april market trends report

Everyone is Now Saying It

MSN Money.com, Case Shiller

33.3

12.5

-17.1

46.1

-30

-10

10

30

50

Dow S&P NASDAQ Real Estate

January 2000 – April 2013

Return on Investment

90

95

100

105

110

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

Pending Home Sales

NAR 3/2013

100 = Historically Healthy Level

80

90

100

110

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

2013 2012 2011

January 2012 – December 2012

January 2011 – December 2011

100 = Historically Healthy Level

NAR 3/2013

Pending Home Sales

Analyst New Previous

Bank of America 8% 4.7%

Capital Economics 8% 5%

Deutsche Bank 7% 2.5%

Freddie Mac 4.5% 2%

John Burns Consulting 9.1% 5.3%

J.P. Morgan 7% 3%

Morgan Stanley 7% 5%

NAR 7% 4%

Zelman & Associates 7% 5.5%

Zillow 4.2% 2.9%

Future Price Projections

Wall Street Journal 3/2013

S&P Case Shiller National Pricing Index

120

130

140

150

160

170

180

190

200

2006 – 2012

KCM 3/2013 Case Shiller

0

20

40

60

80

100

120

140

160

180

200

S&P Case Shiller National Pricing Index

KCM 3/2013 Case Shiller

1987 – 2012

120

130

140

2010 2010 2011 2011 2011 2011 2012 2012 2012 2012

KCM 3/2013 Case Shiller

2010 – 2012

S&P Case Shiller National Pricing Index

Home Price Expectation Survey

Home Price Expectation Survey 3/2013

Home Price Expectation Survey

The nationwide panel of 118 economists, real estate experts and investment and market strategists expects home values to end 2013 up an average of 4.6 percent according to the first quarter Home Price Expectations Survey.

Projected Home Prices - 2013

3.6%

10.4%

-5.8%

5.1%4.1%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Pre-Bubble (1987-1999)

Bubble (Jan '00-Apr '07)

Bust (May '07-Oct '11)

Recovery to Date (Nov '11-Jan '13 )

Expectations (2013-2017)

Average Annual Appreciation

Home Price Expectation Survey 3/2013

4.64.2

3.8 3.8 3.7

0

1

2

3

4

5

6

2013 2014 2015 2016 2017

Home Price Expectation Survey

Projected Percentage Increase

Home Price Expectation Survey 3/2013

Cumulative Appreciation by 2017

22.0%

34.2%

22.0%

11.7%

0.0%

10.0%

20.0%

30.0%

40.0%

Pre-Bubble Trend Bulls All Projections Bears

Home Price Expectation Survey 3/2013

Percentage Appreciation by Survey

3.63.9

2.7

3.2

1.4

2.6

4.64.2

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

5.5

6

2013 2014

3 Years Ago 2 Years Ago 1 Year Ago Now

Home Price Expectation Survey 3/2013

S&P Case-Shiller Home Price Indices

S&P Case Shiller 3/2013

-3.9%-3.5%

-2.5%-1.7%

-0.5%

0.6%1.1%

2.0%

3.6%4.3%

5.5%

6.8%

8.1%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

Jun Jul Aug Sep Oct Nov Dec Jan

Year-over-Year Change in Prices

Jan Feb Mar Apr May

S&P Case Shiller 3/2013

S&P Case-Shiller Home Price Indices

Metropolitan Area Year-over-Year

Atlanta 13.4%

Boston 4%

Charlotte 6%

Chicago 3.3%

Cleveland 4.8%

Dallas 7%

Denver 9.2%

Detroit 13.8%

Las Vegas 15.3%

Los Angeles 12.1%

Metropolitan Area Year-over-Year

Miami 10.8%

Minneapolis 12.1%

New York .6%

Phoenix 23.2%

Portland 8.3%

San Diego 9.8%

San Francisco 17.5%

Seattle 8.7%

Tampa 8.9%

Washington 5.9%

S&P Case-Shiller Home Price Indices

S&P Case Shiller 3/2013

Home Prices in the Short Term

130.00

135.00

140.00

145.00

150.00

May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr

2010-11

2011-12

2012-13

S&P Case Shiller 3/2013

PROJECTED?

Metropolitan Area M-o-M

Atlanta 1.0%

Boston 0%

Charlotte .2%

Chicago -.9%

Cleveland -.5%

Dallas 0%

Denver 0%

Detroit -.9%

Las Vegas 1.6%

Los Angeles .9%

Metropolitan Area M-o-M

Miami .8%

Minneapolis -.5%

New York .1%

Phoenix 1.1%

Portland -.4%

San Diego -.6%

San Francisco 0.1%

Seattle -.3%

Tampa .9%

Washington -.7%

S&P Case-Shiller Home Price Indices

S&P Case Shiller 3/2013

3.25

3.5

3.75

4

4.25

30 Year Fixed Rate Mortgage History

1/2012 – 4/2013

Federal Reserve 4/2013

The MBA projects 30 year

mortgage rates will hit 4.3% by the end of the year…

Mortgage Rates Moving Forward

and, they have already started to

inch upward…MBA 3/2013

3.3

3.35

3.4

3.45

3.5

3.55

3.6

3.65

1/3 1/10 1/17 1/24 1/31 2/7 2/14 2/21 2/28 3/7 3/14 3/21 3/28 4/4Rate 3.34 3.4 3.38 3.42 3.53 3.53 3.53 3.56 3.51 3.52 3.63 3.53 3.57 3.54

Recent Rate Movement

Freddie Mac 4/2013

30 Year Fixed Rate Mortgage

2013

The Move-Up Seller

Price Rate P&I

2006 $400,000 6.5 $2,528.27

Today $300,000 3.5 $1,347.13

Monthly Savings $1,181.14

Price P&I

Over 12 Months $14,173.68

Over 30 Year Mortgage $425,210.40

The Move-Up Seller

Opportunity Still Exists - For Now

“Although buying a home is still cheaper than renting, the gap is closing. In 2013, home prices should rise faster than rents, and mortgage rates are likely to rise in the next year as the economy improves. …People who didn’t buy a homelast year may have missed the bottom of the market, but they haven’t completely missed the boat. Buying remains cheaper than renting in all 100 large metros.”

Trulia 3/2013

Jed Kolko, Trulia’s Chief Economist

Month’s Inventory of Homes for Sale

4.0

5.0

6.0

7.0

8.0

9.0

10.0

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

NAR 3/2013

5-6 Months = Normal Market Inventory

0

40,000

80,000

120,000

160,000

200,000

4Q 2009

1Q 2010

2Q 2010

3Q 2010

4Q 2010

1Q 2011

2Q 2011

3Q 2011

4Q 2011

1Q 2012

2Q 2012

3Q 2012

4Q 2012

OCC Mortgage Metrics Report 3/2013

Completed Foreclosures

OCC and OTS Mortgage Metrics Report 3/2013

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

4Q 2009

1Q 2010

2Q 2010

3Q 2010

4Q 2010

1Q 2011

2Q 2011

3Q 2011

4Q 2011

1Q 2012

2Q 2012

3Q 2012

4Q 2012

in millions

Foreclosures in Process

Cheaper to Buy than Rent

Trulia 3/2013

“Today’s it is 44% cheaper to buy versus rent. In fact, homeownership is cheaper than renting in all of America’s 100 largest metros. That’s because falling mortgage rates have kept buying almost as affordable, relative to renting, as it was last year.”

Trulia 3/2013http://trends.truliablog.com/vis/rentvsbuy-winter-2013

Cheaper to Buy than Rent

20%

25%

30%

35%

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

Percentage of Distressed Property Sales

35%

25%

NAR 3/2013

Everyone is Now Saying It

Projected Home Prices - 2013

“Home prices continue to show momentum amid shrinking inventory and record high affordability, prompting us to revise up our original forecast (4.7%) for home prices this year.

Bank of America

We now expect national home prices to increase 8% this year.”

Bank of America 3/2013

Projected Home Prices - 2013

“Strong demand and tight inventory have broughtexisting home sales back to ‘normal’ levels, and further gains are possible… These conditions, combined with broadereconomic indicators, lead Capital Economics to revise its previous forecast of a 5 percent price gain this year up to 8 percent.”

Capital Economics

DSNews 3/2013

Morgan Stanley

“Strong momentum in home prices as well as housing activity gave Morgan Stanley analysts enough confidence to upgrade their home price appreciation projections to roughly 7% (from 5%) for 2013.

Projected Home Prices - 2013

HousingWire 3/2013

3.25

3.5

3.75

4

4.25

1/2012 – 4/2013

The Bottom?

30 Year Fixed Rate Mortgage History30 Year Fixed Rate Mortgage History

Federal Reserve 4/2013

Recent Rate Movement

Freddie Mac 4/2013

3.3

3.35

3.4

3.45

3.5

3.55

3.6

3.65

30 Year FixedRate Mortgage

This Year

S&P Case-Shiller Home Price IndicesS&P Case-Shiller Home Price Indices

Metropolitan Area Year-over-Year

Atlanta 13.4%

Boston 4%

Charlotte 6%

Chicago 3.3%

Cleveland 4.8%

Dallas 7%

Denver 9.2%

Detroit 13.8%

Las Vegas 15.3%

Los Angeles 12.1%

Metropolitan Area Year-over-Year

Miami 10.8%

Minneapolis 12.1%

New York .6%

Phoenix 23.2%

Portland 8.3%

San Diego 9.8%

San Francisco 17.5%

Seattle 8.7%

Tampa 8.9%

Washington 5.9%

S&P Case Shiller 3/2013

S&P Case-Shiller Home Price IndicesS&P Case-Shiller Home Price Indices

S&P Case Shiller 3/2013

Metropolitan Area M-o-M

Atlanta 1.0%

Boston 0%

Charlotte .2%

Chicago -.9%

Cleveland -.5%

Dallas 0%

Denver 0%

Detroit -.9%

Las Vegas 1.6%

Los Angeles .9%

Metropolitan Area M-o-M

Miami .8%

Minneapolis -.5%

New York .1%

Phoenix 1.1%

Portland -.4%

San Diego -.6%

San Francisco 0.1%

Seattle -.3%

Tampa .9%

Washington -.7%

Resources

KEEPINGCURRENTMATTERS.COM

Slide Slide Title Link

4,5 Pending Home Sales http://www.realtor.org

6 Future Price Projections http://blogs.wsj.com/economics/2013/03/27/home-prices-seen-making-stronger-gains-in-2013/

11,12,13,14, 15

Projected Home Prices – 2013, Average Annual Appreciation, Home Price Expectation Survey, Cumulative Appreciation by 2017, Percentage Appreciation by Survey

https://www.pulsenomics.com/uploads/Q12013_ZHPES_Press_Release_Final.pdf

16,17,18, 19, 20

S&P Case-Chiller Home Price Indices, Home Prices in the Short Term

http://www.standardandpoors.com/indices/articles/en/us/?articleType=PDF&assetID=1245349348126

21, 2330 Year Fixed Rate Mortgage History, Recent Rate Movement

http://www.freddiemac.com/pmms

22 Mortgage Rates Moving Forward http://www.marketwatch.com/story/mortgage-rates-will-rise-next-year-but-slowly-2012-10-24

26 Opportunity Still Exists – For Now http://info.trulia.com/rentvsbuy-winter2013

27 Month’s Inventory of Homes for Sale http://www.realtor.org

28,29Completed Foreclosures, Foreclosures in Progress

http://www.occ.gov/publications/publications-by-type/other-publications-reports/mortgage-metrics-2012/mortgage-metrics-q2-2012.pdf

30,31 Cheaper to Buy than Rent http://trends.truliablog.com/2013/03/rent-vs-buy-winter-2013

Resources

KEEPINGCURRENTMATTERS.COM

Slide Slide Title Link

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

36 Projected Home Prices - 2013http://www.dsnews.com/articles/capital-economics-revises-home-price-forecast-upward-2013-03-08

37 Projected Home Prices – 2013http://www.housingwire.com/news/2013/03/20/housing-track-improve-hurdles-remain-morgan-stanley

38,3930 Year Fixed Rate Mortgage History, Recent Rate Movement

http://www.freddiemac.com/pmms

40,41 S&P Case-Chiller Home Price Indiceshttp://www.standardandpoors.com/indices/articles/en/us/?articleType=PDF&assetID=1245349348126

“Trend spotting, knowing what’s ahead (ahead of your competition), can create enormous advantages. But to see future trends and have the courage to act on them you need to ‘think different’ as an Apple ad campaign once advised. Trying to spot coming opportunities with your current assumptions and preconceived notions won’t work.

Finding the Next Big Thing requires new knowledge and new ways of thinking.”

The Next Big Thing