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The Future Trends of Real Estate Lynchburg VA October 19, 2011

The Future Trends of Real Estate Lynchburg VA October 19, 2011. Free Downloadable Information. My Goal is to Inspire and Educate 10 Million People by January 1, 2015. Join us tomorrow for Ninja Selling! 8:30am. Invest in your future. 3 Keys to Success . Your Mindset Your Skill-set

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The Future Trends of Real Estate Lynchburg VA October 19, 2011

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  1. The Future Trends of Real EstateLynchburg VAOctober 19, 2011

  2. Free Downloadable Information

  3. My Goal is to Inspire and Educate 10 Million People by January 1, 2015

  4. Join us tomorrow for Ninja Selling!8:30am

  5. Invest in your future.

  6. 3 Keys to Success • Your Mindset • Your Skill-set • Your Actions

  7. Housing Market and Economic Outlook Lawrence Yun, Ph.D. Chief Economist NATIONAL ASSOCIATION OF REALTORS® Greenbrier Resort, WV September 11, 2011

  8. U.S. Annual Existing Home Sales

  9. Monthly Existing Home Sales Tax Credit Impact

  10. State and Local Government Jobs(600,000 job cuts over 3 years)

  11. Federal Government Jobs(110,000 job gains over 3 years)

  12. No interest Rate Hike till 2013!

  13. CPI Inflation Rising(% change from one year ago) • Social Security COLA forecast to rise 3.5% in 2011 • Workers Wage to rise by 1.7% in 2011

  14. U.S. Housing Starts Housing Starts in thousands

  15. Newly Built Home Inventory(40 year lows) In thousands

  16. Improving Factors for Higher Home Sales • Job Creation (though slowly) • Stock market recovery from 2008 • Rising rents and large pool of qualified renters • Buyers want distressed properties … at deep discounts • International buyers cashing in on the weakened dollar • Smart money chasing real estate

  17. Financial Asset at $45 trillion … Good Recovery from 2008 Source: Federal Reserve

  18. Housing Equity Down (funds for small business owners) Source: Federal Reserve

  19. CPI Apartment Rent

  20. Home Price vs Rent(index = 100 in 1980)

  21. Serious Delinquent Mortgages … Mostly Borrowers prior to 2009(90+ days late or in foreclosure process) In 2010, there were 1.5 million distressed sales … need to wait 2.7 years

  22. Distress Sales: 30% to 40% of Transactions Will Remain Significant for Next 2 years

  23. Very Low Default among Recent HomebuyersFannie and Freddie Backed Mortgage Loan Performance Source: Federal Housing Finance Agency

  24. Smart Money Buying Real Estate • 2011 - 35% of all sales CASH! • Investors want quick deals • Investors cannot get mortgage • Some do not want to bother with appraisals • Financial asset recovery helping with cash

  25. Smart Money Buying Real Estate • Hedge against future inflation • Hedge against future housing shortage? • Empty nesters downsizing and using leftover cash for kids’ home • Upper-end market beginning to move

  26. Real Estate as Inflation Hedge?(single-family home price in blue vs CPI in red) Good inflation hedge in the past

  27. Broad Inflationary Pressure

  28. Consumer Confidence Index(Predicts Presidential Election Outcomes)

  29. Average Credit Score for Loan Origination 15% to 20% Higher Sales

  30. Real Estate Baseline Outlook • GDP 1.5% to 2.5% next 2 years • 1.0 - 1.5 million annual job additions • Mortgage Rates rising 4.7% 2011 • 5.5% in 2012 • Not that important compared to underwriting standards

  31. Real Estate Baseline Outlook • Home sales slight increases next two years • Home values – steady and slow growth 2 years • critical source of small business start-up funds • Commercial vacancy rates falling

  32. www.FHFA.gov

  33. Lynchburg VA Appreciation

  34. 2011 Actual DepreciationLynchburg VA 4.1%

  35. Average 10 Year Appreciation for Lynchburg VA is 4.3% per year

  36. Lynchburg VA homes have appreciated 43% over the last 10 Years!

  37. www.PMI-US.com/ECON

  38. Economic Real Estate Trends over the next 24 Months • Affordability index 100 = 1995 Affordability Level • Appreciation Index • Appreciation projected for next 24 Months

  39. 99.9% Chance of Depreciation!Less than .1% Chance of Appreciation!

  40. Score of 100 = 1995 Housing Affordability

  41. <1% Chance of Depreciation! 99% Chance of Appreciation!

  42. Score of 100 = 1995 Housing Affordability

  43. 2010 Market Risk IndexLynchburg VA • 42.3% Chance of Depreciation • 57.7% Chance of Appreciation!

  44. 2011 Market Risk IndexLynchburg VA • 27.4% Chance of Depreciation • 72.6% Chance of Appreciation!

  45. 2010 - 2nd Quarter Lynchburg VAPMI U.S. Market Risk Index • Affordability Index = 143 • (100 = 1995 Affordability)

  46. 2011 - 2nd QuarterLynchburg VAPMI U.S. Market Risk Index • Affordability Index = 169.7 • (100 = 1995 Affordability)

  47. Lynchburg 11 Year Sales

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