November Market Report

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November Market Report

  1. 1. KCM Divided into Three Sections
  2. 2. Existing Home Sales S&P Case Shiller 10/2013
  3. 3. Pending Home Sales 100 = Historically Healthy Level NAR 10/2013
  4. 4. “The emerging slowdown in home purchases appears to be largely seasonal.” Thomas Popik Research Director for the HousingPulse survey
  5. 5. Months Supply & Impact on Price Months Market Pricing 1–5 Sellers Appreciation 5–6 Even The Norm 6+ Buyers Depreciation
  6. 6. Months Inventory of Homes for Sale 5-6 Months = Normal Market Inventory NAR 10/2013
  7. 7. Year-over-Year Inventory Levels NAR 10/2013
  8. 8. Year-over-Year Change in Prices S&P Case Shiller 10/2013
  9. 9. Month-Over-Month Price Changes Realtor.com’s 0.0% Median List Price Zillow’s Sales Price -0.2%
  10. 10. “Asking home prices give us the first look at where home sale prices are headed, and they point to a Affordability is still rising rapidly in the first half of 2013, slowdown. Aftergood compared to any time over the last 50 years. asking prices in two thirds of the largest metros are cooling. In fact, asking prices are falling – not just rising more slowly – in 11 of the 100 largest metros, the most markets to see prices slip in six months.” Jed Kolko Trulia’s Chief Economist
  11. 11. “The rapid price gains of the last year cannot be sustained and we expect the last 50 to Affordability is still good compared to any time over thepaceyears. decline substantially…A slower pace is a positive for housing demand and will help to keep affordability from further eroding.” Moody’s Analytics
  12. 12. “If home values continued to rise as they have, relatively unchecked, we would almost certainly be headed into another bubble cycle, and nobody wants that…This moderation 50 years. Affordability is still good compared to any time over the last should help consumers feel more at ease in their decisions to buy and sell, and will help keep the market balanced.” Stan Humphries Chief Economist for Zillow
  13. 13. "I define a bubble as a time when people have extravagant expectations, and the expectations are driving home price increases. We don't Affordability is mindset of earlier this century… have the still good compared to any time over the last 50 years. Affordability is still good compared to any time over the last 50 years." Robert Shiller Nobel Prize Winning Economist
  14. 14. Recent Rate Movement 2013 30 Year Fixed Rate Freddie Mac 10/2013
  15. 15. ta·per ˈtāpər/ Verb – to diminish or reduce
  16. 16. Rate Movement 30 Year Fixed Rate Fed announces not to taper bond purchases t tes emen a e r unc ag rtg anno o n m Fed i se p to ea ncr ding u I l bui Decrease in mortgage rates since Fed announcement Freddie Mac 10/2013
  17. 17. “The MBA believes rates will keep pushing upward, going… well above 5%.” HousingWire 10/2013
  18. 18. Mortgage Rate Projections Analyst Projected Rate 4Q 2014 Fannie Mae 5.0% 5.4% 5.1% 5.0% National Assoc of Realtors Freddie Mac Mortgage Bankers Assoc
  19. 19. RETURN ON INVESTMENT January 2000 – November 2013 MSN Money.com, Case Shiller
  20. 20. Home Price Expectation Survey A nationwide panel of over one hundred economists, real estate experts and investment & market strategists.
  21. 21. Average Annual Appreciation Home Price Expectation Survey 2013 4Q
  22. 22. Home Price Expectation Survey Projected Percentage Increase Home Price Expectation Survey 2013 4Q
  23. 23. Cumulative Appreciation by 2018 Home Price Expectation Survey 2013 4Q
  24. 24. 30 Year Fixed Rate Mortgage History January 2012 – November 2013 Federal Reserve 11/2013
  25. 25. S&P Case-Shiller Home Price Indices S&P Case Shiller 10/2013
  26. 26. Months Inventory of Homes for Sale 5-6 Months = Normal Market Inventory NAR 10/2013
  27. 27. Percentage of Distressed Property Sales 35% 14% NAR 10/2013
  28. 28. Typical Sold Price* FSBO vs. Agent $215K $175K By FSBO *The ‘typical’ price is actually the average price in the survey. However, studies have shown that people are more likely to FSBO in markets with lower price points. By AGENT
  29. 29. 89 % Where Do Buyers Find a Home? 90 % of all buyers search online during home buying process of all buyers purchased a home through an agent % 28 of all buyers look to print newspaper ads
  30. 30. FSBOs as a Percentage of all Home Sales The percentage of homes selling as a FSBO has decreased from 19% to 9% in the last 20 years
  31. 31. FSBOs Must Be Ready to Negotiate Here is a list of some of the people with whom you must be prepared to negotiate: • The buyer • The buyer’s agent • The buyer’s attorney • The home inspection company • The termite company • The buyer’s lender • The appraiser • The title company • The town or municipality • The buyer’s buyer • Your bank (in the case of a short sale)
  32. 32. 7.9% 5.1% 3.6% Pre-BUBBLE Average Annual APPRECIATION BUBBLE RECOVERY TO DATE 4.2% PROJECTED NOW to 2018 BUST -5.9% Home Price Expectation Survey 2013 4Q
  33. 33. PROJECTED Percentage Appreciation Home Price Expectation Survey 2013 4Q
  34. 34. Cumulative House Appreciation by 2018 40.1% 28% 23.7% 16.8% Pre-Bubble Trend Bulls All Projections Bears Home Price Expectation Survey 2013 4Q
  35. 35. Mortgage Rate Projections Analyst Projected Rate 4Q 2014 Fannie Mae 5.0% 5.4% 5.1% 5.0% National Assoc of Realtors Freddie Mac Mortgage Bankers Assoc
  36. 36. Resources Slide Slide Title Link 4 Existing Home Sales http://www.spindices.com/index-family/real-estate/sp-case-shiller 5 Pending Home Sales http://www.realtor.org/ 6 Thomas Popik Quote 8, 9 Months Inventory of Homes for Sale, Year-over-Year Inventory Levels http://www.realtor.org/ 10 Year-over-Year Change in Prices http://www.spindices.com/index-family/real-estate/sp-case-shiller 11 Month-Over-Month Price Changes http://www.realtor.com/data-portal/Real-Estate-Statistics.aspx http://zillow.mediaroom.com/index.php?s=159&item=390 12 Jed Kolko Quote http://info.trulia.com/trulia-price-and-rent-monitors-sept-2013 13, 14 Moody’s Analytics Quote, Stan Humphries Quote http://www.dsnews.com/articles/moodys-predicts-strong-market-despite-slowdown-2013-09-27 15 Robert Shiller Quote http://www.cnbc.com/id/101152271 16, 18 Recent Rate Movement, Rate Movement http://www.freddiemac.com/pmms 19 Mortgage Bankers Association Quote http://www.housingwire.com/articles/27697-mba-economists-predict-mortgage-market-taper 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-2013 20, 39 http://www.dsnews.com/articles/housing-market-performs-well-despite-rising-interest-rates-2013-10-24 http://www.fanniemae.com/resources/file/research/emma/pdf/Housing_Forecast_061313.pdf KEEPINGCURRENTMATTERS.COM
  37. 37. Resources Slide Slide Title Link 22 Return on Investment http://www.spindices.com/index-family/real-estate/sp-case-shiller 23, 24, 25, 26 Home Price Expectation Survey, Average Annual Appreciation, Cumulative Appreciation by 2017 https://www.pulsenomics.com/Q4_2013_HPE_Survey.php 27 30 Year Fixed Rate Mortgage History http://www.freddiemac.com/pmms 28 S&P Case-Shiller Home Price Indices 29, 30 Months Inventory of Homes for Sale, Percentage of Distressed Property Sales http://www.realtor.org/ 32 Typical Sold Price http://economistsoutlook.blogs.realtor.org/2013/11/01/how-seller-sold-home-1991-2012/ 33 Where Do Buyers Find a Home? http://www.realtor.org/ 34 FSBOs as a Percentage of Home Sales http://economistsoutlook.blogs.realtor.org/2013/11/01/how-seller-sold-home-1991-2012/ 36-38 Average Annual Appreciation, Projected Percentage Appreciation, Cumulative House Appreciation by 2017 https://www.pulsenomics.com/Q4_2013_HPE_Survey.php https://www.spice-indices.com/idpfiles/spice-assets/resources/public/documents/19529_cshomeprice-releas KEEPINGCURRENTMATTERS.COM

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