Market update slideshow for BHG Mason-McDuffie Real Estate Sales Meeting July 2, 2014

1. This map outlines the total expenditures
that result from a single home sale.
Total Economic Impact of a Home Sale

3. Existing Home Sales
NAR 4/2014

4. 100 = Historically Healthy Level
Pending Home Sales
NAR 4/2014

5. Bill McBride
Calculated Risk
A decline in existing home sales doesn't
mean the housing recovery is over. Far from
it! We need to look at the composition of
sales (distressed vs. conventional).
The percent of conventional
sales are increasing.
That is a positive sign.

6. Total Sales Year-Over-Year: 12 Month Sum
% increase or decrease in current 12 months of
total sales over the prior 12 months of total sales

7. FreddieMac
Housing is stronger today
than at any point since the
Great Recession began
and hit bottom in 2009.

8. 50%
16% 13%
Housing Starts House Prices Home Sales
Improvement in
Housing since
bottom in 2009
FreddieMac 4/2014

9. FreddieMac 4/2014
20%
3%0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Housing Starts Home Sales
Projections for
Housing in 2014

10. Has your interest in purchasing a
home increased over the last year?
Millennial Buyers
Yes – 59%
Move-up Buyers
Yes – 45%
Pulte 5/2014

11. Americans still aspire to buy second homes
and have contributed to the growth of the
market consistently since its bottom in 2009...
As the population continues to age, we expect
people to continue to use their savings to buy
second homes, thereby contributing to a
segment of the mortgage market that will
continue to grow in the years to come.
FannieMae

12. 30%
24% 24%
14%
6%
0%
10%
20%
30%
Real Estate Gold Stocks/Mutual Funds Savings Accounts/CDs Bonds
Best Long Term Investment
Gallup 4/2014

13. Gallup 4/2014

14. 25% 24% 23%
21%
7%
0%
10%
20%
30%
Real Estate Stocks/Mutual Funds Savings Accounts/CDs Gold Bonds
Best Long Term Investment
18-29 year olds
Gallup 4/2014

15. 30%
28%
23%
10%
7%
0%
10%
20%
30%
Real Estate Gold Stocks/Mutual Funds Savings Accounts/CDs Bonds
Best Long Term Investment
50-64 year olds
Gallup 4/2014

16. Best Long Term Investment
By Income Category
28%
26%
38%
31%
26%
18%
13%
25%
30%
17%
16%
7%7%
6%
7%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Less than $30K $30K-$74,999 $75K and over
Real Estate Gold
Stocks/Mutual Funds Savings Accounts/CDs
Bonds
Gallup 4/2014

17. PRICES

18. “We leave our 2014
projections for home
prices (up 5-7% for the
year) unchanged.”
Morgan Stanley
“Our base case
projection for 2014 US
home price appreciation
is unchanged at 7%.”
Barclays
HousingWire 4/2014
Home Prices
Going Forward

19. CoreLogic 3/2014
“Home prices nationwide remain
16.9% below their peak, which
was set in April 2006.”

20. Prices Compared to Peak w/ Date of Peak

21. % of Respondents Reporting
Appraisal Problems
34%
31%
29%
24%
0%
5%
10%
15%
20%
25%
30%
35%
2011 2012 2013 2014
Realtors Confidence Index 4/2014

22. Appraisal Issues/Problems
March 2014
Realtors Confidence Index 4/2014

23. Distressed Properties

24. 10%
15%
20%
25%
30%
35%
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 Mar
Percentage of Distressed Property Sales
35%
14%
21%
NAR 4/2014

25. Foreclosure Inventory by State

26. Months of Shadow Inventory

27. Share of Mortgages with Negative Equity

29. RETURN ON INVESTMENT
51.3
34.9
4.3
65.4
Dow S&P NASDAQ Real Estate
January 2000 – May 2014
MSNMoney.com, Case Shiller

30. 4.0
4.3
4.5
4.8
5.0
5.3
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar
Months Inventory of Homes for Sale
5-6 Months =
Normal Market
Inventory
NAR 4/2014

31. 4.0
4.3
4.5
4.8
5.0
5.3
Dec Jan Feb Mar
Months Inventory of Homes for Sale
5-6 Months = Normal Market Inventory
NAR 4/2014

32. Months 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 NovDec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct NovDec Jan Feb Mar
5-6 Months = Normal Market Inventory
NAR 4/2014

33. Year-over-Year Change in Prices
S&P Case Shiller 4/2014

34. 3.25
3.5
3.75
4
4.25
4.5
4.75
2013 - 2014
30 Year Fixed
Mortgage Rates
Freddie Mac 4/2014

35. Mortgage Rate
Projections
Analyst Projected Rate
2015 2Q
Fannie Mae 4.9%
Freddie Mac 5.3%
Mortgage Bankers Assoc 5.2%
National Assoc of Realtors 5.5%
4/2014

36. Resources
Slide Slide Title Link
2 Total Economic Impact of a Home Sale http://www.realtor.org/reports/state-by-state-economic-impact-of-real-estate-activity
5,6,9,27,
33,34,35,
36
Existing Home Sales, Pending Home Sales,
12,575 Homes Sell, % Distressed Property, Year-
over-Year Inventory, Months Inventory, Homes for
Sale,
http://www.realtor.org/
7 Bill McBride Quote http://www.calculatedriskblog.com/2014/04/comments-on-housing-and-existing-home.html
8,28,29, 30
Total Sales Year-Over-Year, Foreclosure
Inventory, Months Shadow Inventory, Share of
Mortgages
http://www.corelogic.com/about-us/researchtrends/the-marketpulse.aspx#
10,11,12 Freddie Mac Data
http://www.freddiemac.com/blog/research_and_analysis/20140410_springforward_housingforecast.htm
13 Interest in Purchasing - Pulte Homes Survey
http://pultegroupinc.com/investors/press-releases/press-release-details/2014/PulteGroup-Home-Index-S
14 Fannie Mac Quote http://www.fanniemae.com/resources/file/research/datanotes/pdf/housing-insights-040714.pdf
15 – 19, 49 Best Long Term Investment - Gallup Poll Slides http://www.gallup.com/poll/168554/americans-sold-real-estate-best-long-term-investment.aspx
21 Morgan Stanley & Barclays Quotes
http://www.housingwire.com/articles/29815-wall-street-home-price-appreciation-still-expected-to-hit-7
22, 23, Corelogic Quote, Prices Compared to Peak http://www.corelogic.com/research/hpi/corelogic-hpi-february-2014.pdf
24, 25
% Reported Appraisal Problems, Appraisal Issues
March 2014
http://www.realtor.org/sites/default/files/MARCH-2014-RCI.pdf

37. Resources
Slide Slide Title Link
32 Return on Investment
http://www.spindices.com/index-family/real-estate/sp-case-shiller
http://money.msn.com/
37,38 Year-over-Year Change in Price, Case-Shiller HPI
https://www.spice-indices.com/idpfiles/spice-
assets/resources/public/documents/83930_cshomeprice-release-0325.pdf?
force_download=true
39 30 Year Fixed Mortgage Rates http://www.freddiemac.com/pmms
40 Mortgage Rate Projections
http://fanniemae.com/resources/file/research/emma/pdf/Housing_Forecast_011314.pdf
http://www.freddiemac.com/finance/docs/Jan_2014_public_outlook.pdf
http://www.mortgagebankers.org/files/Bulletin/InternalResource/86783_.pdf
http://www.realtor.org/sites/default/files/reports/2013/embargoes/phs-12-30-illtratatb/forecast-
1-2014-us-economic-outlook-12-30-2013.pdf
44,47 Guy Kawasaki & Seth Godin Quote LeadingRE Conference 2014

39. To provide value, real estate
agents must not only provide
information but also insights
into that information.
Guy Kawasaki
Silicon Valley Author, Speaker,
Investor and Business Advisor

42. It not about having the dots.
It’s about connecting
the dots!!
Seth Godin
Author, Entrepreneur,
Marketer and Public Speaker