Post on 28-Dec-2015
KCM Divided into Three Sections
Be their ‘Expert’This is a person to whom people will turn for advice on difficult or complex real estate decisions.
90
95
100
105
110
115
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
100 = Historically Healthy Level
Pending Home Sales
NAR 2/2014
Existing Home Sales
NAR 2/2014
WEST- 8.1%
MIDWEST +2.0%
SOUTH +3.6%
NORTHEAST+7.1%
U.S. + .8%
Year-over-Year as perNAR’s 2013 4Q Report
% Change in House Sales
NAR 2/2014
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
Percentage of Distressed Property Sales
35%
15%
23%
Date Sales % Non-Distressed Total Non-distressed
Jan ’13 4.87M 77% 3.75M
Jan ‘14 4.62M 85% 3.93M
Non-Distressed Sales Still Up
-19.1%
-6%
3.9%
15.2%19.4%
37.5%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
$0-100K $100-250K $250-500K $500-750K $750K-1M $1M+
% Sales +/- -19.1% -6% 3.9% 15.2% 19.4% 37.5%
Percentage Change in Sales from a Year Ago by Price Range
Bill McBrideCalculated Risk Finance & Economics
The bottom line is the housing weakness should be temporary. There
should be more inventory this year, price increases should slow, and sales
volumes increase.
8.2% 7.9%
5.2%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
January 2013 December 2013 January 2014
Institutional Investor Sales
RealtyTrac 2/2014
WHO ARE THEY?
HOUSEHOLD TYPE
FIRST TIME HOMEBUYERS
NAR’s 2013 Profile of Home Buyers & Sellers
WHAT ARE SOURCES OF DOWNPAYMENT?
Savings
Gift from Relative or Friend
Sale of Stocks or Bonds
401k/Pension Fund
Loan from Relative or Friend
Inheritance
IRA
78%
27%
9%
8%
7%
4%
3%
FIRST TIME HOMEBUYERS
NAR’s 2013 Profile of Home Buyers & Sellers
Cut Spendingon Luxury Items
Cut Spending on Entertainment
Cut Spendingon Clothes
Cancelled Vacation Plans
Income froma 2nd Job
Sold/Didn’t Buy a Car
33%
27%
13%
9%
5%
40%
WHAT SACRIFICES DO THEY MAKE TO PURCHASE?
FIRST TIME HOMEBUYERS
NAR’s 2013 Profile of Home Buyers & Sellers
FINANCING
95%
5%0%
25%
50%
75%
100%
Mortgage Cash
FIRST TIME HOMEBUYERS
NAR’s 2013 Profile of Home Buyers & Sellers
3.25
3.5
3.75
4
4.25
4.5
4.75
2013 - 2014 30 Year Fixed Mortgage Rates
Freddie Mac 2/2014
Mortgage Rate Projections
Analyst Projected Rate 1Q 2015
Fannie Mae 4.9% National Assoc of Realtors 5.5% Freddie Mac 5.1% Mortgage Bankers Assoc 5.1%
2/2014
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
6.0%
6.5%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Jan-14 1Q 2015 P
Freddie Mac 2/2014
2003 - 2013 30 Year Fixed
Mortgage Rates
Buying is CHEAPER than renting in ALL of the 100 largest metros by an average of… 38%
Trulia 2/2014
$300
$350
$400
$450
$500
$550
$600
$650
$700
$750
The Increasing Cost of Renting
Median Asking Rent1988-2013
Census Bureau 2014
3.8%
6.6%
Bachelor's Degree or More U.S.
Unemployment Rate: Millennials Ages 25-32 with a Bachelor’s Degree vs. U.S. Rate
Bureau of Labor Statistics & Pew Research 2/2014
$45,500
$40,872
Bachelor's Degree or More U.S.
Median Annual Full Time Wage: Millennials Ages 25-32 with Bachelor’s Degree vs. U.S. Rate
Bureau of Labor Statistics & Pew Research 2/2014
29%Have no student debt
$29.4K Average Student Debt
$335.33Typical Payment
The Project on Student Debt
Median HOUSEHOLD Income of Young Adults (25-32 years old) Living in their Parents’ Home?
Pew Research 2/2014
$113,181
Millennials Belief in Real Estate and its Agents
Optimistic About Real Estate In 2014 70%
Look To An Agent For Sound Guidance 62%
Think A Good Agent Can Maximize The Investment 70%
74%
4% 2%0%
10%
20%
30%
40%
50%
60%
70%
80%
Email Social Media Text
Method Used by 18-29 Year Olds to Download Information
HomePrices
Year-over-Year Price Change by Region
FHFA 2013 4Q
Year-over-Year Price Change by State
FHFA 2013 4Q
Home Price Expectation
SurveyA nationwide panel of over one hundred
economists, real estate experts and
investment & market strategists.
Home Price Expectation Survey 2014 1Q
Average Annual % APPRECIATION
4.54.0
3.7 3.7 3.8
2014 2015 2016 2017 2018
PROJECTED Percentage Appreciation
Home Price Expectation Survey 2014 1Q
Home Price Expectation Survey 2014 1Q
Cumulative House Appreciation by 2018
19.4%
28.4%
19.7%
10.9%
Pre-BubbleTrend
Bulls All Projections
Bears
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
S&P Case Shiller 2/2014
Year-over-Year Change in Prices
RETURN ON INVESTMENT
49.2
33.3
9.3
65.7
Dow S&P NASDAQ Real Estate
January 2000 – February 2014
MSN Money.com, Case Shiller
S&P Case-Shiller Home Price Indices
S&P Case Shiller 2/2014
-24%
-20.8%
-16.8%
-14%-13%
-7.6%
-5%-6.2%
1.8% 0.9%
5%
1.6%
7.3%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
Jan Feb March April May June July Aug Sept Oct Nov Dec Jan
% -24% -20.8 -16.8 -14% -13% -7.6% -5% -6.2% 1.8% 0.9% 5.0% 1.6% 7.3%
NAR 2/2014
Year-over-Year Inventory Levels
4.0
4.3
4.5
4.8
5.0
5.3
Jan Feb Mar Apr May Jun Jul August Sept Oct Nov Dec Jan
Months Inventory of Homes for Sale
5-6 Months = Normal Market Inventory
NAR 2/2014
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 Nov Dec 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
5-6 Months = Normal Market Inventory
NAR 2/2014
ResourcesSlide Slide Title Link
6, 7, 9, 42, 43, 44
Pending Home Sales, Existing Home Sales, % Distressed Property Sales, Year-over-Year Inventory, Months Inventory Homes for Sale
http://www.realtor.org/
8 % Change in House Saleshttp://www.realtor.org/news-releases/2013/12/existing-home-sales-decline-in-november-but-strong-price-gains-continue
10 Non-Distressed Sales Still Uphttp://www.realtor.org/news-releases/2014/02/existing-home-sales-drop-in-january-while-prices-continue-to-grow
11Percentage Change in Sales from a Year Ago by Price Range
http://economistsoutlook.blogs.realtor.org/2014/02/23/a-closer-look-at-the-latest-ehs-release/
12 Bill McBride Quotehttp://www.calculatedriskblog.com/2014/02/housing-weakness-temporary-or-enduring.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+CalculatedRisk+%28Calculated+Risk%29
13 Institutional Investor Sales http://www.realtytrac.com/content/foreclosure-market-report
14-17 First Time Homebuyers http://www.realtor.org/ - NAR’s 2013 Profile of Home Buyers & Sellers
18, 20 30 Year Fixed Mortgage Rates http://www.freddiemac.com/pmms
19 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
22 Buying is Cheaper http://trends.truliablog.com/category/rent-vs-buy-index/
23 Increasing Cost of Renting http://www.census.gov/housing/hvs/data/histtabs.html
ResourcesSlide Slide Title Link
25, 26 Millennials: Unemployment & Incomehttp://www.pewsocialtrends.org/2014/02/11/the-rising-cost-of-not-going-to-college/ http://www.bls.gov/
27 Project on Student Debt http://projectonstudentdebt.org/
28Median Household Income of Millennials Living at Home
http://www.pewsocialtrends.org/2014/02/11/the-rising-cost-of-not-going-to-college/6/#appendix-c-young-adult-living-arrangements-and-household-incomes
29 Millennials Belief in Real Estate & It’s Agents https://www.prudentialrealestate.com/Portals/0/Documents/Prudential%20Q4%20Consumer%20Outlook%20Infographic.jpg
30 Methods Used to Downloadhttp://www.mediabistro.com/alltwitter/files/2012/08/email-vs-social-media-marketing.jpeg
32, 33 Year-Over-Year Price Changes Regional & State www.fhfa.gov
35, 36, 37
Avg. Annual % Appreciation, Projected % Appreciation, Cumulative Appreciation
https://www.pulsenomics.com/Q4_2013_HPE_Survey.php
39 Year-over-Year Change in Price http://www.spindices.com/index-family/real-estate/sp-case-shiller
40 Return on Investmenthttp://www.spindices.com/index-family/real-estate/sp-case-shiller http://money.msn.com/
41 Case-Shiller Home Price Indexhttps://www.spice-indices.com/idpfiles/spice-assets/resources/public/documents/79678_cshomeprice-release-0225.pdf
48, 51 The Power of Using Visuals http://www.macrovu.com/VTVCInterEffectiveness.html
49, 50 The Power of Using Visuals https://www.osha.gov/doc/outreachtraining/htmlfiles/traintec.html
The Power of Using Visuals
Percentage Making a Decision Immediately after Presentation
Percentage Increase Seeing Presenter as More Convincing
64% 34%
24%MacroVU
Visual Learning
Compared IdenticalPresentations
With and Without Visuals
Amount of Time the Presentation was Reduced By
The Power of Using Visuals
83%
11%3.5% 1.5% 1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Visual Sound Smell Touch Taste
Studies by EducationalResearchers Suggest that
Human Learning Occurs by Approximately
these Percentages
OSHA
The Power of Using Visuals
10%
35%
65%
0%
10%
20%
30%
40%
50%
60%
70%
Oral Presentation Visual Presentation Oral & Visual Presentation
Studies suggest that three days after a presentation, people retain these percentages of what they heard
OSHA
MacroVU Visual Learning
The Power of Using VisualsPresenters using visuals were perceived as more effective. People said such things as…
MoreInteresting
MoreConcise
MoreProfessional More
Credible
BetterPrepared