KCM Divided into
Three Sections
2014
PROJECTIONS
The Year of…
2012 - Recovery
2013 - Stabilization
2014 - Growth!
The ECONOMY
Calculated Risk 12/2013
Coincident indexes constructed from state employment
data. From the Federal Reserve Bank of Philadelphia:
“The coincident ...
2014
will be the year of the
repeat homebuyer
- Trulia
Impact of Immigration Reform
“Demand for housing units
increases as new immigrants enter
the economy and form households,
...
HOUSEHOLDS
in the U.S.*
2014-2017
*Urban Land Institute’s 2014
Emerging Trends
in Real Estate
121M
Current Households
in...
“Well, I think it’s a basic question of supply
and demand. When you have that many more
renters coming compared to any tim...
"We are in the midst of the worst
Affordability is still good compared to
rental affordabilityany time over the last 50 ye...
Homeowners Net Worth…
OVER 30X
greater
than renters
Federal Reserve
An American Family’s
Net Worth
$174,500
$5,100
Homeowner
Renter
Federal Reserve
5,500,000
Existing Home Sales
5,000,000
4,500,000
4,000,000
S&P Case Shiller 12/2013
Year-Over-Year % Change in House Sales
NORTHEAST
WEST
Up 6.6%
Down 10.1%
MIDWEST
Unchanged
NAR’s Existing Homes
Sales Re...
Pending Home Sales
100 = Historically Healthy Level
NAR 12/2013
Impact of Increasing
INTEREST
RATES
ta·per
ˈtāpər/
Verb – to diminish
or reduce
$151.08
“I think it is very likely that QE3 will be completed by
the end of 2014. There are 8 meetings during the
year, andisIstil...
2013
30 Year Fixed
Mortgage Rates
Federal Reserve 12/2013
Mortgage Rate
Projections
Analyst
Projected Rate
1Q 2015
National Assoc of Realtors
5.4%
Mortgage Bankers Assoc
5.3%
Calculated Risk 7/2013
Percent of the country remaining affordable
at different 30 year mortgage rates
70%
63%
55%
35%
4.4%
5%
6%
7%
Fredd...
Rate deemed
SIGNIFICANT
threat*
44.3%
8%
13.6%
13.3%
13.6%
4.5 - 5%
5 - 5.5%
5.5 - 6%
*on the 30-Year fixed rate m...
Buyer’s Purchasing Power
1,079
$
1,109
$
1,139
$
1,169
$
1,199
5.75 $
RATE
6.00 $
1,050
$
1,080
$
1,109
$...
Buyer’s Purchasing Power
2,158
$
2,218
$
2,278
$
2,338
$
2,398
5.75 $
RATE
6.00 $
2,100
$
2,160
$
2,218
$...
Buyer’s Purchasing Power
3,237
$
3,328
$
3,417
$
3,507
$
3,597
5.75 $
RATE
6.00 $
3,151
$
3,239
$
3,326
$...
Buyer’s Purchasing Power
4,317
$
4,437
$
4,557
$
4,676
$
4,796
5.75 $
RATE
6.00 $
4,201
$
4,318
$
4,435
$...
Buyer’s Purchasing Power
5,396
$
5,546
$
5,696
$
5,846
$
5,996
5.75 $
RATE
6.00 $
5,252
$
5,398
$
5,544
$...
Home
Prices
12/2013
Year-over-Year Change in Prices
S&P Case Shiller 12/2013
Month-Over-Month Price Changes
12/2013
Months Inventory of Homes for Sale
5.3
5.0
5-6 Months =
Normal Market Inventory
4.8
4.5
4.3
4.0
Jan
Feb
Mar
Apr
M...
Year-over-Year Inventory Levels
10%
5%
5%
1.8%
0.9%
Sept
1.8%
Oct
0.9%
0%
-5%
-5%
-7.6%
-6.2%
-10%
-14%
-15%
-1...
RETURN ON INVESTMENT
January 2000 – December 2013
65.9
51.5
32.5
6
Dow
MSN Money.com, Case Shiller
S&P
NASDAQ
Real E...
S&P Case-Shiller Home Price Indices
S&P Case Shiller 12/2013
Months Inventory of Homes for Sale
5-6 Months = Normal Market Inventory
NAR 12/2013
Percentage of Distressed Property Sales
35%
14%
NAR 12/2013
Nail Down the
TRUST
FACTOR
Jayson DeMers in Forbes
Content Marketing Will Be Bigger Than Ever
“One of the main ways that companies are
establishing ...
Jayson DeMers in Forbes
Image-Centric Content Will Rule
“As consumers are hit with an increasing number of
advertisements,...
60
of businesses use
some form of
content marketing
78
of Chief Marketing
Officers believe
custom content is the
future...
3X
Content
Marketing
as many leads per dollar
produced by content marketing
(versus paid search)
78%
70%
of consumers ...
Typical Sold Price*
FSBO vs. Agent
$230K
$184K
By FSBO
By AGENT
*The ‘typical’ price is actually the average price in ...
Buyer’s Purchasing Power
2,158
$
2,218
$
2,278
$
2,338
$
2,398
5.75 $
RATE
6.00 $
2,100
$
2,160
$
2,218
$...
5
Financial Reasons to Buy
Reason
Quote from Harvard Report
Housing is the one
leveraged investment
available
“Homeown...
Resources
Slide
Slide Title
6, 7
November 2013 State Coincident Indexes
8
2014 will be the year of the repeat homebuy...
Resources
Slide
Slide Title
Link
26
Dramatic Mortgage Rate Increases
27
Percent of the Country Affordability
http:/...
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Naea 01-14

Published on: Mar 3, 2016
Published in: Real Estate      Economy & Finance      Business      
Source: www.slideshare.net


Transcripts - Naea 01-14

  • 1. KCM Divided into Three Sections
  • 2. 2014 PROJECTIONS
  • 3. The Year of… 2012 - Recovery 2013 - Stabilization 2014 - Growth!
  • 4. The ECONOMY
  • 5. Calculated Risk 12/2013
  • 6. Coincident indexes constructed from state employment data. From the Federal Reserve Bank of Philadelphia: “The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic. The four state-level variables in each coincident index are nonfarm payroll employment, average hours worked in manufacturing, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average). The trend for each state’s index is set to the trend of its gross domestic product (GDP), so long-term growth in the state’s index matches long-term growth in its GDP.” Calculated Risk 12/2013
  • 7. 2014 will be the year of the repeat homebuyer - Trulia
  • 8. Impact of Immigration Reform “Demand for housing units increases as new immigrants enter the economy and form households, accelerating the current housing recovery and fueling growth in this sector of the economy.” $68B Projected annual increase in spending on residential construction Bipartisan Policy Center 12/2013
  • 9. HOUSEHOLDS in the U.S.* 2014-2017 *Urban Land Institute’s 2014 Emerging Trends in Real Estate 121M Current Households in the United States 3.7% 4.48M Projected Growth over the Next 3 Years Additional Households to be Formed
  • 10. “Well, I think it’s a basic question of supply and demand. When you have that many more renters coming compared to any time overlookingyears. into the market the last 50 for Affordability is still good housing, and the supply of housing isn’t responding as quickly as it might, that’s going to push rents up, even if incomes are low.” Christopher Herbert Research Director at the Joint Center
  • 11. "We are in the midst of the worst Affordability is still good compared to rental affordabilityany time over the last 50 years. crisis that this country has known." Shaun Donovan Secretary of Housing & Urban Development.
  • 12. Homeowners Net Worth… OVER 30X greater than renters Federal Reserve
  • 13. An American Family’s Net Worth $174,500 $5,100 Homeowner Renter Federal Reserve
  • 14. 5,500,000 Existing Home Sales 5,000,000 4,500,000 4,000,000 S&P Case Shiller 12/2013
  • 15. Year-Over-Year % Change in House Sales NORTHEAST WEST Up 6.6% Down 10.1% MIDWEST Unchanged NAR’s Existing Homes Sales Report 12.2013 SOUTH Up 1%
  • 16. Pending Home Sales 100 = Historically Healthy Level NAR 12/2013
  • 17. Impact of Increasing INTEREST RATES
  • 18. ta·per ˈtāpər/ Verb – to diminish or reduce
  • 19. $151.08
  • 20. “I think it is very likely that QE3 will be completed by the end of 2014. There are 8 meetings during the year, andisIstill good compared to any time over the last 50 years. Affordability expect the Fed to reduce the pace of asset purchases at about $10 billion per meeting. It appears they will only slow the taper if inflation declines sharply - or if the economy stalls (I think both are unlikely).” Bill McBride Calculated Risk
  • 21. 2013 30 Year Fixed Mortgage Rates Federal Reserve 12/2013
  • 22. Mortgage Rate Projections Analyst Projected Rate 1Q 2015 National Assoc of Realtors 5.4% Mortgage Bankers Assoc 5.3%
  • 23. Calculated Risk 7/2013
  • 24. Percent of the country remaining affordable at different 30 year mortgage rates 70% 63% 55% 35% 4.4% 5% 6% 7% Freddie Mac
  • 25. Rate deemed SIGNIFICANT threat* 44.3% 8% 13.6% 13.3% 13.6% 4.5 - 5% 5 - 5.5% 5.5 - 6% *on the 30-Year fixed rate mortgage 6 - 6.5% > 6.5% Pulsenomics
  • 26. Buyer’s Purchasing Power 1,079 $ 1,109 $ 1,139 $ 1,169 $ 1,199 5.75 $ RATE 6.00 $ 1,050 $ 1,080 $ 1,109 $ 1,138 $ 1,167 5.50 $ 1,022 $ 1,050 $ 1,079 $ 1,107 $ 1,136 5.25 $ 994 $ 1,022 $ 1,049 $ 1,077 $ 1,104 5.00 $ 966 $ 993 $ 1,020 $ 1,047 $ 1,074 4.75 $ 939 $ 965 $ 991 $ 1,017 $ 1,043 4.50 $ 912 $ 937 $ 963 $ 988 $ 1,013 $ 180,000 -10% $ 185,000 -7.5% $ 190,000 -5% $ 195,000 $ 200,000 -2.5% Principal and Interest Payments rounded to the nearest dollar amount.
  • 27. Buyer’s Purchasing Power 2,158 $ 2,218 $ 2,278 $ 2,338 $ 2,398 5.75 $ RATE 6.00 $ 2,100 $ 2,160 $ 2,218 $ 2,276 $ 2,334 5.50 $ 2,044 $ 2,100 $ 2,158 $ 2,214 $ 2,272 5.25 $ 1,988 $ 2,044 $ 2,098 $ 2,154 $ 2,208 5.00 $ 1,932 $ 1,986 $ 2,040 $ 2,094 $ 2,148 4.75 $ 1,878 $ 1,930 $ 1,982 $ 2,034 $ 2,086 4.50 $ 1,824 $ 1,874 $ 1,926 $ 1,976 $ 2,026 $ 360,000 -10% $ 370,000 -7.5% $ 380,000 -5% $ 390,000 $ 400,000 -2.5% Principal and Interest Payments rounded to the nearest dollar amount.
  • 28. Buyer’s Purchasing Power 3,237 $ 3,328 $ 3,417 $ 3,507 $ 3,597 5.75 $ RATE 6.00 $ 3,151 $ 3,239 $ 3,326 $ 3,414 $ 3,501 5.50 $ 3,066 $ 3,151 $ 3,236 $ 3,322 $ 3,407 5.25 $ 2,982 $ 3,065 $ 3,148 $ 3,230 $ 3,313 5.00 $ 2,899 $ 2,979 $ 3,060 $ 3,140 $ 3,221 4.75 $ 2,817 $ 2,895 $ 2,973 $ 3,052 $ 3,130 4.50 $ 2,736 $ 2,812 $ 2,888 $ 2,964 $ 3,040 $ 540,000 -10% $ 555,000 -7.5% $ 570,000 -5% $ 585,000 $ 600,000 -2.5% Principal and Interest Payments rounded to the nearest dollar amount.
  • 29. Buyer’s Purchasing Power 4,317 $ 4,437 $ 4,557 $ 4,676 $ 4,796 5.75 $ RATE 6.00 $ 4,201 $ 4,318 $ 4,435 $ 4,552 $ 4,669 5.50 $ 4,088 $ 4,202 $ 4,315 $ 4,429 $ 4,542 5.25 $ 3,976 $ 4,086 $ 4,197 $ 4,307 $ 4,418 5.00 $ 3,865 $ 3,972 $ 4,080 $ 4,187 $ 4,295 4.75 $ 3,756 $ 3,860 $ 3,965 $ 4,069 $ 4,173 4.50 $ 3,648 $ 3,749 $ 3,851 $ 3,952 $ 4,053 $ 720,000 -10% $ 740,000 -7.5% $ 760,000 -5% $ 780,000 $ 800,000 -2.5% Principal and Interest Payments rounded to the nearest dollar amount.
  • 30. Buyer’s Purchasing Power 5,396 $ 5,546 $ 5,696 $ 5,846 $ 5,996 5.75 $ RATE 6.00 $ 5,252 $ 5,398 $ 5,544 $ 5,690 $ 5,836 5.50 $ 5,110 $ 5,252 $ 5,394 $ 5,536 $ 5,678 5.25 $ 4,970 $ 5,108 $ 5,246 $ 5,384 $ 5,522 5.00 $ 4,831 $ 4,966 $ 5,100 $ 5,234 $ 5,368 4.75 $ 4,695 $ 4,825 $ 4,956 $ 5,086 $ 5,216 4.50 $ 4,560 $ 4,687 $ 4,814 $ 4,940 $ 5,067 $ 900,000 -10% $ 925,000 -7.5% $ 950,000 -5% $ 975,000 $ 1,000,000 -2.5% Principal and Interest Payments rounded to the nearest dollar amount.
  • 31. Home Prices
  • 32. 12/2013
  • 33. Year-over-Year Change in Prices S&P Case Shiller 12/2013
  • 34. Month-Over-Month Price Changes 12/2013
  • 35. Months Inventory of Homes for Sale 5.3 5.0 5-6 Months = Normal Market Inventory 4.8 4.5 4.3 4.0 Jan Feb Mar Apr May Jun Jul August Sept Oct Nov NAR 12/2013
  • 36. Year-over-Year Inventory Levels 10% 5% 5% 1.8% 0.9% Sept 1.8% Oct 0.9% 0% -5% -5% -7.6% -6.2% -10% -14% -15% -13% -16.8% -20.8% -20% -24% -25% Jan Feb March April % -24% -20.8% -16.8% -14% May -13% June -7.6% July -5% Aug -6.2% Nov 5.0% NAR 12/2013
  • 37. RETURN ON INVESTMENT January 2000 – December 2013 65.9 51.5 32.5 6 Dow MSN Money.com, Case Shiller S&P NASDAQ Real Estate
  • 38. S&P Case-Shiller Home Price Indices S&P Case Shiller 12/2013
  • 39. Months Inventory of Homes for Sale 5-6 Months = Normal Market Inventory NAR 12/2013
  • 40. Percentage of Distressed Property Sales 35% 14% NAR 12/2013
  • 41. Nail Down the TRUST FACTOR
  • 42. Jayson DeMers in Forbes Content Marketing Will Be Bigger Than Ever “One of the main ways that companies are establishing authority and gaining trust with consumers is by consistently creating valuable content through a variety of channels. This typically involves relevant industry information that provides insight to an audience. Doing so allows a company to steadily build rapport with its demographic and develop a loyal following.”
  • 43. Jayson DeMers in Forbes Image-Centric Content Will Rule “As consumers are hit with an increasing number of advertisements, it’s becoming more important to make content easily and quickly digestible. If you look at the social media sites that are on the rise, three of the four have a common characteristic… they place an emphasis on images ” .
  • 44. 60 of businesses use some form of content marketing 78 of Chief Marketing Officers believe custom content is the future of marketing % % Placester
  • 45. 3X Content Marketing as many leads per dollar produced by content marketing (versus paid search) 78% 70% of consumers prefer getting to know a company via articles rather than ads of consumers believe that organizations providing custom content are interested in building good relationships with them Marketing Tech Blog
  • 46. Typical Sold Price* FSBO vs. Agent $230K $184K By FSBO By AGENT *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.
  • 47. Buyer’s Purchasing Power 2,158 $ 2,218 $ 2,278 $ 2,338 $ 2,398 5.75 $ RATE 6.00 $ 2,100 $ 2,160 $ 2,218 $ 2,276 $ 2,334 5.50 $ 2,044 $ 2,100 $ 2,158 $ 2,214 $ 2,272 5.25 $ 1,988 $ 2,044 $ 2,098 $ 2,154 $ 2,208 5.00 $ 1,932 $ 1,986 $ 2,040 $ 2,094 $ 2,148 4.75 $ 1,878 $ 1,930 $ 1,982 $ 2,034 $ 2,086 4.50 $ 1,824 $ 1,874 $ 1,926 $ 1,976 $ 2,026 $ 360,000 -10% $ 370,000 -7.5% $ 380,000 -5% $ 390,000 $ 400,000 -2.5% Principal and Interest Payments rounded to the nearest dollar amount.
  • 48. 5 Financial Reasons to Buy Reason Quote from Harvard Report Housing is the one leveraged investment available “Homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor.” You're paying for housing whether you own or rent “Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.” Owning is usually a form of “forced savings” “Having to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings.” There are substantial tax benefits to owning “Homeowners are able to deduct mortgage interest and property taxes from income.” Owning is a hedge against inflation “Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.” Joint Center for Housing Studies, Harvard University12/2013
  • 49. Resources Slide Slide Title 6, 7 November 2013 State Coincident Indexes 8 2014 will be the year of the repeat homebuyer http://info.trulia.com/2014-housing-predictions 9 Impact of Immigration Reform http://bipartisanpolicy.org/library/report/immigration-reform-implications-growth-budgets-and-housing 11 Households in the U.S. 2014-2017 http://www.uli.org/wp-content/uploads/ULI-Documents/Emerging-Trends-in-Real-Estate-Americas-2014.pdf 12 Christopher Herbert Quote http://onpoint.wbur.org/2013/12/16/chris-herbert-explains-why-rents-are-headed-skyward 13 Shaun Donovan Quote http://www.cnbc.com/id/101258649 14, 15 An American Family’s Net Worth http://www.federalreserve.gov/pubs/bulletin/2012/pdf/scf12.pdf 17, 19, 41, 42, 45, 46 Existing Home Sales, Pending Home Sales, Months Inventory, Year-Over-Year Inventory, Months Inventory of Homes, Distressed Property www.realtor.org/ 18 Year Over Year % Change 23 Bill McBride Quote 24 2013 30 Year Fixed Mortgage Rates http://www.freddiemac.com/pmms 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-2013-6- 25 Link http://www.calculatedriskblog.com/2013/12/philly-fed-state-coincident-indexes.html?utm_source=feedburner&utm_medium= http://www.realtor.org/news-releases/2013/12/existing-home-sales-decline-in-november-but-strong- http://www.calculatedriskblog.com/2013/11/will-fed-taper-in-december-inflation-is.html?utm_source http://www.fanniemae.com/resources/file/research/emma/pdf/Housing_Forecast_061313.pdf
  • 50. Resources Slide Slide Title Link 26 Dramatic Mortgage Rate Increases 27 Percent of the Country Affordability http://freddiemac.mwnewsroom.com/press-releases/diverging-homebuyer-affordability-otcqb-fmcc-1077388 35 CNN Money & LA Times http://money.cnn.com/2013/12/31/news/economy/home-prices-jump/index.html?hpt=hp_t3 http://www.latimes.com/business/money/la-fi-mo-case-shiller-home-prices-20131231,0,1684377.story#axzz2pkbDZg00 36 Today’s Prices Compared to 2005-07 Peak http://www.corelogic.com/research/hpi/corelogic_hpi_october_2013.pdf 37 Year-Over-Year Change in Prices http://www.housingviews.com/wp-content/uploads/2013/11/CSHomePrice_Release_Sept-Results.pdf 38 Month-Over-Month Price Changes 39 State Median Price Expectation http://www.realtor.org/reports/realtors-confidence-index 43 Return on Investment http://www.spindices.com/index-family/real-estate/sp-case-shiller 44 S&P Case-Shiller Home Price Indices https://www.spice-indices.com/idpfiles/spice-assets/resources/public/documents/19529_cshomepricerelease-0730.pdf?force_download=true 49, 50 Jayson DeMers in Forbes http://www.forbes.com/sites/jaysondemers/2013/09/17/the-top-7-online-marketing-trends-that-willdominate-2014/ 51 Placester Data https://placester.com/real-estate-marketing-academy/infographic-real-estate-professionals-guideonline-marketing-in-2014/2014-online-marketing-guide-for-real-estate-infographic-full-4/ 52 Marketing Tech Blog http://www.marketingtechblog.com/infographic-content-marketing-real-estate/ 53 FSBO vs. Agent http://economistsoutlook.blogs.realtor.org/2013/12/04/2013hbs-twitter-chat-recap/#more-14199 55 5 Financial Reasons to Buy http://www.jchs.harvard.edu/research/publications/dream-lives-future-homeownership-america http://www.calculatedriskblog.com/2013/07/house-prices-and-mortgage-rates.html?utm_source=feedburner&utm_medium=e http://www.corelogic.com/about-us/researchtrends/home-price-index-report.aspx?WT.mc_id=crlg_131203_UE1

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