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Where Are the Opportunities?
Existing Home Sales

           12,521 Homes
           Sell Every Day
           and 8,715 Buyers
           Receive a Mortgage




                                NAR 2/2012
Pending Home Sales
110.0




100.0




 90.0




 80.0




 70.0
        Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan



                                                                                       NAR 2/2012
Month’s Inventory of Homes for Sale
10.0


 9.0


 8.0


 7.0


 6.0


 5.0


 4.0
    Nov Dec Jan Feb Mar Apr May Jun   Jul Aug Sep Oct Nov Dec Jan


                                                            NAR 2/2012
Return on Investment




                       MSN Money.com, Case Shiller
Projections for 2012
“For 2012, we are expecting better
housing numbers than in 2011, and
a better second half than first.”
IHS Global Insights




                                     IHS Global Insights 2/13/2012
Projections for 2012
        “A lot of housing and
   macroeconomic data came in
   higher than expected so far in
     2012…while jobless claims
    have fallen steadily this year
   and indications on consumer
     sentiment show Americans
   may be ready to begin buying
          properties again.”
          Jason Philyaw, Editor, Housing Wire


Housing Wire 2/27/2012
Projections for 2012
  “The US economy continues to build on the momentum
  from the end of last year. Our outlook anticipates gradual,
  but steady, improvement in the economy and the housing
  market, supported by low interest rates and brightening
  job market prospects.”

  Frank Nothaft. Freddie Mac VP and chief economist




Freddie Mac 2/22/2012
Projections for 2012
   “The improved tone of housing data
   buoys hopes that the market may be on
   the verge of its long-awaited recovery.
   ..Increases in new- and existing-home
   sales over the last three months follow
   stronger job creation and improved
   affordability, including the overall drop
   last month in conventional mortgage
   rates to below 4%.”

   Moody’s Analytics




Moody’s Analytics 2/27/2012
Warren Buffett Speaks Out

Is it time to buy real estate?
“If I had a way of buying a couple hundred thousand single-family homes I
would load up on them.”


Why invest in real estate now?
“It’s a way, in effect, to short the dollar because you can take a 30-year
mortgage and if it turns out your interest rate’s too high, next week you
refinance lower. And if it turns out it’s too low, the other guy’s stuck with it for
30 years. So it’s a very attractive asset class now.”




                                                                             CNBC 2/13/2012
Warren Buffett Speaks Out

Is buying your own home better than investing in
stocks right now?
“If I knew where I was going to want to live the next five or 10 years I would
buy a home and I’d finance it with a 30-year mortgage… It’s a terrific deal.”


Should we buy multiple houses?
“If I was an investor that was a handy type and I could buy a couple of them
at distressed prices and find renters, I think it’s a leveraged way of owning a
very cheap asset now and I think that’s probably as an attractive an
investment as you can make now.”



                                                                 Source: CNBC 2/13/2012
Mortgage Rates – 30 Year Fixed
5.25



  5



4.75



 4.5



4.25



  4



3.75


       1/01/2011                    Today

                                 Federal Reserve
Home Rents Will Keep Rising
“Paying rent is getting
                             $ 1 , 2 0 0




                             $ 1 , 1 7 5




more painful for renters
                             $ 1 , 1 5 0




                             $ 1 , 1 2 5




across the country in the
                             $ 1 , 1 0 0




                             $ 1 , 0 7 5




face of rising demand
                             $ 1 , 0 5 0




                             $ 1 , 0 2 5




and tight supply…            $ 1 , 0 0 0




                            2009           2010   2011   2012*   2013*   2014*




It’s bad timing for people who have been spooked
by, or pushed out of, the residential housing market
and have decided to rent instead of buy. Home
ownership in the United States is at historic lows,
but at the same time rental prices are on the rise.”
                                                             MSNBC.com 2/6/2012
Buy                                                                           Rent
      Housing Cost Over
        Next 30 Years*

                                                  $900K




                $540K




               Owners                           Renters

      * Assuming payment of $1,500 for both rent and mortgage; a fixed
      rate mortgage and an annual rent increase of 3.2% for inflation.
                                                                         Forbes.com 10/13/2011
Buy                                                                          Rent
          Retirement Fund
            Created from
         Homeowner Equity
           After 30 Years*

                  $400K




                                                  $0
                  Owners                        Renters

      * Assuming $300,000 current value with a 1% annual appreciation
      rate for residential property.
                                                                        Forbes.com 10/13/2011

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Opportunities in 2012

  • 1. Where Are the Opportunities?
  • 2. Existing Home Sales 12,521 Homes Sell Every Day and 8,715 Buyers Receive a Mortgage NAR 2/2012
  • 3. Pending Home Sales 110.0 100.0 90.0 80.0 70.0 Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan NAR 2/2012
  • 4. Month’s Inventory of Homes for Sale 10.0 9.0 8.0 7.0 6.0 5.0 4.0 Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan NAR 2/2012
  • 5. Return on Investment MSN Money.com, Case Shiller
  • 6. Projections for 2012 “For 2012, we are expecting better housing numbers than in 2011, and a better second half than first.” IHS Global Insights IHS Global Insights 2/13/2012
  • 7. Projections for 2012 “A lot of housing and macroeconomic data came in higher than expected so far in 2012…while jobless claims have fallen steadily this year and indications on consumer sentiment show Americans may be ready to begin buying properties again.” Jason Philyaw, Editor, Housing Wire Housing Wire 2/27/2012
  • 8. Projections for 2012 “The US economy continues to build on the momentum from the end of last year. Our outlook anticipates gradual, but steady, improvement in the economy and the housing market, supported by low interest rates and brightening job market prospects.” Frank Nothaft. Freddie Mac VP and chief economist Freddie Mac 2/22/2012
  • 9. Projections for 2012 “The improved tone of housing data buoys hopes that the market may be on the verge of its long-awaited recovery. ..Increases in new- and existing-home sales over the last three months follow stronger job creation and improved affordability, including the overall drop last month in conventional mortgage rates to below 4%.” Moody’s Analytics Moody’s Analytics 2/27/2012
  • 10. Warren Buffett Speaks Out Is it time to buy real estate? “If I had a way of buying a couple hundred thousand single-family homes I would load up on them.” Why invest in real estate now? “It’s a way, in effect, to short the dollar because you can take a 30-year mortgage and if it turns out your interest rate’s too high, next week you refinance lower. And if it turns out it’s too low, the other guy’s stuck with it for 30 years. So it’s a very attractive asset class now.” CNBC 2/13/2012
  • 11. Warren Buffett Speaks Out Is buying your own home better than investing in stocks right now? “If I knew where I was going to want to live the next five or 10 years I would buy a home and I’d finance it with a 30-year mortgage… It’s a terrific deal.” Should we buy multiple houses? “If I was an investor that was a handy type and I could buy a couple of them at distressed prices and find renters, I think it’s a leveraged way of owning a very cheap asset now and I think that’s probably as an attractive an investment as you can make now.” Source: CNBC 2/13/2012
  • 12. Mortgage Rates – 30 Year Fixed 5.25 5 4.75 4.5 4.25 4 3.75 1/01/2011 Today Federal Reserve
  • 13. Home Rents Will Keep Rising “Paying rent is getting $ 1 , 2 0 0 $ 1 , 1 7 5 more painful for renters $ 1 , 1 5 0 $ 1 , 1 2 5 across the country in the $ 1 , 1 0 0 $ 1 , 0 7 5 face of rising demand $ 1 , 0 5 0 $ 1 , 0 2 5 and tight supply… $ 1 , 0 0 0 2009 2010 2011 2012* 2013* 2014* It’s bad timing for people who have been spooked by, or pushed out of, the residential housing market and have decided to rent instead of buy. Home ownership in the United States is at historic lows, but at the same time rental prices are on the rise.” MSNBC.com 2/6/2012
  • 14. Buy Rent Housing Cost Over Next 30 Years* $900K $540K Owners Renters * Assuming payment of $1,500 for both rent and mortgage; a fixed rate mortgage and an annual rent increase of 3.2% for inflation. Forbes.com 10/13/2011
  • 15. Buy Rent Retirement Fund Created from Homeowner Equity After 30 Years* $400K $0 Owners Renters * Assuming $300,000 current value with a 1% annual appreciation rate for residential property. Forbes.com 10/13/2011