sales will improve slightly as well
» Sales between 450,000 – 500,000 units
» Unlikely to see much entry level inventory
• Foreclosure activity nearing pre-crisis levels
• Commercial recovery outpacing residential
» Capital ahead of fundamentals in some markets/sectors
32
WHERE REAL ESTATE IS MOVING
Rick Sharga Executive Vice President Auction.com [email protected] Follow me on Twitter: @ricksharga