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Keeping Current Matters

Keeping Current Matters. September 2013. KCM Divided into Three Sections. Sales Started Sustained Recovery September 2011. Prices Started Sustained Recovery June 2012. Real Estate Recovery. Inventory Started Sustained Recovery January 2013. NAR 8/2013. A Swing Back Toward Ownership.

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Keeping Current Matters

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  1. Keeping Current Matters September 2013

  2. KCM Divided into Three Sections

  3. Sales Started Sustained Recovery September 2011 Prices Started Sustained Recovery June 2012 Real Estate Recovery Inventory Started Sustained Recovery January 2013 NAR 8/2013

  4. A Swing Back Toward Ownership “The forces pulling the home ownership rate lower are past their apex…House prices are rising, but remain affordable at 21% below peak, even as rents rise. Some who lost homes early in the crisis can now qualify again for mortgage loans. As housing recovers and consumers again see prices rising steadily, perceptions will swing back to favor home ownership.” Celia ChenSenior Director - Moody's Analytics Moody’s Analyitics 8/2013

  5. Boomerang Buyers “HUD recently announced that people who lost their home through a foreclosure, short sale or bankruptcy, may be eligible to finance a home again in as little as 12 months. This is a reduction from the previously required minimum of 36 months from the date of the “most recent event.” Released August 15, HUD provided guidelines under “Back to Work: Extenuating Circumstances” meant to ease the path for home ownership for many.” KCM Blog 8/2013

  6. Reexamining the Social Benefits of Homeownership after the Housing Crisis “Even after the dramatic loss of equity and the high foreclosure rates, the early evidence suggests that people seem to believe that, over the long run, owning is still preferable to renting... The long term cultural preference for owning seems to have weathered the recent housing crisis.” Joint Center for Housing Studies Harvard University 8/2013

  7. Reexamining the Social Benefits of Homeownership after the Housing Crisis “The research on home-buying expectations supports the conclusion that very large percentages of Americans still expect to buy a home at some time in the future… Moreover, the finding that younger renters and owners are more likely than their older counterparts to expect to own bodes well for the future of the housing market.” Joint Center for Housing Studies Harvard University 8/2013

  8. FHFA Regional Home Prices (year-over-year) FHFA 2013 2Q HPI Report

  9. 2012 3Q 2012 4Q 2013 1Q 2013 2Q

  10. FHFA State Home Prices (year-over-year) FHFA 2013 2Q HPI Report

  11. 35% Loss in Price, then 35% Gain Still 12% off Peak

  12. Months Supply & Impact on Price

  13. Months Inventory of Homes for Sale 5-6 Months = Normal Market Inventory NAR 8/2013

  14. Year-over-Year Inventory Levels NAR 8/2013

  15. Year-over-Year Change in Prices S&P Case Shiller 8/2013

  16. 3.2 million homeowners have been freed from negative equityin the last twelve months. 1.9 million additional are expected to be freed in the next twelve months. Zillow 8/2013

  17. Cost vs. Price

  18. Mortgage Rate Projections 8/2013

  19. Home Prices Next Year In the recent Home Price Expectation Survey, over 100 leading housing analysts called for an approximate 5% increase in home values over the next twelve months. Home Price Expectation Survey 8/2013

  20. Thinking about moving up to the home of your dreams?

  21. The Move-Up Seller

  22. The Move-Up Seller

  23. Return on Investment January 2000 – August 2013 MSN Money, Case Shiller

  24. Pending Home Sales 100 = Historically Healthy Level NAR 8/2013

  25. Pending Home Sales 100 = Historically Healthy Level NAR 8/2013

  26. Months Inventory of Homes for Sale 5-6 Months = Normal Market Inventory NAR 8/2013

  27. Percentage of Distressed Property Sales 35% 15% NAR 8/2013

  28. S&P Case-Shiller Home Price Indices S&P Case Shiller 8/2013

  29. 5 Reasons to Hire a Real Estate Professional They help with all disclosures and paperwork necessary in today’s heavily regulated environment. They are well educated in and experienced with the entire sales process. They act as a ‘buffer’ in negotiations with all parties throughout the entire transaction. They help understand today’s real estate values when setting the price on a listing or on an offer to purchase. They simply and effectively explain today’s real estate headlines and decipher what they mean to you.

  30. NAR’s 2013 HOUSING PULSE Survey 68 51 % % Found eight in 10 Americans believe buying a home is a good financial decision Found sixty eight percent of those surveyed responded that now is a good time to buy a home Found over 50% of renters say that eventually owning a home is one of their highest personal priorities NAR 8/2013

  31. Year-over-Year Change in Prices S&P Case Shiller 8/2013

  32. 30 Year Fixed Rate Mortgage History January 2012 - September 2013 Federal Reserve 9/2013

  33. The Cost of Waiting *For the first two examples, we used the NAR’s Existing Home Sales Report to establish median price and Freddie Mac’s Primary Mortgage Market Survey to establish mortgage rate. We also assumed a 20% down payment in all examples. **To establish next year’s pricing, we depended on the over 100 housing experts surveyed for the Home Price Expectation Survey who called for an approximate appreciation rate of 5% over the next twelve months. For the interest rate, we took the average of the projections from the Mortgage Bankers’ Association, Freddie Mac and Fannie Mae.

  34. Resources KEEPINGCURRENTMATTERS.COM

  35. Resources KEEPINGCURRENTMATTERS.COM

  36. “Home buyers are more informed than ever with their Internet searches and ongoing research; however, there’s a critical need to transform that information into analysis and advice that helps consumers make the best home-buying and selling decisions.” Stephen Phillips Chief Operating Officer for HSF Affiliates LLC

  37. Home Affordability Index 155.2 206.5 127.4 172.2 To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment. NAR 8/2013

  38. Family Wealth “The rise in the renter population with no net increase in the owner population at a time of housing recovery automatically means greater unequal distribution of wealth. Housing wealth is rising because of price increases, but the wealth is going to the fewer and fewer households who happen to be homeowners and those who own more than one home.” Lawrence Yun, Chief Economist of the National Association of Realtors NAR 8/2013

  39. Keeping Current Matters

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