KCM Divided into Three Sections

2. KCM Divided into Three Sections

3. 2014 PROJECTIONS

4. The Year of…

5. The ECONOMY

6. Calculated Risk 12/2013

7. 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

8. 2014 will be the year of the repeat homebuyer - Trulia

9. 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

10. MILLENNIALS

11. HOUSEHOLDS in the U.S.* 121M 2014-2017 Current Households in the United States *Urban Land Institute’s 2014 Emerging Trends in Real Estate 3.7% 4.48M Projected Growth over the Next 3 Years Additional Households to be Formed

12. Affordability is still good compared to any time over the last 50 years. “Well, I think it’s a basic question of supply and demand. When you have that many more renters coming into the market looking for 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

13. Affordability is still good compared to any time over the last 50 years. "We are in the midst of the worst rental affordability crisis that this country has known." Shaun Donovan Secretary of Housing & Urban Development.

14. Homeowners Net Worth… OVER 30X greater than renters Federal Reserve

15. An American Family’s Net Worth Federal Reserve

17. Existing Home Sales S&P Case Shiller 12/2013

18. Year-Over-Year % Change in House Sales NORTHEAST Up 6.6% WEST Down 10.1% MIDWEST Unchanged NAR’s Existing Homes Sales Report 12.2013 SOUTH Up 1%

19. Pending Home Sales 100 = Historically Healthy Level NAR 12/2013

20. Impact of Increasing INTEREST RATES

21. ta·per ˈtāpər/ Verb – to diminish or reduce

22. $151.08

23. Affordability is still good compared to any time over the last 50 years. “I think it is very likely that QE3 will be completed by the end of 2014. There are 8 meetings during the year, and I 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

24. 2013 30 Year Fixed Mortgage Rates Federal Reserve 12/2013

25. Mortgage Rate Projections

26. Calculated Risk 7/2013

27. Percent of the country remaining affordable at different 30 year mortgage rates Freddie Mac

28. Rate deemed SIGNIFICANT threat* *on the 30-Year fixed rate mortgage Pulsenomics

29. Buyer’s Purchasing Power RATE Principal and Interest Payments rounded to the nearest dollar amount.

30. Buyer’s Purchasing Power RATE Principal and Interest Payments rounded to the nearest dollar amount.

31. Buyer’s Purchasing Power RATE Principal and Interest Payments rounded to the nearest dollar amount.

32. Buyer’s Purchasing Power RATE Principal and Interest Payments rounded to the nearest dollar amount.

33. Buyer’s Purchasing Power RATE Principal and Interest Payments rounded to the nearest dollar amount.

34. Home Prices

36. 12/2013

37. Year-over-Year Change in Prices S&P Case Shiller 12/2013

38. Month-Over-Month Price Changes 12/2013

41. Months Inventory of Homes for Sale 5-6 Months = Normal Market Inventory NAR 12/2013

42. Year-over-Year Inventory Levels NAR 12/2013

43. RETURN ON INVESTMENT January 2000 – December 2013 MSN Money.com, Case Shiller

44. S&P Case-Shiller Home Price Indices S&P Case Shiller 12/2013

45. Months Inventory of Homes for Sale 5-6 Months = Normal Market Inventory NAR 12/2013

46. Percentage of Distressed Property Sales 35% 14% NAR 12/2013

48. Nail Down the TRUST FACTOR

49. 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.”

50. 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.”