This document analyzes recent data and projections from analysts regarding the housing market. Mortgage rates are projected to rise gradually in 2013 while home prices are expected to increase by 4-8% nationally due to tight inventory and high affordability. Several metropolitan areas saw double-digit year-over-year price increases. Foreclosures continue declining from peak levels as the housing recovery strengthens. Overall, buying a home remains more affordable than renting in most major cities.
3. MSN Money.com, Case Shiller
33.3
12.5
-17.1
46.1
-30
-10
10
30
50
Dow S&P NASDAQ Real Estate
January 2000 – April 2013
Return on Investment
4. 90
95
100
105
110
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
Pending Home Sales
NAR 3/2013
100 = Historically Healthy Level
5. 80
90
100
110
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2013 2012 2011
January 2012 – December 2012
January 2011 – December 2011
100 = Historically Healthy Level
NAR 3/2013
Pending Home Sales
6. Analyst New Previous
Bank of America 8% 4.7%
Capital Economics 8% 5%
Deutsche Bank 7% 2.5%
Freddie Mac 4.5% 2%
John Burns Consulting 9.1% 5.3%
J.P. Morgan 7% 3%
Morgan Stanley 7% 5%
NAR 7% 4%
Zelman & Associates 7% 5.5%
Zillow 4.2% 2.9%
Future Price Projections
Wall Street Journal 3/2013
7. S&P Case Shiller National Pricing Index
120
130
140
150
160
170
180
190
200
2006 – 2012
KCM 3/2013 Case Shiller
11. Home Price Expectation Survey 3/2013
Home Price Expectation Survey
The nationwide panel of 118 economists, real
estate experts and investment and market
strategists expects home values to end 2013 up
an average of 4.6 percent according to the first
quarter Home Price Expectations Survey.
Projected Home Prices - 2013
14. Cumulative Appreciation by 2017
22.0%
34.2%
22.0%
11.7%
0.0%
10.0%
20.0%
30.0%
40.0%
Pre-Bubble Trend Bulls All Projections Bears
Home Price Expectation Survey 3/2013
15. Percentage Appreciation by Survey
3.6
3.9
2.7
3.2
1.4
2.6
4.6
4.2
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
5.5
6
2013 2014
3 Years Ago 2 Years Ago 1 Year Ago Now
Home Price Expectation Survey 3/2013
18. Metropolitan Area Year-over-Year
Atlanta 13.4%
Boston 4%
Charlotte 6%
Chicago 3.3%
Cleveland 4.8%
Dallas 7%
Denver 9.2%
Detroit 13.8%
Las Vegas 15.3%
Los Angeles 12.1%
Metropolitan Area Year-over-Year
Miami 10.8%
Minneapolis 12.1%
New York .6%
Phoenix 23.2%
Portland 8.3%
San Diego 9.8%
San Francisco 17.5%
Seattle 8.7%
Tampa 8.9%
Washington 5.9%
S&P Case-Shiller Home Price Indices
S&P Case Shiller 3/2013
19. Home Prices in the Short Term
130.00
135.00
140.00
145.00
150.00
May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr
2010-11
2011-12
2012-13
S&P Case Shiller 3/2013
PROJECTED?
20. Metropolitan Area M-o-M
Atlanta 1.0%
Boston 0%
Charlotte .2%
Chicago -.9%
Cleveland -.5%
Dallas 0%
Denver 0%
Detroit -.9%
Las Vegas 1.6%
Los Angeles .9%
Metropolitan Area M-o-M
Miami .8%
Minneapolis -.5%
New York .1%
Phoenix 1.1%
Portland -.4%
San Diego -.6%
San Francisco 0.1%
Seattle -.3%
Tampa .9%
Washington -.7%
S&P Case-Shiller Home Price Indices
S&P Case Shiller 3/2013
22. The MBA projects 30 year
mortgage rates will hit 4.3%
by the end of the year…
Mortgage Rates Moving Forward
and, they have
already started to
inch upward…
MBA 3/2013
25. Price P&I
Over 12 Months $14,173.68
Over 30 Year Mortgage $425,210.40
The Move-Up Seller
26. Opportunity Still Exists - For Now
“Although buying a home is still cheaper than
renting, the gap is closing. In 2013, home prices
should rise faster than rents, and mortgage rates
are likely to rise in the next year as the economy
improves. …People who didn’t buy a home
last year may have missed the bottom of the
market, but they haven’t completely missed
the boat. Buying remains cheaper
than renting in all 100 large metros.”
Trulia 3/2013
Jed Kolko, Trulia’s Chief Economist
27. Month’s Inventory of Homes for Sale
4.0
5.0
6.0
7.0
8.0
9.0
10.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
NAR 3/2013
5-6 Months = Normal Market Inventory
29. OCC and OTS Mortgage Metrics Report 3/2013
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
4Q
2009
1Q
2010
2Q
2010
3Q
2010
4Q
2010
1Q
2011
2Q
2011
3Q
2011
4Q
2011
1Q
2012
2Q
2012
3Q
2012
4Q
2012
in millions
Foreclosures in Process
30. Cheaper to Buy than Rent
Trulia 3/2013
“Today’s it is 44% cheaper to buy versus
rent. In fact, homeownership is
cheaper than renting in all of America’s
100 largest metros. That’s because
falling mortgage rates have kept
buying almost as affordable, relative
to renting, as it was last year.”
35. Projected Home Prices - 2013
“Home prices continue to
show momentum amid
shrinking inventory and
record high affordability,
prompting us to revise up
our original forecast (4.7%)
for home prices this year.
Bank of America
We now expect national
home prices to increase
8% this year.”
Bank of America 3/2013
36. Projected Home Prices - 2013
“Strong demand and tight inventory have brought
existing home sales back to ‘normal’ levels, and
further gains are possible…
These conditions, combined with broader
economic indicators, lead Capital
Economics to revise its previous
forecast of a 5 percent price gain
this year up to 8 percent.”
Capital Economics
DSNews 3/2013
37. Morgan Stanley
“Strong momentum in home prices as well as
housing activity gave Morgan Stanley analysts
enough confidence to upgrade
their home price appreciation
projections to roughly 7%
(from 5%) for 2013.
Projected Home Prices - 2013
HousingWire 3/2013
39. Recent Rate Movement
Freddie Mac 4/2013
3.3
3.35
3.4
3.45
3.5
3.55
3.6
3.65
30 Year Fixed
Rate Mortgage
This Year
40. S&P Case-Shiller Home Price IndicesS&P Case-Shiller Home Price Indices
Metropolitan Area Year-over-Year
Atlanta 13.4%
Boston 4%
Charlotte 6%
Chicago 3.3%
Cleveland 4.8%
Dallas 7%
Denver 9.2%
Detroit 13.8%
Las Vegas 15.3%
Los Angeles 12.1%
Metropolitan Area Year-over-Year
Miami 10.8%
Minneapolis 12.1%
New York .6%
Phoenix 23.2%
Portland 8.3%
San Diego 9.8%
San Francisco 17.5%
Seattle 8.7%
Tampa 8.9%
Washington 5.9%
S&P Case Shiller 3/2013
41. S&P Case-Shiller Home Price IndicesS&P Case-Shiller Home Price Indices
S&P Case Shiller 3/2013
Metropolitan Area M-o-M
Atlanta 1.0%
Boston 0%
Charlotte .2%
Chicago -.9%
Cleveland -.5%
Dallas 0%
Denver 0%
Detroit -.9%
Las Vegas 1.6%
Los Angeles .9%
Metropolitan Area M-o-M
Miami .8%
Minneapolis -.5%
New York .1%
Phoenix 1.1%
Portland -.4%
San Diego -.6%
San Francisco 0.1%
Seattle -.3%
Tampa .9%
Washington -.7%
42. Resources
KEEPINGCURRENTMATTERS.COM
Slide Slide Title Link
4,5 Pending Home Sales http://www.realtor.org
6 Future Price Projections http://blogs.wsj.com/economics/2013/03/27/home-prices-seen-making-stronger-gains-in-2013/
11,12,
13,14,
15
Projected Home Prices – 2013,
Average Annual Appreciation, Home
Price Expectation Survey, Cumulative
Appreciation by 2017, Percentage
Appreciation by Survey
https://www.pulsenomics.com/uploads/Q12013_ZHPES_Press_Release_Final.pdf
16,17,
18, 19,
20
S&P Case-Chiller Home Price Indices,
Home Prices in the Short Term
http://www.standardandpoors.com/indices/articles/en/us/?articleType=PDF&assetID=1245349348126
21, 23
30 Year Fixed Rate Mortgage History,
Recent Rate Movement
http://www.freddiemac.com/pmms
22 Mortgage Rates Moving Forward http://www.marketwatch.com/story/mortgage-rates-will-rise-next-year-but-slowly-2012-10-24
26 Opportunity Still Exists – For Now http://info.trulia.com/rentvsbuy-winter2013
27 Month’s Inventory of Homes for Sale http://www.realtor.org
28,29
Completed Foreclosures,
Foreclosures in Progress
http://www.occ.gov/publications/publications-by-type/other-publications-reports/mortgage-metrics-2012/m
30,31 Cheaper to Buy than Rent http://trends.truliablog.com/2013/03/rent-vs-buy-winter-2013
43. Resources
KEEPINGCURRENTMATTERS.COM
Slide Slide Title Link
33 Percentage of Distressed Property Sales http://www.realtor.org
36 Projected Home Prices - 2013
http://www.dsnews.com/articles/capital-economics-revises-home-price-forecast-upward-
2013-03-08
37 Projected Home Prices – 2013
http://www.housingwire.com/news/2013/03/20/housing-track-improve-hurdles-remain-
morgan-stanley
38,39
30 Year Fixed Rate Mortgage History,
Recent Rate Movement
http://www.freddiemac.com/pmms
40,41 S&P Case-Chiller Home Price Indices
http://www.standardandpoors.com/indices/articles/en/us/?
articleType=PDF&assetID=1245349348126
44. “Trend spotting, knowing what’s ahead (ahead of your
competition), can create enormous advantages. But to see
future trends and have the courage to act on them you need
to ‘think different’ as an Apple ad campaign once advised.
Trying to spot coming opportunities with your current
assumptions and preconceived notions won’t work.
Finding the Next Big Thing requires new knowledge
and new ways of thinking.”
The Next Big Thing