Changes in Real EstateA Demographic & Economic

Outlook for 2013

Oscar Gonzales, MBA, PhD – International Division

Population Trends

U.S. Population by Race

2016 326,157,434 203,590,818 39,443,305 15,531,613 59,225,877 8,365,821

% Change 4.47% 2.68% 3.67% 5.82% 13.59% -7.78%

Year U.S. White Black Asian Hispanic Other

2011 312,211,832 198,274,006 38,047,665 14,677,490 52,141,065 9,071,606

U.S. Census 2012

U.S. Foreign Born Population

5

U.S. Population Projections 2008 - 2050

Texas Population2011 - 2016

Texas Foreign Born Population

Houston’s Demographic Profile

Houston Population by Race 1960 - 2012

Houston Population by Race 2011 - 2016

2016 6,609,547 2,695,870 994,823 406,017 2,445,311 67,526

% Change 10.78% 5.62% 9.17% 17.03% 16.66% 12.74%

Year Total White Black Asian Hispanic Other/Multi

2011 5,966,479 2,552,369 911,281 346,924 2,096,012 59,893

Houston’s Population by Age & Ethnicity

Houston’s Foreign Born Population

Distributions by Education – Houston MSA

Houston Median Income by Race 2011 - 2016

2016 $ 50,156 $ 53,855 $ 35,441 $ 65,507 $ 39,290

% Change -0.06% 0.00% -0.03% 0.03% 2.54%

Year Total White Black Asian Hispanic

2011 $ 50,185 $ 53,855 $ 35,450 $ 65,488 $ 38,316

A Look at the Housing Economy

In 2012, foreign investors pumped $1.26 billion into Houston commercial property, up 32 percent over 2011.

Investors from the Middle East, Australia and Canada spent the most in Houston in 2012.

The last time more foreign money was invested here was in 2006.

The Association of Foreign Investors in Real Estate picked Houston as No. 4 in the WORLD for best places for real estate investment.

It was the first time Houston made the Top 5 global cities list as one of the best prospects for real estate investing worldwide.

Among U.S. cities:

Houston was named the 5th best, up from 7th place;

New York held the top spot;

San Francisco moved up one to # 2;

Washington, D.C., ranked 3rd and,

Boston 4th.

International Homebuyer

Profile

The Houston Region as a whole is the most ethnically and culturally diverse large metropolitan area in the country.

The U.S. is in rapid transition into becoming a microcosm of all peoples of the world. Nowhere is this more sharply articulated than in Houston, TX.

2012 International Home Buying Activity

• Total sales volume to international clients was estimated to be $82.5 Billion for the 12 months ending March 2012, up from an estimated $66.4 Billion for the 12 months ending March 2012.

• The estimated volume of international sales increased between 2011 and 2012 by 24%.

Source: National Association of REALTORS

Geographic Segmentation

Percent of Total International Sales by State

Motivation for Buying

• Homes in U.S. are less expensive than comparable foreign properties and viewed as a secure investment and provide rental and long term appreciation possibilities.

• International students. The student(s) use the property as a residence

while studying in the country. In addition, the properties can also acquire rental and investment aspects, with the student(s) functioning as landlords.

• Foreign executives temporarily working in this country.

• In the case of recent immigrants to the U.S., home ownership is viewed by many as an important accomplishment in their efforts to become established in this country.

U.S. Home Price after Currency Conversion

2000 - Jan 2001 - Jan 2002 - Jan 2003 - Jan 2004 - Jan 2005 - Jan 2006 - Jan 2007 - Jan 2008 - Jan 2009 - Jan 2010 - Jan 2011 - Jan75

100

125

150

175

200

US

Canada

Euro

Yen

100

Index set at 100 in Year 2000

Houston Housing Trends2011 - 2012

Single-Family Home Sales – Up 16.1% 53,592 – 62,229

Total Dollar Volume – Up 23.3%$13,012,903,352 – $16,040,186,637

Single Family Median Price – Up 6.1%$155,000 - $164,500

2007 2008 2009 2010 2011 2012

Months Inventory 5.9 5.7 5.8 7.2 5.8 3.7

0.5

1.5

2.5

3.5

4.5

5.5

6.5

7.5

Houston's Months Inventory2007-2012

Months Inventory

INTEREST RATES WILL RISEBy the fourth quarter of 2013 a full point higher; creating a stronger sense of urgency & housing demand.

HOME SALES UP BETWEEN 6 - 8%Some analysts are predicting upwards of 10 percent

INCREASE IN SECOND-TIME (MOVE UP) HOMEBUYERS Positive signs in the economy – More move up buyers

CONSUMERS WILL CONTINUE TO USE THE LATEST TECHNOLOGY IN THEIR SEARCH FOR REAL ESTATE A study by Saber and Messinger (2010) found that the customer's perceived value of residential real estate professionals tends to decrease with increased use of technology empowering tools.

What Can We Expect In 2013?

Changes in Real EstateA Demographic & Economic

Outlook for 2013

Oscar Gonzales, MBA, PhD – International Division