0
KCM Divided into
Three Sections
Are They Going
Up or Down?
Home
Sales
100 = Historically Healthy Level
Pending Home Sales
NAR 3/2014
Existing Home Sales
NAR 3/2014
-19.1%
-6%
3.9%
15.2%
19.4%
37.5%
-20%
-10%
0%
10%
20%
30%
40%
$0-100K
$100-
250K
$250-
500K
$500-
750K
$750K-1M $1M+
% Sa...
-44%
-16%
18%
23%
-45%
-35%
-25%
-15%
-5%
5%
15%
25%
Short Sales REOs
Existing Home
Sales
New
Construction
%Sales +/- -44%...
“While many fret that existing housing sales have
recently been slumping, the angst is misplaced. Since
early last year sa...
-24%
-20.8%
-16.8%
-14%
-13%
-7.6%
-5%
-6.2%
1.8% 0.9%
5%
1.6%
7.3%
5.3%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
Jan Feb
Marc
h
...
Months Inventory of Homes for Sale
NAR 3/2014
5-6 Months = Normal Market Inventory
HOME
PRICES
100.00
120.00
140.00
160.00
180.00
200.00
220.00
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 201...
100.00
120.00
140.00
160.00
180.00
200.00
220.00
2006 2007 2008 2009 2010 2011 2012 2013 2014
United States Home Prices
as...
- CoreLogic 3/2014
“Home prices nationwide remain
16.9% below their peak, which
was set in April 2006.”
MILLENNIALS
1.) In 19 of the 20 large metro areas surveyed, more than 5%
of all residents indicated they wanted to buy a home in the
n...
31%
30%
30%
9%
Millennials
Gen X
Boomers
Silent Generation
NAR 2014
Percentage of Buyers
by Generation
"No other cohort of adults is nearly as
confident about their economic future
as the Millennials are right now.
This is de...
MILLENNIALS are
ready to buy homes…
of Millennials plan to purchase
a home in the future
85% increased their interest in p...
Happiness - 62%
Independence - 61%
Achievement - 59%
Millennials: Associate Owning A Home with…
Pulte Group 2014
Baby Boomers
are ready to move!
BH&G 2014
Baby Boomers ready to move…
of Boomers plan to move from
the home they currently own
57%
Plan to stay in the sta...
“The oldest Baby Boomer turns 68 this year, and
the youngest turns 50. They are buying homes
in droves as their employment...
Vacation Home Sales
553K
717K
2012 2013
UP 29.7%
NAR 2014
We Must…
"Certainly, at these levels,
mortgage rates should not be a
significant deterrent to buying, let
alone considered „high‟ b...
FEAR
"One thing seems certain:
we are not likely to see
average 30-year fixed mortgage
rates return to the historic lows
experi...
Decade Average Rate Payment
1970s 8.86% $1,589
1980s 12.7% $2,166
1990s 8.12% $1,484
2000s 6.29% $1,237
2014 YTD 4.36% $99...
3.25
3.5
3.75
4
4.25
4.5
4.75
2013 - 2014
30 Year Fixed
Mortgage Rates
Freddie Mac 3/2014
1/2013 4/2014
4.4
4.7
4.9
5.1
5.3
5.5
5.7
Freddie Mac
Projected Rates
April 2014 – 2015 4Q
Mortgage Rate
Projections
Analyst Projected Rate
2015 4Q
Fannie Mae 5%
Freddie Mac 5.7%
Mortgage Bankers Assoc 5.3%
3/2014
Date Mortgage Interest Rate* P&I**
Today $250,000 4.41% $1,253.38
End of 2015 $270,000 5.7% $1,567.08
*Average Commitment ...
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov D...
S&P Case-Shiller Home Price Indices
S&P Case Shiller 3/2014
RETURN ON INVESTMENT
51.1
35.2
8.3
65.7
Dow S&P NASDAQ Real Estate
January 2000 – April 2014
MSN Money.com, Case Shiller
Months Inventory of Homes for Sale
NAR 3/2014
5-6 Months =
Normal Market
Inventory
Months 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 Ma...
NAR 3/2014
10%
15%
20%
25%
30%
35%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct...
Resources
Slide Slide Title Link
5,6,10,11,4
1,42,43
Pending Home Sales, Existing Home Sales, Year-
over-Year Inventory, M...
Resources
Slide Slide Title Link
26, 53 Vacation Home Sales Up
http://www.realtor.org/news-releases/2014/04/vacation-home-...
“I needed a real estate agent
in 1997 because I didn‟t have
a password to the MLS .”
Daniel Pink
Bestselling Author of Dri...
“The minute real estate listings went
online was the minute that it was no
longer sufficient that a real estate
broker mer...
“To provide value, real estate
agents must not only provide
information but also insights
into that information.”
Guy Kawa...
- CoreLogic 3/2014
“Home prices nationwide remain
16.9% below their peak, which
was set in April 2006.”
Happiness - 62%
Independence - 61%
Achievement - 59%
Millennials: Associate Owning A Home with…
Pulte Group 2014
Date Mortgage Interest Rate* P&I**
Today $250,000 4.41% $1,253.38
End of 2015 $270,000 5.7% $1,567.08
*Average Commitment ...
Vacation Home Sales
553K
717K
2012 2013
UP 29.7%
NAR 2014
"One thing seems certain:
we are not likely to see
average 30-year fixed mortgage
rates return to the historic lows
experi...
So you Want
to be an Agent
Naea 04-14
Naea 04-14
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Transcript of "Naea 04-14"

  1. 1. KCM Divided into Three Sections
  2. 2. Are They Going Up or Down? Home Sales
  3. 3. 100 = Historically Healthy Level Pending Home Sales NAR 3/2014
  4. 4. Existing Home Sales NAR 3/2014
  5. 5. -19.1% -6% 3.9% 15.2% 19.4% 37.5% -20% -10% 0% 10% 20% 30% 40% $0-100K $100- 250K $250- 500K $500- 750K $750K-1M $1M+ % Sales +/- -19.1% -6% 3.9% 15.2% 19.4% 37.5% Percentage Change in Sales from a Year Ago by Price Range NAR 3/2014
  6. 6. -44% -16% 18% 23% -45% -35% -25% -15% -5% 5% 15% 25% Short Sales REOs Existing Home Sales New Construction %Sales +/- -44% -16% 18% 23% Percentage Change in Sales from a Year Ago by Category Home Sales CoreLogic 3/2014
  7. 7. “While many fret that existing housing sales have recently been slumping, the angst is misplaced. Since early last year sales have declined 7%, but distressed sales as a percentage of all sales have fallen from 25% of sales to just 15%… Thus, the total volume of non-distressed sales is higher than it was a year ago. Relax.” Elliot F. Eisenberg Ph.D. GraphsandLaughs, LLC
  8. 8. -24% -20.8% -16.8% -14% -13% -7.6% -5% -6.2% 1.8% 0.9% 5% 1.6% 7.3% 5.3% -25% -20% -15% -10% -5% 0% 5% 10% Jan Feb Marc h April May June July Aug Sept Oct Nov Dec Jan Feb % -24% -20.8 -16.8 -14% -13% -7.6% -5% -6.2% 1.8% 0.9% 5.0% 1.6% 7.3% 5.3% NAR 3/2014 Year-over-Year Inventory Levels
  9. 9. Months Inventory of Homes for Sale NAR 3/2014 5-6 Months = Normal Market Inventory
  10. 10. HOME PRICES
  11. 11. 100.00 120.00 140.00 160.00 180.00 200.00 220.00 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 United States Home Prices as per Case Shiller Composite 20 City Index Case Shiller
  12. 12. 100.00 120.00 140.00 160.00 180.00 200.00 220.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 United States Home Prices as per Case Shiller Composite 20 City Index Case Shiller
  13. 13. - CoreLogic 3/2014 “Home prices nationwide remain 16.9% below their peak, which was set in April 2006.”
  14. 14. MILLENNIALS
  15. 15. 1.) In 19 of the 20 large metro areas surveyed, more than 5% of all residents indicated they wanted to buy a home in the next year. 2.) Among current renters, homeownership aspirations were particularly strong, with about 10% of all renters nationwide saying they would like to buy within the next 12 months. 3.) The vast majority of these respondents also said they were confident or somewhat confident they could afford homeownership now. 4.) If all renters that indicated they wanted to buy actually did purchase a home in the next year, it would represent more than 4.2 million first-time home sales, more than double the roughly 2.1 million first-time home buyers in 2013. Are 4.2M First Time Buyers about to Buy? Zillow 3/2014
  16. 16. 31% 30% 30% 9% Millennials Gen X Boomers Silent Generation NAR 2014 Percentage of Buyers by Generation
  17. 17. "No other cohort of adults is nearly as confident about their economic future as the Millennials are right now. This is definitely a change… With an increased sense of optimism, this generation is starting to feel as though they have the resources available to lead the lives they want or expect to in the future." Jim Zeumer Pulte Group VP Corporate Communications
  18. 18. MILLENNIALS are ready to buy homes… of Millennials plan to purchase a home in the future 85% increased their interest in purchasing a home in the past year as the positive attributes of homeownership resonate with this generation 58% plan to purchase a home in the next two years 49% Of those planning to buy in the near-term: 56%are current homeowners 41%are renters Pulte Group 2014
  19. 19. Happiness - 62% Independence - 61% Achievement - 59% Millennials: Associate Owning A Home with… Pulte Group 2014
  20. 20. Baby Boomers are ready to move!
  21. 21. BH&G 2014 Baby Boomers ready to move… of Boomers plan to move from the home they currently own 57% Plan to stay in the state they are currently living in 72% said they’d likely buy a second home, such as a vacation or beach house, to use during retirement 25% don’t expect to live with other generations of their family 83%
  22. 22. “The oldest Baby Boomer turns 68 this year, and the youngest turns 50. They are buying homes in droves as their employment situation, home values, and stock portfolios have almost fully recovered from the Great Recession. We are seeing strong sales in this same demographic throughout the country.” John Burns Real Estate Consulting Boomers are starting to move…
  23. 23. Vacation Home Sales 553K 717K 2012 2013 UP 29.7% NAR 2014
  24. 24. We Must…
  25. 25. "Certainly, at these levels, mortgage rates should not be a significant deterrent to buying, let alone considered „high‟ by any stretch of the imagination, but for some, perhaps they seem so." HSH.com
  26. 26. FEAR
  27. 27. "One thing seems certain: we are not likely to see average 30-year fixed mortgage rates return to the historic lows experienced in 2012." Freddie Mac
  28. 28. Decade Average Rate Payment 1970s 8.86% $1,589 1980s 12.7% $2,166 1990s 8.12% $1,484 2000s 6.29% $1,237 2014 YTD 4.36% $997 The average 30-year fixed mortgage rates and the approximate payment for a $200,000 mortgage. Payments are principal & interest only, based on a $200,000 fully amortizing mortgage. All terms are assumed to be 30 years. Freddie Mac 3/2014 Historic Mortgage Rates by Decade
  29. 29. 3.25 3.5 3.75 4 4.25 4.5 4.75 2013 - 2014 30 Year Fixed Mortgage Rates Freddie Mac 3/2014
  30. 30. 1/2013 4/2014 4.4 4.7 4.9 5.1 5.3 5.5 5.7 Freddie Mac Projected Rates April 2014 – 2015 4Q
  31. 31. Mortgage Rate Projections Analyst Projected Rate 2015 4Q Fannie Mae 5% Freddie Mac 5.7% Mortgage Bankers Assoc 5.3% 3/2014
  32. 32. Date Mortgage Interest Rate* P&I** Today $250,000 4.41% $1,253.38 End of 2015 $270,000 5.7% $1,567.08 *Average Commitment Rate per Freddie Mac **Principal and Interest Payment Difference in Monthly Payment $313.70
  33. 33. 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan S&P Case Shiller 3/2014 Year-over-Year Change in Prices
  34. 34. S&P Case-Shiller Home Price Indices S&P Case Shiller 3/2014
  35. 35. RETURN ON INVESTMENT 51.1 35.2 8.3 65.7 Dow S&P NASDAQ Real Estate January 2000 – April 2014 MSN Money.com, Case Shiller
  36. 36. Months Inventory of Homes for Sale NAR 3/2014 5-6 Months = Normal Market Inventory
  37. 37. Months 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 Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb 5-6 Months = Normal Market Inventory NAR 3/2014
  38. 38. NAR 3/2014 10% 15% 20% 25% 30% 35% 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 Percentage of Distressed Property Sales 35% 16% 23%
  39. 39. Resources Slide Slide Title Link 5,6,10,11,4 1,42,43 Pending Home Sales, Existing Home Sales, Year- over-Year Inventory, Months Inventory, Months Inventory Chart, Months Inventory Graph, % Distressed Property Sales http://www.realtor.org/ 7 % Change In Sales by Price Range http://economistsoutlook.blogs.realtor.org/2014/02/23/a-closer-look-at-the-latest-ehs-release/ 8 % Change in Sales by Category http://www.corelogic.com/blog/authors/molly-boesel/2014/03/home-sales-increased-by-8- percent-year-over-year-in-february.aspx#.UzG70WePK74 9 Elliot F. Eisenberg Quote http://econ70.com/2014/03/26/housing-holds/ 13, 14 United State Home Prices http://us.spindices.com/index-family/real-estate/sp-case-shiller 15, 50 CoreLogic Quote http://www.corelogic.com/research/hpi/corelogic-hpi-february-2014.pdf 17 First Time Buyers http://zillow.mediaroom.com/index.php?s=159&item=422 18 Percentage of Buyers by Generation http://www.realtor.org/reports/home-buyer-and-seller-generational-trends 19 Population 20-34 Years http://www.calculatedriskblog.com/2014/03/the-favorable-demographics- for.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+CalculatedRi sk+%28Calculated+Risk%29 20, 21, 22, 51 Jim Zeumer Quote, Millennials are Ready, Millennials Associate Owning A Home with… http://www.pultegroupinc.com/investors/press-releases/press-release-details/2014/Better-Days- Ahead-Millennials-Think-So/default.aspx 24 Baby Boomers Ready http://www.bhgrealestate.com/Views/MediaCenter/News.aspx?id=3122 25 Boomers are starting to move… http://realestateconsulting.com/blog/lesley-deutch/affluent-second-home-buyers-are-back- droves KEEPINGCURRENTMATTERS.COM
  40. 40. Resources Slide Slide Title Link 26, 53 Vacation Home Sales Up http://www.realtor.org/news-releases/2014/04/vacation-home-sales-surge-in-2013-investment- property-declines 28 HSH.com Quote http://www.hsh.com/trends.html#archives 30, 31, 54 Freddie Mac Quote, Historic Mortgage Rates http://www.freddiemac.com/blog/research_and_analysis/20140324_dirt_cheap_to_cheap.html 32,33 30 Year Fixed Rate, Projected Rates http://www.freddiemac.com/pmms 34, 35 Mortgage Rate Projections http://fanniemae.com/resources/file/research/emma/pdf/Housing_Forecast_011314.pdf http://www.freddiemac.com/finance/docs/Jan_2014_public_outlook.pdf http://www.mortgagebankers.org/files/Bulletin/InternalResource/86783_.pdf 36, 52 Cost of Waiting http://www.freddiemac.com/pmms 38, 39 Year-over-Year Change in Prices, Case Shiller HPI https://www.spice-indices.com/idpfiles/spice- assets/resources/public/documents/83930_cshomeprice-release- 0325.pdf?force_download=true 40 Return on Investment http://www.spindices.com/index-family/real-estate/sp-case-shiller http://money.msn.com/ 47-49 Daniel Pink, Seth Godin, & Guy Kawasaki Quotes LeadingRE Conference 2014 KEEPINGCURRENTMATTERS.COM
  41. 41. “I needed a real estate agent in 1997 because I didn‟t have a password to the MLS .” Daniel Pink Bestselling Author of Drive
  42. 42. “The minute real estate listings went online was the minute that it was no longer sufficient that a real estate broker merely had information about real estate listings.” Seth Godin Author, Entrepreneur, Marketer and Public Speaker
  43. 43. “To provide value, real estate agents must not only provide information but also insights into that information.” Guy Kawasaki Silicon Valley Author, Speaker, Investor and Business Advisor
  44. 44. - CoreLogic 3/2014 “Home prices nationwide remain 16.9% below their peak, which was set in April 2006.”
  45. 45. Happiness - 62% Independence - 61% Achievement - 59% Millennials: Associate Owning A Home with… Pulte Group 2014
  46. 46. Date Mortgage Interest Rate* P&I** Today $250,000 4.41% $1,253.38 End of 2015 $270,000 5.7% $1,567.08 *Average Commitment Rate per Freddie Mac **Principal and Interest Payment Difference in Monthly Payment $313.70
  47. 47. Vacation Home Sales 553K 717K 2012 2013 UP 29.7% NAR 2014
  48. 48. "One thing seems certain: we are not likely to see average 30-year fixed mortgage rates return to the historic lows experienced in 2012." Freddie Mac
  49. 49. So you Want to be an Agent
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