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

Months 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
50

January 1, 2000 March 1, 2012

36.7

30

18.4
10

-10

-1

-30

-24.4

-50

Dow

S&P

NASDAQ

Real Estate
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 2012while 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%.
Moodys Analytics

Moodys 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?

Its a way, in effect, to short the dollar because you can take a 30-year mortgage and if it turns out your interest rates too high, next week you refinance lower. And if it turns out its too low, the other guys stuck with it for 30 years. So its 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 Id finance it with a 30-year mortgage Its 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 its a leveraged way of owning a very cheap asset now and I think thats 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

3.75

1/01/2011

Today
Federal Reserve

The Move-Up Buyer

Comparison Today Current Home Move-up Home

2006 Price

$500,000

$750,000

Current Price (-20%)

Loss/Savings Net Gain for move-up buyer

$400,000
$100,000

$600,000
$150,000

$50,000

The Move-Up Buyer

Comparison 5 Years Later Current Home Move-up Home

Current Price Future Price (+20%) Future Gain Future difference

$400,000 $480,000 $80,000

$600,000 $720,000 $120,000 $40,000

Current Gain
Total Gain

$50,000
$90,000

The Move-Up Buyer

Price

Rate
4.40
6.00

P&I
3,044.57
4,316.76

TODAY
2016

600,000
720,000

Monthly Savings 1,272.19

Home Rents Will Keep Rising

Paying rent is getting more painful for renters across the country in the face of rising demand and tight supply
$1, 200 $1, 175 $1, 150 $1, 125

$1, 100

$1, 075

$1, 050

$1, 025

$1, 000

2009

2010

2011

2012*

2013*

2014*

Its 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

Housing Cost Over Next 30 Years*

$900K

Rent

$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

Retirement Fund Created from Homeowner Equity After 30 Years*

$400K

Rent

$0
Owners Renters
* Assuming $300,000 current value with a 1% annual appreciation rate for residential property.

Forbes.com 10/13/2011

Resources
Slide Slide Title Existing Home Sales, Pending Home Sales, Monthly Inventory of Homes for Sales Return on Investment Projections for 2012 Projections for 2012 Projections for 2012 Projections for 2012 Warren Buffet Speaks Out Warren Buffet Speaks Out Mortgage Rates Link 2,3,4 http://www.realtor.org

5 6 7 8 9 10 11 12

www.msnmoney.com http://www.ihs.com/products/Global-Insight/industry-economic-report.aspx?ID=1065932304 http://www.housingwire.com/article/monday-morning-cup-coffee-more-good-housing-news-tap http://freddiemac.mediaroom.com/index.php?s=12329&item=122345 http://www.economy.com http://www.cnbc.com/id/46541258 http://www.cnbc.com/id/46541258 http://www.freddiemac.com/pmms http://bottomline.msnbc.msn.com/_news/2012/02/06/10332224-office-and-home-rent-willkeep-rising-and-rising http://www.forbes.com/sites/investor/2011/10/12/buy-that-dream-house-now-or-wait-untilprices-fall-further http://www.housingviews.com/wp-content/uploads/2012/01/CSHomePrice_Release1.pdf

16

House Rents Will Keep Rising

Housing Cost Over Next 30 Years, Retirement Fund Created from Homeowner Equity After 30 Years S&P Case-Shiller Home Price Indices

17, 18

19

KEEPINGCURRENTMATTERS.COM

Resources
Slide 21 Slide Title Months Supply of Shadow Inventory Link http://ftalphaville.ft.com/blog/2012/02/17/881581/the-decline-of-us-housing-inventory http://www.realtor.org/wps/wcm/connect/0556a600491cbf9b813bcd2e39654e23/Shadow_I nventory_Annual_2011_for_website.pdf?MOD=AJPERES&CACHEID=0556a600491cbf9b813bcd 2e39654e23 www.housingviews.com/wp-content/uploads/2012/01/CSHomePrice_Release1.pdf http://www.realtytrac.com/content/foreclosure-market-report/january-2012-us-foreclosuremarket-report-7022 http://www.washingtonpost.com/business/source-holdout-states-to-sign-mortgagesettlement-with-banks-over-foreclosure-abuses/2012/02/08/gIQA7uIvzQ_story.html http://www.businessweek.com/news/2012-02-14/foreclosure-deal-to-spur-u-s-home-seizureshelp-heal-market.html http://www.economy.com/dismal http://www.corelogic.com/about-us/researchtrends/asset_upload_file693_14120.pdf http://www.realtor.org http://www.calculatedriskblog.com/2012/02/lawler-short-sales-increased.html http://www.realtytrac.com/content/foreclosure-market-report/q4-and-year-end-2011-usforeclosure-sales-report-7060 http://www.dsnews.com/articles/obama-proposes-extending-tax-waiver-on-mortgage-debtforgiveness-2012-02-15 22 Months Supply of Shadow Inventory

21

S&P Case-Shiller Home Price Indices

25

Impact of Settlement

26

Impact of Settlement

27

Impact of Settlement

28 30 33 34 35

Price Depreciation Foreclosures in Process by State Percentage of Distressed Property Sales Short Sale Surging Short Sale Surging

37

Mortgage Forgiveness Debt Relief Act

KEEPINGCURRENTMATTERS.COM