2013 California Housing Market Update and San Diego Area

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California Community Colleges Real Estate Educator’s Conference
February 22, 2013
Sara Sutachan, Manager of Broker and Real Estate Finance Outreach

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  • C.A.R. is making 12 hours of online CE education courses free to all members as part of their membership dues in 2013. This allows members a choice of courses they can take to become better educated on the issues important to their business.All courses offered are accredited by the DRE (Department of Real Estate)And with online delivery, members can take the courses at any time on a computer or tablet device. Begin you education today. To register for your 12 free hours of online CE courses – your newest member benefit from C.A.R., please visit store.car.org/12FreeCE
  • C.A.R. Finance Helpline is a financing resource for REALTORS®.This is a new, free member benefit.It was created for members with financing-related questions.Call the helpline to speak with a lender ombudsman who will assist members in closing transactions.
  • C.A.R. California Mortgage Directory Resource is a mortgage & financing resource for buyers – and REALTORS®.This is a new, free member benefit.It was created to help buyers find various home buyer assistance programs available to them.REALTORS® and buyers can quickly connect with any number of home buyer resources without having to search within each municipality individually.
  • Mortgage Forgiveness Debt Relief UpdateFor federal tax purposes, mortgage forgiveness debt relief on principal residences has been extended until December 31, 2013, under the federal American Taxpayer Relief Act of 2012, approved on January 2, 2013. As of the date of this publication, California has not conformed. Accordingly, taxpayers who had all or part of the loan balance on their principal residence forgiven by their lender after December 31, 2012, may continue to exclude the forgiven debt from their federal gross income only. Presently, for California tax purposes, the debt forgiven after December 31, 2012, may still be excluded if:Taxpayers were bankrupt when the discharge occurred (Title 11 discharge).Taxpayers were insolvent (limited to level of insolvency).Qualified farm indebtedness was canceled.Debt was Qualified Real Property Business Indebtedness (QRPBI) and you make a federal election. The taxpayer cannot be a C corporation to use this exclusion.
  • The index in Feb 2012 was at the highest level since Feb 2011.
  • CA: 11/12 9.8% 10/12 10.1% 9/12 10.2% 8/12 10.6% 7/12 10.7% 6/12 10.7% 5/12 10.8% 4/12 10.9% 3/12 11.0% 2/1210.9% 1/12 10.9% 12/11 11.1% 11/11 11.3% 10/11 11.7% 09/11 11.9% 08/11 12.1% 07/11 12.0% 06/11 11.8% 05/11 11.7% 04/11 12.0% 03/11 12.0% 02/11 12.1% 01/11 12.4% 12/10 12.5% 11/10 12.4% 10/10 12.4% 9/10 12.4% 8/10 12.4% 7/10 12.3% 6/10 12.3% 5/10 12.4% 4/10 12.5% 2/10 9 12.5% 1/10 12.5% 12/09 12.3% 11/09 12.3% 10/09 12.5% 9/09 12.3 8/09 12.3% 7/09 11.9% 6/09 11.6% 5/09 11.6% 4/09 11.1% 3/09 11.2% 2/09 10.6% 1/09 10.1% 12/08 8.7% US: 12/12 7.8% 11/12 7.8% 10/12 7.9% 9/12 7.8% 8/12 8.1% 7/12 8.3% 6/12 8.2% 5/12 8.2% 4/12 8.1% 3/12 8.2% 2/12 8.3% 1/12 8.3% 12/11 8.5% 11/11 8.7% 10/11 8.9% 09/11 9.0% 08/11 9.1% 07/11 9.1% 06/11 9.1% 05/11 9.0% 04/11 9.0% 03/11 8.9% 02/11 9.0% 01/11 9.0% 12/10 9.4% 11/10 9.8% 10/10 9.5% 9/10 9.5% 8/10 9.6% 7/10 9.5% 6/10 9.4% 5/10 9.6% 4/10 9.9% 3/10 9.8% 2/10 9.8% 1/10 9.7% 12/09 9.9% 11/09 10.0% 10/09 10.0% 9/09 9.8% 8/09 9.6% 7/09 9.5% 6/09 9.5% 5/09 9.4% 4/09 8.9% 3/09 8.5% 2/09 8.1% 1/09 7.6% 12/08 7.3% Based on revised figures during EDD’s early-2009 rebenchmarking, CA job market has been on a par with US market over past several months.SOURCE: http://www.labormarketinfo.edd.ca.gov/?pageid=164
  • “Core Inflation” is All Items Less Food and EnergyThe CPI data is seasonally adjusted.SOURCE:Go to http://www.economy.com/freelunch/fl_dictionary.asp?m=34174038-A1EF-4C70-9374-59144B50A3F5&h=H0022000400040002&f=0&c=undefinedFirst choose "All Items." "Monthly" and "Yr/Yr%" series. Then find "All items less food and energy" towards the bottom of the CPI list. Do the same as above.
  • Mortgage rate declines reflect continuing uncertainty and concerns about the US economy and political/economic concerns around the globe.  Federal Reserve officials expressed growing unease with the central bank's easy-money policies at its latest policy meeting and some suggested the Fed might need to pull them back before the job market is fully back to normal. Minutes released Wednesday of the Fed's Jan. 29-30 policy meeting showed that officials worried the central bank's easy-money policies could lead to instability in financial markets and might be hard to pull back in the future. The Fed plans to evaluate how the programs are doing at its next meeting March 19 and 20.  SOURCE:Fed funds - Haver AnalyticsFRM: http://www.freddiemac.com/pmms/pmms30.htmARM: http://www.freddiemac.com/pmms/pmmsarm.htm
  • - Low interest rates, combined with low home prices, result in more affordable homes in the market.
  • The mainstream FHA 30 year mortgage with a low down payment will require a 135 bps annual MIP to go with a 175 bps upfront fee. Note: FHA share of primary MI is for quarter when changes took effect.
  • Note: FHA share of primary MI is for quarter when changes took effect.
  • Average credit score for approved loans ~740Another source (Ellie Mae) reported average turned down loan 734 FICO and 19% down.
  • Issued: 2012 qtr 1 to 2012 qtr 4
  • Peak:624,957 units in 2005Valley:189,345 units in 19822012 annual sales up 5.4% from 20112011 annual sales up 1.2% from 20102010 annual sales down 10.0% from 20092009 annual sales up 23.8% from 20082008 annual sales up 27.3% from 20072007 annual sales down 27.3% from 20062006 annual sales down 23.6% from 20052005 annual sales up 0.03% from 20042004 annual sales up 3.8% from 20032003 annual sales up 5.1% from 20022002 annual sales up 13.6% from 2001 2001 annual sales down 5.9% from 2000 YTD2000 annual sales down 0.4 from 19991999 sales up 6.4% over 199810/93: 41.0Consumer Confidence01/00: 148.603/03: 63.05/07: 128.42/09: 23.9
  • Now up 8.7% from trough in Feb-09Peak: $560,270 in 2007Valley: $177,270 in 1996High: May 2007: $594,5302000 annual median price up 11.0% over 19992001 annual median price up 8.7% from 20002002 annual median price up 20.5% from 20012003 annual median price up 17.5% from 20022004 annual median price up 21.3% from 20032005 annual median price up 16.0% from 20042006 annual median price up 6.5% from 20052007 annual median price up 0.7% from 20062008 annual median price down 37.8% from 20072009 annual median price down 21.1% from 20082010 annual median price up 10.2% from 20092011 annual median price down 6.2% from 20102012 annual median price up 11.6% from 2011
  • Core Logic: http://www.corelogic.com/about-us/news.aspxFHFA: http://www.fhfa.gov/Default.aspx (quarterly) http://www.fhfa.gov/Default.aspx?Page=85Zillow: http://www.zillow.com/local-info/Case-Shiller: http://caseshiller.fiserv.com/fiserv-case-shiller-home-price-index-changes.aspx (quarterly)Radar Logic: http://radarlogic.com/news/news_pressreleases.htm (2 month lag)Existing-Homes: NARNew Homes: http://www.census.gov/construction/nrs/Trulia: http://info.trulia.com/press-releases
  • If you add in underwater borrowers –> the Shadow story is Real but not coming2.2m/18k = ~10yrs
  • MLS - SANDICOR
  • Red line represents approximate number of new households per year (estimated range: 220 to 250 thousand per year)
  • These are the qualities agents should market in their value propositions because it is what buyers are seeking.
  • 2013 California Housing Market Update and San Diego Area

    1. 1. 2013 CALIFORNIA HOUSING MARKET OUTLOOKCalifornia Community Colleges Real Estate Educator’sConferenceFebruary 22, 2013Sara Sutachan, Manager of Broker and Real EstateFinance Outreach
    2. 2. 2013 New Member Benefit: 12 FREE Hours Online CE CoursesC.A.R.’s newest member benefitDelivered online – available 24/7Choose from over 20 coursesLearn from most tablet devicesAccredited by the DRE store.car.org/12FreeCE
    3. 3. C.A.R. Finance Helpline Finance.car.org (213) 739-8383 Get one-on-one assistance with shortsales, funding, REOs, Deeds in Lieu, and closing transactions.
    4. 4. California Mortgage Directory ResourceMortgage.car.org One-stop online resource to find publicand private funded assistance programsincluding FHA/VA, HUD, affordable fixed- rate mortgages, rehab loans, and more.
    5. 5. THE ECONOMY
    6. 6. Signs of General Economic Recovery1. Fiscal cliff (and recession “relapse”) avoided2. December Jobs report exceeded expectations3. Unemployment rate at 7.8%4. Fed will keep rates low until U = 6.5%5. “QE” (Quantitative Easing) continues6. Euro-zone still holding it together despite stagnant/negative growth
    7. 7. “Fiscal Cliff Agreement”1. Tax Rates on income and capital gains/dividends higher for individuals making $400K or households making $450K2. Estate tax increases for individual estates over $5M and family estates over $10m3. 2% payroll tax cut expired as scheduled4. LT unemployment benefits extended for 1 year5. Mortgage debt forgiveness extended for 1 year6. AMT patch for middle class7. “Pease Limitation” on itemized deductions reinstituted for $250 AGI or couples making $300 AGI (above limit X 3%)
    8. 8. GDP: Sub-Par Growth, Sluggish Recovery 2012: 2.2%; 2012 Q4: -0.1%ANNUAL PERCENT CHANGE, CHAIN-TYPE (2005) $ 5% 4% ANNUALLY QUARTERLY 3% 2% 1% 0% -1% -2% -3% 2009 Largest Annual Drop since 1938 (-3.4%) -4%
    9. 9. Personal Consumption 2012 Q4: 2.2%QUARTERLY PERCENT CHANGE 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% -5% -6%SOURCE: US Dept of Commerce,Bureau of Economic Analysis
    10. 10. Consumers Weary, De-LeveragingConsumer Confidence Reflects Economic Realities January 2013: 58.6INDEX, 100=1985 120 100 80 60 40 20 0
    11. 11. Unemployment Rates Coming Down California (9.8%) vs. United States (7.8%) 14% US-CA CA US 12% 10% 8% 6% 4% 2% 0% -2% -4%SOURCE: CA Employment Development Division
    12. 12. Only 54% of Lost Jobs Replaced to Date U.S. Jobs: Month to Month Changes Recession Job Losses: 8.8 million 800,000 Since Jan’10: +4.5 million 600,000 400,000 200,000 0 -200,000 -400,000 -600,000 -800,000 -1,000,000SOURCE: CA Employment Development Division
    13. 13. CA Employment By Region Strongest Regional Economy: SF Bay Area Nonfarm Employment (Thousands) (Thousands) Nov 2012 Nov 2011 Change % Change Southern California 8,026.9 7,902.1 124.8 1.6% Bay Area 3,197.6 3,104.3 93.3 3.0% Central Valley 1,877.9 1,858.1 19.8 1.1% Central Coast 491.8 477.5 14.3 3.0% North Central 129.5 127.2 2.3 1.8% CALIFORNIA 14,406.4 14,137.8 268.6 1.9%SOURCE: CA Employment Development Division
    14. 14. SoCal Regions:Employment Nonfarm Employment (Thousands) (Thousands) Oct 2012 Oct 2011 Change % Change Los Angeles 3,885.3 3,827.5 57.8 1.5% Orange County 1,404.4 1,383.9 20.5 1.5% Riverside/SB 1,144.2 1,136.9 7.3 0.6% San Diego 1,261.6 1,238.1 23.5 1.9% Ventura 279.0 275.0 4.0 1.5% Southern California Total 7,974.5 7,861.4 113.1 1.4%SOURCE: California Economic Development Dept.
    15. 15. CPI : Inflation a No Show – For Now December 2012: All Items +1.7% YTY; Core +1.9% YTYPERCENT CHANGE FROM A YEAR AGO 6% All Items Core 5% 4% 3% 2% 1% 0% -1% -2% -3%SOURCE: U.S. Bureau of Labor Statistics
    16. 16. 2013: The Year of the “Political Economy”1. Fiscal Cliff Averted but Tax and Spend Decisions Await – 60 Day Deadline2. Tax Reform: Mortgage Interest Deductibility Mortgage Debt Forgiveness3. Future of Fannie and Freddie4. Future of FHA
    17. 17. Fiscal Cliff Averted: But in 60 days automatic spending cuts will be back unless….
    18. 18. Federal Budget Receipts & Outlays as Percentage of GDP Receipts Outlays 26 24 22 20 18 16 14 12 10Source: Office of Management & Budget
    19. 19. Signs of U.S. Housing Recovery1. Prices have bottomed!2. Home equity up 20% last year to $7.71Trillion as rising prices begin to reverse negative equity3. New and Existing Home Sales at four- year highs4. Low inventory across the board5. Housing starts at four-year high6. Threat of shadow inventory fading as delinquencies, foreclosures decline7. Foreclosure starts at 6 year low
    20. 20. Mortgage Rates @ 50 Year Lows 8% FRM ARM Federal Funds 7% 6% 5% 4% 3% 2% 1% 0%SOURCE: Federal Home Loan Mortgage Corporation
    21. 21. CA Prices Still Below Trend Line Spells Opportunity (1970-2013) $600,000 California $500,000 US CA Price Trend $400,000 $300,000 $200,000 $100,000 $0 2012 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
    22. 22. Housing Affordability at Record Highs % OF HOUSEHOLDS THAT CAN BUY 80% CA US 70% 60% 50% 40% 30% 20% 10% 0% Q1 2005 Q3 2005 Q1 2006 Q3 2006 Q1 2007 Q3 2007 Q1 2008 Q3 2008 Q1 2009 Q3 2009 Q1 2010 Q3 2010 Q1 2012 Q1 2011 Q3 2011SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
    23. 23. But there a few issues…1. Mortgage rates are low but credit is tight2. “Defensive” Lending is prevalent3. Appraisals lagging today’s market4. Listings are scarce: • Underwater homeowners are stuck • Investors are renting instead of flipping • Some sellers still don’t get it
    24. 24. Fannie & Freddie are the Market Today 87% of loans are purchased by the GSE’sSource: LPS CoreLogic
    25. 25. FHA Pricing Changes: 175bps Upfront Fees + 135bps MIP Pricing Changes Effective Action New Mortgage Date FHA Share Date Insurance Letter Announced Primary MI Premium 05-Apr-10 Increase up 225bps ML 2010-12 21-Jan-10 69.8% front MIP 04-Oct-10 Raise 100 bps ML 2010-28 01-Sep-10 63.1% Upfront MIP Lower 0 bps to 90 annual MIP bps 18-Apr-11 Increases 25 bps to ML 2011-10 14-Feb-11 61.3% annual MIP 115 bps by 25 bps 09-Apr-12 Raise annual 35 bps to ML 2012-04 06-Mar-12 45.6% MIP 10 bps 125 bps Add 25 bps 60 bps to for FHA 150 bps jumbo Source: Inside FHA Lending
    26. 26. FHA Price Changes Cont…PricingChangesEffective Action New Mortgag Date FHA ShareDate Insurance e Letter Announced Primary MI Premium Add 25 bps for 60 bps to FHA jumbo 150 bps Upfront MIP 175 bps increased 75 bps11-Jun-12 Lower MIP for 55bps ML 2012- 06-Mar-12 42.3% streamlined refi 04 Lower annual 1 bps MIP for streamlined refi01-Apr-13 Raise annual 45 bps to ML 2013- 31-Jan-13 MIP 10 bps 155 bps 04
    27. 27. FHA Underwriting Changes Underwritin g Changes Effective Action Mortgage Date FHA Share Date Letter Announced Primary MI 27-May-10 Allows streamlined ML 2010-19 27-May-10 69.8% refinances to be processed in TOTAL scorecard 07-Sep-10 Eliminates combined LTV ML 2010-24 06-Aug-10 66.3% ratio limits implemented in 2007 07-Sep-10 Eliminates requirement that ML 2010-36 22-Oct-10 66.3% sum of all liens be less than max loan limit 04-Oct-10 Limits LTV ratios for ML 2010-29 03-Sep-10 63.1% borrowers with FICO scores below 580 14-Feb-11 Clarifies FHA refinance ML 2011-11 14-Feb-11 61.5% mortgages must be current month before closing Source: Inside FHA
    28. 28. FHA Underwriting Changes Cont… Underwritin g Changes Effective Action Mortgage Date FHA Share Date Letter Announced Primary MI Clarifies net tangible benefit for FHA streamlined refinances 11-Sep-11 Clarifies annual MIP is zero ML 2011-35 53.1% for 15-year mortgages with LTV below 78% 13-Mar-12 Various changes in FHA refi ML 2012-05 13-Mar-12 47.9% program for underwater mortgages 01-Apr-13 Requires manual ML 2013-05 31-Jan-13 underwriting if FICO below 620 and DTI over 43% Source: Inside FHA
    29. 29. Average Credit Score Increased 26 points since 2005 For Purchase Loans AVERAGE FICO PURCHASE LOANS 745 740 735 730 725 720 715 710 705 700 2005 2006 2007 2008 2009 2010 2011 2012*SOURCE: CoreLogic *2012 through Feb
    30. 30. What Private Capital Investors Are Pursuing Today: Transparency! Credit Score Distribution of Latest Sequoia Mortgage Trust (SEMT) Fico Range # Loans WA FICO WA LTV % WA CLTV % % Total Balance 660-679 7 669 59 65 1.3 680-699 8 692 67 68 1.6 700-719 19 711 62 63 2.5 720-739 73 731 66 68 8.9 740-759 86 751 63 65 10.1 760-779 186 771 65 68 24.5 780-799 277 790 61 63 36.3 800-819 119 805 62 65 14.5 820-850 2 823 69 69 0.3 Grand Total 777 773 63 65 100Source: Sequoia Mortgage Trust 2013-2
    31. 31. Share of Underwater Mortgages Dropping as Prices Rise and Short Sales Close Negative Equity Share in CA Near Negative Equity Share in CA 40% 35% 30% 28.3% 25% 20% 15% 10% 4.5% 5% 0%SOURCE: CoreLogic
    32. 32. 29% of CA Mortgages are Underwater 15.6% over 125% LTV US CA 10% 9% 8% 7.3% 7.1% 7% 6% 5% 4% 3.6% 3.0% 2.6% 3% 2.3% 2.0% 2% 1.2% 1% 0% 125 to 149% 225%+ 110% to 114% 115% to 119% 100% to 104% 105% to 109% 120% to 124% 150% to 224% Loan-To-ValueSOURCE: CoreLogic
    33. 33. THE CALIFORNIA RESIDENTIAL REAL ESTATE MARKET
    34. 34. C.A.R. Membership Off 50,000+ From Peak 1970-2011 THOUSANDS Home Sales Membership 700,000 250,000 600,000 200,000 500,000 150,000 400,000 300,000 100,000 200,000 50,000 100,000 0 0 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
    35. 35. Dollar Volume of Sales Slowly Improving Up 16.5% in 2012, Up 7.0% in 2013 $ in Billion % Change $400 20% $ Volume of Sales Percent Change $350 15% $327 -54% 10% $300 $266 5% $250 0% $194 $200 $178 -5% $166 $154 $150 $150 $150 $142 -10% -15% $100 -20% $50 -25% $0 -30% 2005 2006 2007 2008 2009 2010 2011 2012p 2013fSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
    36. 36. Sales of Existing Detached Homes and Pacific West Consumer Confidence California, January 2013 Sales: 491,720 Units, Down 3.9% YTD, Down 3.9% YTY UNITS INDEX 700,000 Sales Consumer Confidence 140 600,000 120 500,000 100 400,000 80 300,000 60 200,000 40 100,000 20 0 0 SOURCE: California Association of REALTORS®; The Conference Board *Sales are seasonally adjusted and annualized
    37. 37. History of CA Housing Recovery in One Slide! Share of Equity, RE and Short Sales 2009 - 2012 70% Equity Sales Short Sale REO 63.6% 60% 50% 40% 30% 25.0% 20% 10% 10.9% 0%SOURCE: California Association of REALTORS®
    38. 38. Median Price of Existing Detached Homes California, January : $337,040, Up 24.1% YTY $700,000 P: May-07 $594,530 $600,000 $500,000 T: Feb-09 $400,000 $245,230 -59% from peak $300,000 $200,000 $100,000 $-SOURCE: California Association of REALTORS®
    39. 39. National Home Price Measures: Prices Have Hit Bottom and Are Rising Year Over Year % Increase Home Price Measure November October Core Logic Home Price Index 7.1% (f) 6.3% Zillow Home Value Index 5.2% 4.7% Radar Logic Home Price Index NA* 6.9% Existing-Homes, Median Sales Price 10.1% 11.1% New Homes, Median Sales Price 15.3% 5.7% Trulia Asking Price Index 3.8% 3.6% 3rd Quarter 2nd Quarter FHFA Quarterly House Price Index 4.0% 2.0% Case-Shiller Home Price Index 0.3% (f) 1.2% (f) – Forecast * Data available 1/24/13.SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
    40. 40. Trough vs. Current Price – January 2013 Trough Trough Jan-13 % Chg From Region Month Price Median Trough Monterey Region Mar-09 $241,025 $399,073 65.6% Palm Springs/Lower Desert Apr-09 $150,140 $228,930 52.5% Santa Clara Feb-09 $445,000 $652,500 46.6% San Francisco Bay Area Feb-09 $378,520 $548,890 45.0% Los Angeles May-09 $248,850 $349,720 40.5% Riverside/San Bernardino Apr-09 $150,860 $207,530 37.6% CALIFORNIA Feb-09 $245,230 $337,040 37.4% Orange County Jan-09 $442,170 $566,500 28.1% High Desert May-09 $106,210 $132,660 24.9% Sacramento Jan-12 $162,290 $201,010 23.9% Ventura Feb-09 $359,630 $440,670 22.5% San Luis Obispo Feb-11 $328,750 $398,980 21.4% San Diego Mar-09 $326,832 $390,890 19.6% Northern Wine Country Nov-11 $310,570 $367,672 18.4% Northern California Jan-12 $210,280 NA NASOURCE: California Association of REALTORS®
    41. 41. Unsold Inventory Index California, January 2013: 3.5 Months 18 16 14 12 10 8 6 4 2 0 Note: “Unsold Inventory Index” represents the number of months it would take to sell the remaining inventory for the month in question. The remaining inventory for the month is defined as the number of properties that were “Active”, “Pending”, and “Contingent” (when available) and divide the sum by the number of “Sold” properties for the month in question.SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
    42. 42. Unsold Inventory Index (Months) Price Range (Thousand) Jan-13 Dec-13 Jan-13 $1,000K+ 9.0 4.4 13.8 $750-1000K 5.0 2.9 8.8 $500-750K 3.4 2.3 7.0 $300-500K 3.1 2.3 5.9 $0-300K 3.0 2.4 5.0 Note: “Unsold Inventory Index” represents the number of months it would take to sell the remaining inventory for the month in question. The remaining inventory for the month is defined as the number of properties that were “Active”, “Pending”, and “Contingent” (when available) and divide the sum by the number of “Sold” properties for the month in question.SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
    43. 43. Tight Supply of Inventory, Especially for REO SalesUnsold Inventory California: December 2012Index (Months) 2.7 3 2.4 1.9 2 1 0 Equity Sales REO Sales Short SalesSOURCE: California Association of REALTORS®
    44. 44. Extremely Low Levels of Active Listings at the State LevelUnsold InventoryIndex (Months) 4 3 1.7 2 1.0 0.7 1 0 Equity Sales REO Sales Short SalesSOURCE: California Association of REALTORS®
    45. 45. Shadow Inventory
    46. 46. The CA Foreclosure Funnel:9.9 Million Homes7.4 Million Mortgages2.1 Million Underwater .com/CAR
    47. 47. 613,000/18,000 = 34 months of Inventory 435,000 Delinquent 117,000 in Foreclosure61,000 Bank Owned18,000 Distressed Sales .com/CAR
    48. 48. California Foreclosure Filings, Jan. 2013 NTS: 9356 , -64.6% YTD • NOD: 4,748, -76.4% YTD 70,000 Notice of Trustee Sale - Counts Notice of Defaults - Counts 60,000 6 Month Average: 50,000 NTSs: 15,142 40,000 NODs: 12,542 30,000 20,000 10,000 0SOURCE: ForeclosureRadar.com
    49. 49. California Foreclosure Outcomes, Jan. 2013 REO: -67.9% YTD • 3rd Party: -34.6% YTD • Cancel: +18.1% YTD 30,000 REOs Sold to 3rd Party Cancellations 6 Month Average: 25,000 REO: 4,544 3rd Party: 3,063 20,000 Cancelled: 14,007 15,000 10,000 5,000 0SOURCE: ForeclosureRadar.com
    50. 50. 901 Camino Del Rio South, 10 Mile Radius • Preforeclosure: 817 • Auction: 963 • Bank Owned: 248Source: ForeclosureRadar.com as of 02/19/13.
    51. 51. Lemon Grove • Preforeclosure: 28 • Auction: 36 • Bank Owned: 9Source: ForeclosureRadar.com as of 02/19/13.
    52. 52. Coronado • Preforeclosure: 6 • Auction: 9 • Bank Owned: 0Source: ForeclosureRadar.com as of 02/19/13.
    53. 53. San Diego • Preforeclosure: 848 • Auction: 1,014 • Bank Owned: 253Source: ForeclosureRadar.com as of 02/19/13.
    54. 54. REGIONAL/LOCALREAL ESTATE MARKETS
    55. 55. LEMON GROVE
    56. 56. Sales of Single Family Homes • Lemon Grove, January 2013: 19 Units • Up 72.7% MTM, Up 58.3% YTYSOURCE: Clarus Market Metrics
    57. 57. Median Price of Single Family Homes • Lemon Grove, January 2013: $290,000 • Up 22.6% MTM, Up 14.2% YTYSOURCE: Clarus Market Metrics
    58. 58. For Sale Properties • Lemon Grove, January 2013: 54 Units • Down 18.2% MTM, Down 48.1% YTY Note: “For Sale Properties” represents the overall supply that exist throughout the entire month, including any listings that appear as “Active” any point in time during the month.SOURCE: Clarus Market Metrics
    59. 59. Month’s Supply of Inventory • Lemon Grove, January 2013: 1.9 Months Note: “Month’s Supply of Inventory” represents the number of months it would take to sell the remaining inventory for the month in question. The remaining inventory for the month is defined as the number of properties that were “For Sale” on the last day of the month in question. The inventory figure is then divided by the number of properties that went Under Contract during the month.SOURCE: Clarus Market Metrics
    60. 60. CORONADO
    61. 61. Sales of Single Family Homes • Coronado, January 2013: 4 Units • Down 66.7% MTM, Down 75.0% YTYSOURCE: Clarus Market Metrics
    62. 62. Median Price of Single Family Homes • Coronado, January 2013: $1,337,500 • Down 3.6% MTM, Up 7.6% YTYSOURCE: Clarus Market Metrics
    63. 63. For Sale Properties • Coronado, January 2013: 110 Units • Down 2.7% MTM, Up 4.8% YTY Note: “For Sale Properties” represents the overall supply that exist throughout the entire month, including any listings that appear as “Active” any point in time during the month.SOURCE: Clarus Market Metrics
    64. 64. Month’s Supply of Inventory • Coronado, January 2013: 5.4 Months Note: “Month’s Supply of Inventory” represents the number of months it would take to sell the remaining inventory for the month in question. The remaining inventory for the month is defined as the number of properties that were “For Sale” on the last day of the month in question. The inventory figure is then divided by the number of properties that went Under Contract during the month.SOURCE: Clarus Market Metrics
    65. 65. SAN DIEGO
    66. 66. Sales of Single Family Homes • San Diego, January 2013: 464 Units • Down 30.4% MTM, Up 2.9% YTYSOURCE: Clarus Market Metrics
    67. 67. Median Price of Single Family Homes • San Diego, January 2013: $430,000 • Down 6.5% MTM, Up 16.2% YTYSOURCE: Clarus Market Metrics
    68. 68. For Sale Properties • San Diego, January 2013: 1,949 Units • Down 0.4% MTM, Down 39.5% YTY Note: “For Sale Properties” represents the overall supply that exist throughout the entire month, including any listings that appear as “Active” any point in time during the month.SOURCE: Clarus Market Metrics
    69. 69. Month’s Supply of Inventory • San Diego, January 2013: 1.5 Months Note: “Month’s Supply of Inventory” represents the number of months it would take to sell the remaining inventory for the month in question. The remaining inventory for the month is defined as the number of properties that were “For Sale” on the last day of the month in question. The inventory figure is then divided by the number of properties that went Under Contract during the month.SOURCE: Clarus Market Metrics
    70. 70. CALIFORNIA HOUSING MARKET FORECAST
    71. 71. Forecast Report Card 2011 Projected 2012 Forecasted 2012 September 2011 2011 Actual September 2011 ProjectedSFH Resales(000s) 491.1 497.9 496.2 523.3% Change -0.1% 1.1% 1.0% 5.1%Median Price($000s) $291.0 $286.0 $296.0 $317.0% Change -4.0% -6.2% 1.7% 10.9%Forecast Date: October 2012 vs. September 2011Source: CALIFORNIA ASSOCIATION OF REALTORS®
    72. 72. California Housing Market OutlookIndicator 2008 2009 2010 2011 2012p 2013fSFH Resales (000s) 441.81 546.86 492.29 497.86 523.25 530% Change 27.3% 23.8% -10.0% 1.1% 5.1% 1.3%Median Price($000s) $ 348.5 $ 275.0 $ 305.0 $ 286.0 $ 317.0 $ 335.0% Change -37.8% -21.1% 10.9% -6.2% 10.9% 5.7%30-Yr FRM 6.0% 5.1% 4.7% 4.5% 3.8% 4.0%1-Yr ARM 5.2% 4.7% 3.5% 3.0% 2.8% 2.8%
    73. 73. Recovery Will Continue in 2013, with Both Sales and the Median Price Up Sales of Existing Detached Homes Median Price Units Price(Thousand) (Thousand) 700 $600 600 523.3530.0 $500 500 $400 $335 400 $300 300 $317 $200 200 $100 100 0 $0 2005 2007 2009 2011 2013f 2005 2007 2009 2011 2013f SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
    74. 74. When will CA Start Building Again? 2012(p): 52,000 units, Up 10.4% from 2011 Single Family Multi-Family 250,000 Household Growth: 220,000-250,000/yr. 200,000 150,000 100,000 50,000 0 2005 2006 2007 2008 2009 2010 2011 2012PSOURCE: Construction Industry Research Board
    75. 75. CLOSING THOUGHTS
    76. 76. Presentation Take - Aways1. Worst of the recession is over but recovery will continue to be sluggish2. Tax and spend debate critical next 60 days3. Rates low until Unemployment rate reaches 6.5%4. Global Wild Cards: Euro Zone Crisis/ Recession, China & India, Trading Partners5. Biggest Policy Issues: Future of Fannie, Freddie & FHA
    77. 77. THANK YOU AND PLEASE STAY INFORMED!WWW.CAR.ORG/MARKETDATA SARAS@CAR.ORG

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