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U.S. HOME SALES

U.S. HOME SALES. 5.2 million. 4.9 million. 2008 2009. U.S. HOME INVENTORY. 10 months. 8.3 months. 2008 2009. U.S. HOME MEDIAN PRICE. $198,100. $173,500. 2008 2009. 1 ST TIME HOMEBUYER MARKET. 47%. 41%. 2008 2009. LOCAL HOME SALES. 76,697. 67,963. 2008 2009.

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U.S. HOME SALES

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  1. U.S. HOME SALES 5.2 million 4.9 million 2008 2009

  2. U.S. HOME INVENTORY 10 months 8.3 months 2008 2009

  3. U.S. HOME MEDIAN PRICE $198,100 $173,500 2008 2009

  4. 1ST TIME HOMEBUYER MARKET 47% 41% 2008 2009

  5. LOCAL HOME SALES 76,697 67,963 2008 2009

  6. LOCAL HOME MEDIAN PRICE 145,000 144,590 2008 2009

  7. LOCAL HOME INVENTORY 6 months 5.6 months 2008 2009

  8. LUXURY MARKET 38% 2008 2009

  9. LUXURY MARKET • Jumbo financing harder to obtain. • Higher down payments required • Highest credit borrowers • Slower sales of their existing houses • Slowdown in top executive transferees • Drop in household wealth

  10. NEW HOME STARTS 50,000 13,499 2006 2009

  11. 2009 HOME AFFORDABILITY 5.0% 4.7% 2009 Fed Rates

  12. 2009 HOME AFFORDABILITY $64,000 Median Income Affords 70.1% of Homes Typical American Family

  13. 2009 HOME AFFORDABILITY • New HUD Guidelines • 3.5% down for 580 credit score • MIP up to 2.25 % from 1.75% • Seller concessions down to 3% from 6%

  14. FORECLOSURES “An estimated 2.4 million foreclosed homes will be added to the existing glut in 2010, driving prices down by another 10 percent or so.” N.Y. Times “A record 3 million homes will be seized this year.” Realty Trac

  15. FORECLOSURES 61,000 All Time High 2009 Foreclosure Filings

  16. FORECLOSURES +32% +27% +24% C O L L I N T A R R A N T +17% D E N T O N D A L L A S 2009 Foreclosure Filings

  17. FORECLOSURES • Loan Modification (HAMP) • 116,000 homeowners (12%) have successfully used HAMP • Three of the largest banks in the U.S. processed under 11% of borrowers Similar to most banks in U.S. • System can prevent only fraction of the 8-13 million foreclosures over next 4 years

  18. FORECLOSURES • Short Sales • 12% of all mortgage holders not current • 23% owe more than properties are worth

  19. NEW HOME SALES • Forecast • Will climb from 391,000 to 483,000 in 2010 • Demand for more than 20,000 new homes next year in this market • Housing starts will increase to 16,000-18,000 in 2010

  20. EXISTING HOME SALES • Forecast • Steady increase through the first half of 2010 • Increase will result from the government sponsored tax credit programs • Second half of 2010 will rely on employment and stable interest rates

  21. HOME AFFORDABILITY • Interest Rate Forecast • Federal Reserve is currently buying virtually every mortgage originated in the country • Buying spree is keeping mortgage rates about 0.5% to 1% lower than normal • 30 year fixed rate mortgages will rise over the next eight quarters from an average of 4.9% to approximately 5.5% in 2010 and 6% in 2011

  22. FORECLOSURES + 18% Jan. Feb. March

  23. FORECLOSURES • Forecast • Junk loans will be coming due for reset or for required refinance • $134 billion of these loans will recast in these next two years • 94% of these loans have a higher balance then they did at origination

  24. FORECLOSURES • Forecast – Shadow Inventory? • Flood of foreclosure postings during a relatively short time span • Do we have an accurate picture of the distressed home loans • Extend and pretend practices

  25. FORECLOSURES • Forecast – Short Sales Solutions • HAFA - streamline processing procedures • Mandate specific response timelines • Preapproved short sale terms REQUIRED

  26. REAL ESTATE TRENDS • American homeownership rate fell to 67.8% - lowest since early 2000 • Texas remained about 4 points lower than the national average • Ranks 45 out of the 50 states in homeownership

  27. REAL ESTATE TRENDS • Boomers • Less predictable • Retire later • Healthier • Most want to stay put

  28. REAL ESTATE TRENDS • Younger Boomers • Flatter incomes • Smaller home equities • Will feel recession longer

  29. REAL ESTATE TRENDS • Generation Y • Slow to purchase • Starter homes • Modest prices • Smaller lots • Looking for Green features

  30. REAL ESTATE TRENDS • Hispanic Buyers • Plan to buy in 5 years • Creates wave of buyers • $600 billion in home sales

  31. REAL ESTATE TRENDS • Workforce housing • Not being addressed • Supply cannot meet demand of the population • Must live further out • Contributes to traffic gridlock

  32. REAL ESTATE TRENDS • Workforce housing • Mixed use development not a solution • Priced at $300,000 and up

  33. REAL ESTATE TRENDS • Housing • Extremely optimistic • Still feeling effects of recession • Strong business cycle • Success for the real estate industry

  34. Thank You for Your Time

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