April Market Trends Report
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Transcript of April Market Trends Report
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Everyone is Now Saying It
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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
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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
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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
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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
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S&P Case Shiller National Pricing Index
120
130
140
150
160
170
180
190
200
2006 – 2012
KCM 3/2013 Case Shiller
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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
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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
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Home Price Expectation Survey
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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
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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
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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
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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
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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
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S&P Case-Shiller Home Price Indices
S&P Case Shiller 3/2013
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-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
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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
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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?
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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
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3.25
3.5
3.75
4
4.25
30 Year Fixed Rate Mortgage History
1/2012 – 4/2013
Federal Reserve 4/2013
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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
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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
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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
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Price P&I
Over 12 Months $14,173.68
Over 30 Year Mortgage $425,210.40
The Move-Up Seller
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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
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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
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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
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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
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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.”
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Trulia 3/2013http://trends.truliablog.com/vis/rentvsbuy-winter-2013
Cheaper to Buy than Rent
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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
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Everyone is Now Saying It
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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
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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
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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
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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
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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
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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
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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%
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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
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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
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“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
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