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1. Micro & Macro Trends
Prices
Drop
Prices
Drop

2. realtor.com
• Total home sales are up 5% compared
with the first half of 2015.
• Median existing home prices
are up 5%, setting a new record.
• Overall, we had the best
spring in a decade.
• Robust appreciation has restored home
equity for many homeowners encouraging
them to consider selling and buying again.
The Real Estate Market in the 1st Half of 2016

4. With prices still increasing, is another
housing bubble starting to form?

5. “While today many other asset classes
remain turbulent, real estate prices have
been an oasis of stability, and they are
expected to remain stable in the short term
due to very tight inventory of unsold homes and
rising purchase demand. This is important because
volatility is generally an indicator of risk. Just like
the 1990s, a stable home price environment is a
very good sign for the housing market and will help
anchor the economy if it encounters rough patches
in the future.”
CoreLogic

6. Supply & Demand-Alameda/ContraCosta
Supply
Supply Demand
Demand
Prices Drop
Prices Rise

7. Supply & Demand- Santa Clara County
Prices Drop
Demand
Supply
Demand
Supply
Prices Rise

15. Home Price
A nationwide panel of
over one hundred
economists, real estate
experts and investment
& market strategists.

17. PROJECTED
Mean Percentage Appreciation
Home Price Expectation Survey 2016 2Q

18. Is there a challenge with affordability
in the current real estate market?

19. “The Housing Affordability Index measures whether or
not a typical family earns enough income to qualify for
a mortgage loan on a typical home at the national level
based on the most recent price and income data.”
Basically a value of 100 means a family
earning the median income earns enough
to qualify for a mortgage on a median
priced home at the time. Anything
above 100 means the family has
more than enough to qualify.
The higher the score the easier it is.”
NAR
Housing Affordability Index

20. Housing Affordability Index
NAR
2009 to Today

21. - Peter Muoio
Ten-X Chief Economist
“More jobs are being added
while unemployment
continues to drop and low
mortgage rates are enticing
homebuyers, so solid demand should
continue to fuel the housing market.”

22. Consumer Confidence Index
120
100
80
60
40
20
0
SOURCE: TheConferenceBoard
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
Jul-16
July 2016: 97.3
INDEX,100=1985
SERIES:ConsumerConfidence

23. Unemployment rate by California Metro Area
0.0%
SOURCE: CA Employment DevelopmentDivision
2.0% 4.0% 6.0% 8.0% 10.0% 12.0%
Bakersfield 10.8%
FresnoMSA 9.4%
Modesto 9.2%
Stockton MSA 8.3%
Inland Empire 6.6%
ElDorado/Sacramento/Placer/Yolo 5.6%
Ventura 5.4%
Los Angeles 5.2%
San Diego 5.1%
Oakland 4.8%
Orange County 4.4%SERIES: Unemploymentrate
June 2016:California 5.4%

24. CA housing market recovery in one chart
0%
10%
80%
70%
60%
50%
40%
30%
20%
90%
100%
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Equity Sales Short Sale REO
SOURCE: CALIFORNIAASSOCIATION OFREALTORS®
SERIES: Distressed Sales, Not SeasonallyAdjusted
93.7%
3.3%
2.7%

25. - Lawrence Yun
NAR’s Chief Economist
“The modest bump in June
sales to first-time buyers
can be attributed to mortgage
rates near all-time lows and
perhaps a hopeful indication that
more affordable, lower-priced
homes are beginning to make their
way onto the market.”

26. “More jobs are being added
while unemployment
continues to drop and low
mortgage rates are enticing
homebuyers, so solid demand should
continue to fuel the housing market.”
- Peter Muoio
Ten-X Chief Economist

27. Whether You Rent or Buy, You’re Paying
a Mortgage
“Households must consume housing whether they own or rent. Not even
accounting for more favorable tax treatment of owning, homeowners pay
debt service to pay down their own principal while households that rent
pay down the principal of a landlord plus a rate of return.
That’s yet another reason owning often does—as Americans intuit—end up
making more financial sense than renting.”

28. "Houses are tangible.
You can physically see and
feel the product. So you know
where your money is going: It's
going into that house.”
- Sterling White
Co-Founder of Holdfolio

29. Home Buyer
Pulse
77%
cited mortgage rates as the
most important factor when
purchasing a home
35%
of Millennials are
putting less than a 20%
down payment
63%
will buy a home in the
next 2 years with
21% currently looking
Respondents are not currently homeowners and are
considering purchasing a home in the next 5 years.

30. America’s Choice of Best
Long Term Investment
- Gallup Poll

31. INTEREST
RATES

32. Freddie Mac 8/2016
30 Year Fixed
Rate Mortgages
from Freddie Mac

33. Quarter
Fannie
Mae
Freddie
Mac MBA NAR
Average
of All Four
2016 4Q 3.5 3.6 3.8 3.7
3.65
2017 1Q 3.5 3.8 4.0 3.8
3.76
2017 2Q 3.5 3.9 4.1 4.0
3.88
2017 3Q 3.6 4.1 4.3 4.2
4.05
Mortgage Rate Projections
8/2016

34. 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4
Rate 3.7 3.8 4 3.9 3.7 3.6 3.6 3.6 3.8 3.9 4.1 4.2
Mortgage Rates
Freddie Mac
Freddie Mac
30 Year Fixed Rate
- Actual
- Projected
2015
2016
2017

35. Year-Over-Year
Increase in Rent
Top 15 Markets
Zillow

36. “Momentum is likely to carry
us through the remainder of
the year so we will end up with
the best year in home sales in a
decade. This is despite having
limited inventory and rapidly rising
house prices in many markets.”
Freddie Mac