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March Market Trends Report


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  • 1. Return on Investment January 2000 – March 2013MSN, Case Shiller
  • 2. Pending Home Sales110105100 95 90 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan NAR 2/2013
  • 3. Pending Home Sales110105 100 = Historically Healthy Level100 January 2012 – January 2013959085 January 2011 – January 201280 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan NAR 2/2013
  • 4. New Home SALES January 2013 Sales +28.9% +15.6% Compared to Compared toDecember 2012 January 2012 Census 3/1/2013
  • 5. “While gross domestic product is expected to be negatively impacted by all the uncertainty surrounding the nations impending debt ceiling debate and the risk of sequestration, the housing sector is expected to continue its upward trajectory, the National Association for Business Economics (NABE) said.”PoliticalUncertainty Housing Wire 2/25/2013
  • 6. Month’s Inventory of Homes for Sale10.0 9.0 8.0 7.0 6.0 5-6 Months = Normal Market Inventory 5.0 4.0 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 NAR 2/2013
  • 7. Month’s Inventory of Homes for Sale10.0 9.0 8.0 2011 7.0 6.0 5-6 Months = Normal Market Inventory 5.0 4.0 3.0 2.0 2012 1.0 0.0 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 NAR 2/2013
  • 8. Month’s Inventory of Homes for Sale7.06.0 5-6 Months = Normal Market5.0 < 4 Months = Sellers’ Market4.03.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan NAR 2/2013
  • 9. Calculated Risk 2/2013
  • 10. New Home Inventory Calculated Risk 2/2013
  • 11. Months Supply & Impact on Price Months Market Pricing 1- 4 Sellers Appreciation 5-6 Even The Norm 7+ Buyers Depreciation
  • 12. FHFA Regional Home Prices (year-over-year) FHFA 2012 1Q HPI Report
  • 13. FHFA Regional Home Prices (year-over-year) FHFA 2012 2Q HPI Report
  • 14. FHFA Regional Home Prices (year-over-year) FHFA 2012 3Q HPI Report
  • 15. FHFA Regional Home Prices (year-over-year) FHFA 2012 4Q HPI Report
  • 16. 1st Quarter 2nd Quarter3rd Quarter 4th Quarter
  • 17. FHFA State Home Prices (year-over-year) FHFA 2/2013
  • 18. S&P Case-Shiller Home Price Indices S&P Case Shiller 2/2013
  • 19. S&P Case-Shiller Home Price Indices8.0% Year-over-Year Change in Prices 6.8%6.0% 5.5% 4.3%4.0% 3.6% 2.0%2.0% 1.1% 0.6% Jan Feb Mar Apr May0.0% -0.5% Jun Jul Aug Sep Oct Nov Dec-2.0% -1.7% -2.5%-4.0% -3.5% -3.9%-6.0% S&P Case Shiller 2/2013
  • 20. Year-over-Year Price IncreasesIndex IncreaseCase Shiller 6.8%LPS 5.8%CoreLogic 8.3%FHFA (4th Quarter) 5.5%
  • 21. S&P Case-Shiller Home Price Indices Metropolitan Area Year-over-Year Metropolitan Area Year-over-YearAtlanta 9.9% Miami 10.6%Boston 3.6% Minneapolis 12.2%Charlotte 5.3% New York -0.5Chicago 2.2% Phoenix 23.0%Cleveland 2.9% Portland 6.5%Dallas 6.5% San Diego 9.2%Denver 8.5% San Francisco 14.4%Detroit 13.6% Seattle 8.2%Las Vegas 12.9% Tampa 7.2%Los Angeles 10.2% Washington 5.9% S&P Case Shiller 2/2013
  • 22. Home Prices in the Short Term150.00 2010-11 2011-12 2012-13 PROJECTED?145.00140.00135.00130.00 May June July Aug Sept Oct Nov Dec Jan Feb S&P Case Shiller 2/2013
  • 23. S&P Case-Shiller Home Price Indices Metropolitan Area M-o-M Metropolitan Area M-o-MAtlanta 0.3 Miami 0.8Boston 0.1 Minneapolis -0.1Charlotte -0.4 New York -0.4Chicago -0.7 Phoenix 0.9Cleveland -0.1 Portland -0.5Dallas -0.1 San Diego 0.4Denver -0.3 San Francisco 0.7Detroit -0.6 Seattle -0.5Las Vegas 1.8 Tampa 0.2Los Angeles 1.1 Washington -0.1 S&P Case Shiller 2/2013
  • 24. 30 Year Fixed Rate Mortgage History5.25 54.75 4.5 2/2011 – 3/20134.25 43.75 3.53.25 Federal Reserve 3/1/2013
  • 25. Mortgage Rates Moving Forward“After reaching record lows in 2012,mortgage rates are expected to creep upslowly in 2013, the Mortgage BankersAssociation (MBA)predicted.” The MBA projects 30 year mortgage rates will hit 4.4% by the end of the year.MarketWatch 10/24/2012
  • 26. Mortgage Rates - 30 year fixed 3.6 12/01/2012 – 3/1/2013 3.55 3.5 3.45 3.4 3.35 3.3 Freddie Mac 3/1/2013
  • 27. Impact of Increasing Rates Price Rate P&I 200,000 3.4 886.96 200,000 4.4 1,001.52 Monthly Savings $114.56
  • 28. Bernanke on Interest Rates“If, as the Federal Open Market Committee (FOMC)anticipates, the economic recovery continues at a moderatepace, with unemployment slowly declining and inflationexpectations remaining near 2 percent, then long-terminterest rates would be expected to rise graduallytoward more normal levels over the next several years…The precise timing and pace of theincrease will depend importantly on howeconomic conditions develop, however,and is subject to considerable two-sideduncertainty.” Federal Reserve 3/1/2013
  • 29. Housing America’s Future:New Directions for National Policy“The report proposed a reformed system of housing financein which the private sector plays a far more prominent role inbearing credit risk while promoting a greater diversity offunding sources available for mortgage financing.The problems we face in housing are sosignificant and so urgent today that inactionis no longer a viable option… It is thereforethe commission’s hope that 2013 will be theyear that Congress and the administrationfinally elevate housing to the top of thenational policy agenda and give housingthe dedicated attention it deserves.” Bipartisan Policy Center 3/1/2013
  • 30. Percentage of Distressed Property Sales35% 35%30%25% 23%20% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan NAR 2/2013
  • 31. Shadow Inventory “Shadow inventory never hit full force, so now I think we’re at a point where the pendulum has swung completely the other way and the housing market needs more inventory, so 2013 would be a serendipitous time for banks to release that inventory.” Daren Blomquist, VP of RealtyTrac He expects 600,000 REOs in 2013 and short sales to exceed the 2012 number, which will likely be around 1 million.DSNews 2/22/2013
  • 32. FORECLOSURES CNN Money 2013100 hardest hit zips in 2012
  • 33. CoreLogic 2/28/2013
  • 34. Short Sales Moving Forward “Short sales don’t seem to be going away anytime soon...I think 2013 and 2014 are going to be all about the short sale.” Wingspan Portfolio Advisors CEO Steven Horne “I think we’re going to set a new record for short sales in 2013.” Rick Sharga, EVP of Carrington MortgageHousingWire 2/21/2013
  • 35. Login to KCM and download your copy
  • 36. How are you preparing for real estate’s new market reality? FREE
  • 37. Building Trust is Important “Weary of misinformation, people are making integrity a new form of competitive advantage… More important than ever to building brand equity and differentiation, trust has become a precious commodity.” Ford 2013
  • 38. ResourcesSlide Slide Title Link3,4,7,8, Pending Home Sales, Month’s Inventory of Homes for Sale5 New Home Sales Political Uncertainty exception10 Existing Home Inventory New Home Inventory january.html18 FHFA State Home Prices,21, S&P Case Shiller Home Price Indices, Home,24, Prices in the Short Term, Year Over Year Price 4534799496625 Increases Year Over Year Price Increases ceIndex.aspx, Pages/LPSHomePriceIndex.aspx 30 Year Fixed Rate Mortgage History,25, 27 Mortgage Rates Mortgage Rates Moving Forward, Impact of, 28 Increasing Rates 10-24 KEEPINGCURRENTMATTERS.COM
  • 39. ResourcesSlide Slide Title Link29 Bernake on Interest Rates Housing America’s Future Percentage of Distressed Property Sales Shadow Inventory 2233 Foreclosures Largest Foreclosure Inventory january-2013.pdf Short Sales Moving Forward next-two-years39 Building Trust is Important KEEPINGCURRENTMATTERS.COM