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The Housing Market: Is Hope Around the Corner?

The Housing Market: Is Hope Around the Corner? The U.S. Perspective 2005: Housing construction’s all-time record… Source: U.S. Department of Commerce …driven by home builders, now correcting sharply Source: U.S. Department of Commerce Subprime/Alt-A loans fueled the boom

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The Housing Market: Is Hope Around the Corner?

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  1. The Housing Market: Is Hope Around the Corner?

  2. The U.S. Perspective

  3. 2005: Housing construction’s all-time record… Source: U.S. Department of Commerce

  4. …driven by home builders, now correcting sharply Source: U.S. Department of Commerce

  5. Subprime/Alt-A loans fueled the boom Source: Inside Mortgage Finance

  6. U.S. housing market overbuilt since early 2007 Source: Witten Advisors

  7. Home values plummeting; back to 2003 prices… Source: Calculated from OFHEO home price series 1976-1987; Case-Schiller national home price series1988+

  8. …with slower declines through 2010 Source: Calculated from OFHEO home price series 1976-1987; Case-Schiller national home price series1988+; forecast by Witten Advisors

  9. Fed actions have cut mortgage rates, so… Source: Federal Housing Finance Board

  10. …the decline in house payment is unprecedented…

  11. …and will bring extraordinary affordability Source: Witten Advisors

  12. The DFW Perspective

  13. DFW home prices have been much more stable Source: Calculated from Case-Schiller home price series; forecast by Witten Advisors

  14. DFW housing starts boomed in mid-2000s too Source: U.S. Department of Commerce

  15. Employment Growth 12 Months ending March 2009 Austin +3.3k San Antonio -1.5k Fort Worth -3.4k Norfolk -6.8k Kansas City -11.6k Atlanta -115.9k Detroit -135.3k Phoenix -136.0k Chicago -142.7k Los Angeles -149.4k March 2009 Actuals: Job Growth Highlights Employment Growth Rate 12 Months ending March 2009 Austin +0.4% San Antonio –0.2% Fort Worth –0.4% Houston –0.6% Washington DC –0.6% Norfolk –0.9% Kansas City –1.1% Columbus –1.5% Dallas –1.7% St. Louis –2.3% U.S. -3.5% Source: U.S. Bureau of Labor Statistics

  16. Housing oversupply widespread but very uneven Source: Witten Advisors

  17. Local home values should rise modestly in 2010 Source: Calculated from Case-Schiller home price series; forecast by Witten Advisors

  18. Is hope around the corner? Well, on the horizon • In DFW, home prices stabilize in early 2010 and rise modestly from there • Bottom at prices comparable to 2001 • Nationally, prices soften until early 2011 • Back to 2000 price levels

  19. Questions/Discussion

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