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Naea 07-13
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Naea 07-13

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  • 1. KCM Divided into Three Sections
  • 2. 90 95 100 105 110 115 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Pending Home Sales NAR 6/2013 100 = Historically Healthy Level
  • 3. 80 90 100 110 120 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2013 2012 2011 January 2012 – December 2012 100 = Historically Healthy Level Pending Home Sales NAR 6/2013
  • 4. 5000 5200 5400 5600 5800 6000 6200 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 ProjectedActual Home Sales in thousands NAR 6/2013
  • 5. Median Region $0-100K $100- 250K $250- 500K $500- 750K $750K-1M $1M+ $269,600 Northeast -2.7% 3.8% 17.6% 23.9% 36.3% 24.8% $159,800 Midwest 1.5% 19.7% 35.7% 36.2% 53.8% 48% $183,300 South -6.3% 23.2% 36.5% 34.2% 40.6% 24.9% $276,400 West -47% .5% 23.6% 38.1% 63.9% 49.8% $208,000 U.S. -9.3% 14.3% 28.2% 32.8% 49.8% 36.9% Year-Over-Year Sales by Price Point WEST MIDWEST SOUTH NORTHEAST NAR 6/2013
  • 6. Median Days on Market by Type NAR, RCI Survey 6/2013
  • 7. Be Able to Address the Issue of a Possible Bubble in Housing
  • 8. -60 -50 -40 -30 -20 -10 0 10 20 30 Last 12 Months Since Peak Price Changes as per Case Shiller Case Chiller
  • 9. “Inventories of existing homes are as low as they were in 2000. New-home inventories have barely budged from a 50-year low. As a consequence, there are only 5 months of inventory for existing homes and 4 months for new homes, compared with 6 months when market conditions are normal… Moreover, housing is at least fairly valued, if not undervalued. The boom and bust in housing left house price gains far behind income and rent gains.” Celia Chen Senior Director of the Moody's Analytics Research Staff Moody’s Economy Are Properties Overvalued?
  • 10. 28% 26% 0% 0% 5% 10% 15% 20% 25% 30% Income Rent House Prices Gains as Measured Between the First Quarters of 2004 and 2013 Moody’s Economy
  • 11. http://www.economist.com/blogs/graphicdetail/2013/06/us-house-prices
  • 12. Where are mortgage rates headed?
  • 13. Mortgage Rate ProjectionsMortgage Rate Projections Analyst Projected Rate 3Q 2014 Mortgage Bankers Assoc 4.6% Fannie Mae 4.6% National Assoc of Realtors 4.8% Freddie Mac 4.6% 7/2013
  • 14. 30 Year Fixed Rate Mortgage History 1/2012 – 7/2013 Federal Reserve 7/2013
  • 15. Date Price Interest Rate P&I Last Year $200,000 3.5% $898.09 This Year $220,000 4.5% $1,114.71 Difference in Payment - $216.62 The Cost of Waiting a Year
  • 16. Over 12 Months - $2,599.44 Over 30 Year Mortgage - $77,983.20
  • 17. 30 Year Fixed Rate Mortgage Recent Rate Movement 3 3.25 3.5 3.75 4 4.25 4.5 4.75 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 4/4 4/11 4/18 4/25 5/2 5/9 5/16 5/23 5/30 6/6 6/13 6/20 6/27 Rate 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 3.43 3.41 3.4 3.35 3.42 3.51 3.59 3.81 3.91 3.98 4.1 4.6
  • 18. “I don’t think the Fed ultimately would be troubled with a 6.5% mortgage rate.” Doug Duncan Chief Economist for Fannie Mae Inman News
  • 19. "As the economy continues to improve, we expect to see continued upward movement in long-term interest rates… At today’s house prices and income levels, mortgage rates would have to be nearly 7 percent before the U.S. median priced home would be unaffordable to a family making the median income in most parts of the country.” Frank Nothaft Freddie Mac VP and Chief Economist Freddie Mac
  • 20. Rate $100,000 $200,000 $300,000 $400,000 $500,000 6.00 599.55 1,199.10 1,798.65 2,398.20 2,997.75 5.75 583.57 1,167.15 1,750.72 2,334.29 2,917.86 5.50 567.79 1,135.58 1,703.37 2,271.16 2,838.95 5.25 552.20 1,104.41 1,656.61 2,208.81 2,761.02 5.00 536.82 1,073.64 1,610.46 2,147.29 2,684.11 4.75 521.65 1,043.29 1,564.94 2,086.59 2,608.24 4.50 506.69 1,013.37 1,520.06 2,026.74 2,533.43 Mortgage Amount
  • 21. NAR 6/2013 15% 20% 25% 30% 35% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Percentage of Distressed Property Sales 35% 18%
  • 22. Campbell/Inside Mortgage Finance HousingPulse Tracking Survey 6/2013 43.8% 36% 20.2% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% Current Homeowners First Time Buyers Investors Breakdown of Today’s Purchasers
  • 23. WSJ 6/2013 Agents Who Specialize… in a small geographic area compared to agents who list homes in a large area: 1.Were 4% more likely to sell the home 2.Sell homes for 1.21% more 3.Sell homes above the median price for 1.71% more 4.Sell the home in 5.5 fewer days
  • 24. Return on Investment 37.1 16 -12.8 52.4 -30 0 30 60 Dow S&P NASDAQ Real Estate January 2000 – July 2013 MSN Money.com, Case Shiller
  • 25. Months Inventory of Homes for Sale 4.0 5.0 6.0 7.0 8.0 9.0 10.0 Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May NAR 6/2013 5-6 Months = Normal Market Inventory
  • 26. S&P Case Shiller 6/2013 S&P Case-Shiller Home Price Indices
  • 27. -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% 9.3% 10.2% 12.1% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Year-over-Year Change in Prices Jan Feb Mar Apr May S&P Case Shiller 6/2013 S&P Case-Shiller Home Price Indices
  • 28. Metropolitan Area Year-over-Year Atlanta 20.8% Boston 8.1% Charlotte 7.3% Chicago 9.3% Cleveland 4.8% Dallas 7.4% Denver 9.9% Detroit 19.8% Las Vegas 22.3% Los Angeles 18.8% Metropolitan Area Year-over-Year Miami 13.0% Minneapolis 14.8% New York 3.2% Phoenix 21.5% Portland 12.9% San Diego 14.7% San Francisco 23.9% Seattle 11.4% Tampa 11.3% Washington 7.2% S&P Case-Shiller Home Price Indices S&P Case Shiller 5/2013
  • 29. MARKETING
  • 30. Opening Doors with POWERFUL MARKETING
  • 31. 8.69 Average Mortgage % Rate 1972-2012 HISTORICALLY 4.29 Today’s Mortgage % Rate CURRENTLY In the FUTURE? “I don’t think the Fed ultimately would be troubled with a 6.5% mortgage rate.” - Doug Duncan, Chief Economist at Fannie Mae 6/2013 before the financial crisis 6.06 Average after the financial crisis 4.78 Average $3,761.52 The annual difference in mortgage payment (P&I) on a $250,000 home loan if rates go from 4.5 to 6.5%. HOME MORTGAGE INTEREST RATES (30 YEAR FIXED) Freddie Mac Rates KCM %
  • 32. Rate $100,000 $200,000 $300,000 $400,000 $500,000 6.00 599.55 1,199.10 1,798.65 2,398.20 2,997.75 5.75 583.57 1,167.15 1,750.72 2,334.29 2,917.86 5.50 567.79 1,135.58 1,703.37 2,271.16 2,838.95 5.25 552.20 1,104.41 1,656.61 2,208.81 2,761.02 5.00 536.82 1,073.64 1,610.46 2,147.29 2,684.11 4.75 521.65 1,043.29 1,564.94 2,086.59 2,608.24 4.50 506.69 1,013.37 1,520.06 2,026.74 2,533.43 Mortgage Amount
  • 33. z Year-Over-Year change from NAR June 2013 Single Family Residential Condominiums & Co-ops UP 15.8% UP 12.7% UP 11.8% UP 13.7%
  • 34. % Year-Over-Year Sales Increases by Price Point
  • 35. Current % Price Change:
  • 36. Source: WSJ 6/2013 4 REASONS to USE an AGENT4 REASONS to USE an AGENT who SPECIALIZES inwho SPECIALIZES in YOURYOUR AREAAREA HOMES SELL QUICKER HOMES SELL FOR 1.21% MORE HOMES OVER MEDIAN PRICE SELL FOR 1.71% MORE HOMES ARE MORE LIKELY TO SELL
  • 37. http://terribuseman.wordpress.com/2013/06/13/are-we-approaching-another-housing-bubble/
  • 38. Resources KEEPINGCURRENTMATTERS.COM Slide Slide Title Link 4,5 Pending Home Sales, Month’s Inventory of Homes for Sale http://www.realtor.org 7 Year-Over-Year Sales by Price Point http://economistsoutlook.blogs.realtor.org/page/4/ 8 Median Days on Market by Type http://economistsoutlook.blogs.realtor.org/2013/06/25/median-days-on-the-market-down-to-41-days-in 10 Price Changes as per Case Shiller http://www.housingviews.com/2013/06/25/how-the-cities-did-in-april/ 11,12 Are Properties Overvalued, Gains as Measured Between the First Quarters of 2004 and 2013 http://www.economy.com/dismal/pro/article.asp?cid=240711 (Paid Service) 13 The Economist Index of US House Prices http://www.economist.com/blogs/graphicdetail/2013/06/us-house-prices 15 Mortgage Rate Projections http://www.mortgagebankers.org/files/Bulletin/InternalResource/84813_.pdf http://www.freddiemac.com/news/finance/docs/Jun_2013_public_outlook.pdf http://www.realtor.org/sites/default/files/reports/2013/embargoes/phs-6-27-hgbfjnv/july-2013-outlook-2 http://www.fanniemae.com/resources/file/research/emma/pdf/Housing_Forecast_061313.pdf 16,19 30 Year Fixed Rate Mortgage History, Recent Rate Movement http://www.freddiemac.com/pmms 20 Doug Duncan Quote http://www.inman.com/2013/06/24/experts-doubt-surge-in-mortgage-rates-will-derail-housing-recover
  • 39. Resources Slide Slide Title Link 21 Frank Nothaft Quote http://www.freddiemac.com/news/finance/docs/Jun_2013_public_outlook.pdf 23 Percentage of Distressed Property Sales http://www.realtor.org 24 Breakdown of Today’s Purchasers http://www.dsnews.com/articles/investor-activity-falls-sharply-in-may-2013-06-24 25 Agents Who Specialize http://online.wsj.com/article/SB10001424127887323844804578531554168068278.html? mod=WSJ_RealEstate_MansionWeekly 28 Months Inventory of Homes for Sale http://www.realtor.org 29,30,31 S&P Case-Shiller Home Price Indices http://www.housingviews.com/wp-content/uploads/2013/05/CSHomePrice_Release_March- Qtr1-Results.pdf 37 % Year-Over-Year Sales Increases by Price Point http://economistsoutlook.blogs.realtor.org/page/4/ 38 Current % Price Change http://www.housingviews.com/2013/06/25/how-the-cities-did-in-april 39 4 Reasons to Use an Agent who Specializes in Your Area http://online.wsj.com/article/SB10001424127887323844804578531554168068278.html? mod=WSJ_RealEstate_MansionWeekly 40 Are We Approaching Another Housing Bubble? http://terribuseman.wordpress.com/2013/06/13/are-we-approaching-another-housing-bubble KEEPINGCURRENTMATTERS.COM
  • 40. Build TRUST!