local market reports 2012 q4 almobile

7/28/2019 Local Market Reports 2012 q4 ALMobile

1/7

Local Price Trends

The Mobile market is part of region 5 in the NAR governance system, which includes all of Georgia, Florida, Alabama,Mississippi, Virgin Islands, and Puerto Rico. The NAR Regional Vice President representing region 5 is Cynthia S.Joachim ABR, ABRM, GRI.

Local NAR Leadership

Most buyers in this market have accesto government-backed financing

$417,000

$7,867

-$22,700

9-year (36 quarters) Housing Equity Gain*

Local Trend

Note: limits are current and include the changes made in November of 2011 and extended in November of 2012

-$14,500

7-year (28 quarters) Housing Equity Gain*

$400

1-year (4-quarter) Appreciation (2012 Q4) 16.6%Prices continue to grow relative to las

year

$729,250

U.S.

FHA Loan Limit

Price Activity

$178,833$111,000

-11.6%3-year (12-quarter) Appreciation (2012 Q4)

10.2%

3-year (12-quarter) Housing Equity Gain*

4.6%

$417,000

Local Median to Conforming Limit Ratio

$417,000

not comparable

-$46,533

Mobile U.S.

*Note: Equity gain reflects price appreciation only

The relatively recent correction in locahome prices wiped out most of theequity gained over the last 7 years

-$2,400

27%

Conforming Loan Limit**

Mobile Area

Local Market Report, Fourth Quarter 2012

Mobile

Current Median Home Price (2012 Q4)

Today's Market

$0

$20,000$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

-20%

-15%-10%

-5%

0%

5%

10%

15%

20%

2012Q4

Q22011Q4

Q22010Q4

Q22009Q4

Q22008Q4

Q22007Q4

Q22006Q4

Q22005Q4

Q22004Q4

Q22003Q4

Median Price (Red Line) and One-year Price Growth


2/7

Natural Resou 7.0% 12.4 Natural 4.7%

#N/A #N/A #N/A #N/A

#N/A #N/A #N/A #N/A

Manufacturing 8.8% 15.6 Manufa 8.9%

Trade/Transpo 21.8% 38.6 Trade/T 19.3%

Information 1.2% 2.1 Inform 2.0%

Financial Act 6.1% 10.8 Financi5.9%

Prof. & Busin 12.8% 22.7 Profes 13.4%Educ. & Heal 13.7% 24.2 Educat 15.4%

Leisure & Ho 8.5% 15.1 Leisur 10.0%Other Servic 5.3% 9.4 Other 4.1%

Government 14.7% 26.1 93.0% Gover 16.4% 100.0%

#N/A #N/A #N/A #N/A

#N/A #N/A #N/A #N/A

Information

Financial Activities

Prof. & Business Services

Educ. & Health Services

Leisure & Hospitality

Service Providing Excluding Government Other Services

Government

12-month change (2012 - Dec)

Alabama

7.7%3.5%

1.9% 2.7%

Goods Producing

-600Manufacturing

0

36-month change (2012 - Dec)

Trade/Transportation/Utilities

100

7.8%

8.5%

0.7%

7.2%

8.6%

Share of Total Employment by Industry

Current Unemployment Rate (Dec)

0

NA

Natural Resources and Mining

Local employment growth is poor andneeds to improve1.7%

Natural Resources/Mining/Construction 100

100

200

1-year (12 month) Job Growth Rate

Mobile Area

NotComparable

Unemployment in Mobile is better thanthe national average and improving

Not

Comparable

Drivers of Local Supply and Demand

2,300

36-month Job Change (Dec)

The economy of Alabama is growingmore slowly than the rest of the nation

but improved modestly from last

month's 1.74% change

U.S.

-300

12-month Employment Change by Industry in the Mobile Area (Dec - 2012)

Year-ago Unemployment Rate

U.S.

State Economic Activity Index

Construction

1,600

NA

2,600

1,300

Employment growth has eased, butremains positive

Not

Comparable

12-month Job Change (Dec)

U.S.

100

NA

NA

Local Economic Outlook Mobile

12-month Job Change (Nov)

NaturalResources/Mining/Con

struct7.0%

Manufacturing

8.8%

Trade/Transportation/U

tilities21.8%

Information1.2%Financial

Activities6.1%

Prof. &BusinessServices12.8%

Educ. &Health

Services13.7%

Leisure &Hospitality

8.5%

OtherServices

5.3%

Government

14.7%

NaturalResources/Mining/Con

struct4.7%

Manufacturing

8.9%

Trade/Transportation/

Utilities19.3%

Informatio2.0%Financial

Activities5.9%

Professional &

BusinessServices13.4%

Educational& HealthServices15.4%

Leisure &Hospitality

10.0%

OtherServices

4.1%

Government

16.4%


3/7

8-year average for 12-month Sum of 1-UnitBuilding Permits

Local Fundamentals

Single-Family Housing Permits (Dec 2012)12-month sum vs. a year ago

Reduced construction will limit newsupply to the market, allowing demand

to catch up with the inventory more

24.3%

not comparable1,331

0.2%

12-month Sum of 1-unit Building Permits throughDec 2012

Mobile

665

U.S.

The current level of construction is50.0% below the long-term average

not comparable

New Housing Construction

While new construction is the traditional driver of supply in real estate, foreclosures and short-sales now have a strongimpact on inventories, particularly at the local level. Rising inventories, through construction or distressed sales, placedownward pressure on the median home prices.

Construction is on the rise relative tolast year, suggesting that the local

inventory has stabilized

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

State Total Foreclosure Rate vs. U.S Average(U.S. Average in Blue Dashed Line)

Source: Mortgage Bankers' Association

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Construction: 12-month Sum of Local Housing Permits(Historical Average Shown in Red Dashed Line)


4/7

Source: First American CoreLogic, LoanPerformance data

25.4% 25.2% 26.7% 25.5% 27.5% 30.7%

4.0% 5.2% 5.0% 10.4% 12.9% 13.9%


7.2% 7.1% 7.1% 5.3% 5.7% 5.9%

1.6% 1.8% 1.4% 2.4% 2.7% 2.7%


Subprime Foreclosure and Delinquency Rates

There are nearly 10.5 prime loans forevery subprime mortgage in the Mobilemarket, which is less than the nationa

average of 14.7 suggesting that

subprimes make up a greater share othe local market than on average.

Subprime:

Foreclosure +

REO Rate

U.S.

Subprime: 90-day

Delinquent

Mobile's 90-day delinquency rateclimbed faster than the national

average over the most recent 6-monthperiod

Monthly Market Data -

December 2012 Mobile

The decline in the foreclosure rate ove

the most recent 6-month period is likelto change coarse and rise in the nearfuture as evidenced by the increase in

the 90-day delinquency rate

Monthly Market Data - December 2012 Mobile U.S.

3,366,415

Composition of Mortgaged Homes in Local Area

U.S.

Prime Mortgages Outstanding (estimate)

Subprime Mortgages Outstanding (estimate)

57,267 49,481,756

5,431

The "foreclosure + REO rate" is the number of mortgages, by metro area, that are either in the foreclosure process or have complete

the foreclosure process and are owned by banks divided by the total number of mortgages for that area.

Prime Foreclosure and Delinquency Rates

Mobile's 90-day delinquency rate

climbed faster than the nationalaverage over the 6-month period

ending in December.

The "foreclosure + REO rate" is the number of mortgages, by metro area, that are either in the foreclosure process or have completethe foreclosure process and are owned by banks divided by the total number of mortgages for that area.

The decline in the prime foreclosurerate over the 6-month period ending inDecember is likely to change coarse

and rise in the near future as evidence

by the increase in the 90-daydelinquency rate

Mobile

Prime:

Foreclosure +

REO Rate

Monthly Market Data -

December 2012

Prime: 90-dayDelinquent

5.29%

5.68%

5.90%

Dec-12Jun-12Dec-11

1.59%

1.84%

1.44%

Dec-12Jun-12Dec-11

2.40%

2.73%

2.70%

Dec-12Jun-12Dec-11

7.17%

7.06%

7.14%

Dec-12Jun-12Dec-11

25.51%

27.54%

30.73%

Dec-12Jun-12Dec-11

4.02%

5.24%

4.98%

Dec-12Jun-12Dec-11

10.35%

12.88%

13.95%

Dec-12Jun-12Dec-11

25.4%

25.2%

26.7%

Dec-12Jun-12Dec-11


5/7

Monthly Mortgage Payment to Income

Historical Average

U.S.

1.2

1.2

2.7

2.4

More affordable than most markets20.7%12.5%

The price-to-income ratio has fallen anis below the historical average

Affordable compared to most marketsHistorical Average 1.6

2.4

U.S.

Ratio for 2012 Q4

Median Home Price to Income

6.6%

Mobile

Mobile

Ratio for 2012

6.5%

Ratio for 2012 Q4

Ratio for 2012

12.6%

Historically strong and an improvemenover the third quarter of 2012

Affordability

13.2%

0%

5%

10%

15%

20%

25%

30%

2012201020082006200420022000199819961994

Long-Term Trend: Ratio of Local Mortgage Servicing Cost to Income(Local Historical Average Shown in Red, U.S. Average in Green)

0%

2%

4%

6%

8%

10%

12%

14%

2012 Q42012 Q32012 Q22012 Q12011 Q42011 Q32011 Q22011 Q1

Recent Trend - Local Mortgage Servicing Cost to Income(Historical Average Shown in Red Dashed Line)


6/7

The New Year brought a new outlook to the mortgage market. Rates inched up modestly from late December. Theconsensus was that the economy is more robust and poised for modest to moderate growth through the end of 2013,which would pull up on the 10-year Treasury and mortgages rates in turn. Concerns about sequestrations impact on theeconomy were priced in and many analysts appeared optimistic that the House and Senate would be able to come to a

compromise, avoiding any major shock waves to the economy and financial markets. However, mortgage rates jumpedin late December on hints that the Federal Reserve might slow or stop its large scale purchases of mortgage backedsecurities (MBS). These fears proved unfounded as the Federal Reserve reasserted its program in January to maintainits purchases of MBS at $40 billion a month for an unspecified period. These purchases are important as they increasedemand for mortgages, which in turn lowers the rates paid at the retail end by homebuyers. These two trends are fightineach other as Fed purchases press down on rates that should be following the economic news upward. The result hasbeen a decline in the spread between the 10-year Treasury and average rate 30-year fixed mortgage as reported byFreddie Mac. Rates are likely to remain low as sequestration is more likely to come to fruition and uncertainty in Europeremains.

The Mortgage Market

0

40

80

120

160200

240

280

0.0%

1.0%

2.0%

3.0%

4.0%5.0%

6.0%

7.0%

2012 Q4Q22011 Q4Q22010 Q4Q22009 Q4Q22008 Q4Q22007 Q4

30-year Fixed Mortgage Rate and Treasury Bond Yield

Spread (left axis) 30-Year FRM (Right axis) 10-Year Treasury Bond (Right Axis)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2012201020082006200420022000199819961994

Ratio of Local Median Home Price to Local Average Income(Local Historical Average Shown in Red, U.S. Average in Green)


7/7

A Closer LookPersonal Bankruptcy

Personal bankruptcies tend to rise during periods of economic distress due to job loss and loss or reduction of income.Not surprisingly, this pattern was evident during this most recent economic downturn when bankruptcies rose nationally toa peak of 1.537 million in 2010. In Alabama, bankruptcies peaked in 2009 at 34180. However, the volume ofbankruptices eased by -19.1% to 27645 in 2012. The decline in bankruptcies is a reflection of improved consumerbalance sheets. However, consumers are also dealing with battered FICO scores and the stringent lending environmentrequires hightened credit and reserve standards constraining many would-be home buyers.

More information on the OMB's geographic definitions can be found at http://www.whitehouse.gov/omb/inforeg_statpolicy/

Mobile County

The Mobile area referred to in this report covers the geographic area of the Mobile metro area as officially defined by theOffice of Management and Budget of the U.S. Government. The official coverage area includes the following counties:

Geographic Coverage for this Report

Personal Bankruptcy Filiings Alabama U.S.

2012 27,645 1,181,016

2011 29,739 1,363,015

Bankruptices in Alabama fell by a

smaller percentage than the nationalaverage between 2011 to 2012.

-20%

-10%

0%

10%

20%

30%

40%

2007 2008 2009 2010 2011 2012

Alabama United States

Annual Growth of Personal Bankruptcies

Source: Census

local market reports 2012 q4 almobile

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