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8/3/2019 CAR 2011 Market Forecast
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Overview
US and California Economies
California Housing Market
Regional & Local Markets
2011 Annual Market Survey2012 Housing Market Forecast
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U.S. Economic Outlook
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SovereignDebtCrisis inEuroZone
Oil Price Spikes
2011: A Year of Wild Cards
Arab Uprising
PoliticalChangeonCapitolHill
Debt LimitCeiling &Downgradeof US Debt
StockMarketVolatility
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Gross Domestic Product: Stall Speed
2010: 2.8%; 2011 Q1: 0.4% Q2: 1.0%ANNUAL PERCENT CHANGE, CHAIN-TYPE (2005) $
-8%
-7%
-6%
-5%
-4%-3%
-2%
-1%
0%
1%
2%
3%4%
5%
6%
7%
8%
2
000
2
002
2
004
2
006
2
008
2
010
Q2
-10
Q4
-10
Q2
-11
ANNUAL QTRLY
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SOURCE: US Dept of Commerce, Bureau of Economic Analysis
Components of GDP:Consumer Spending Weak; Govt Sector Down
Quarterly Percent Change
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Consumption Fixed Nonres.
Investment
Net Exports Government
Q3 2010
Q4 2010
Q1 2011
Q2 2011
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QUARTERLY PERCENT CHANGE
Consumers Pulling BackHome Equity & Reverse Wealth Effect
Consumer Spending 2011 Q1: 2.7% Q2: 0.4%
SOURCE: US Dept of Commerce, Bureau of Economic Analysis
-4%
-2%
0%
2%
4%
6%
8%
1Q-2000
1Q-2001
1Q-2002
1Q-2003
1Q-2004
1Q-2005
1Q-2006
1Q-2007
1Q-2008
1Q-2009
1Q-2010
1Q-2011
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Unemployment Stubbornly HighAugust 2011
SOURCE: CA Employment Development Division
0%
2%
4%
6%
8%
10%
12%
14%
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
CA US
California (12.1%) vs. United States (9.1%)
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U.S. Job Growth: Flat in August
SOURCE: US Dept of Labor, Bureau of Labor Statistics
Month-to-MonthChanges
Recession Job Losses: 8.4 million
Since Jan10: +1.8 million
-900,000
-800,000
-700,000-600,000
-500,000
-400,000
-300,000
-200,000
-100,000
0
100,000
200,000
300,000
400,000
500,000
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
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California Job Growth Faltering
SOURCE: CA Employment Development Division
Month-to-Month ChangesRecession Job Losses: 1.3 million
Since Jan10: +188,100
-160000
-140000
-120000
-100000
-80000
-60000
-40000
-20000
0
20000
40000
60000
80000
100000
Jan-08
Mar-08
May-08
Jul-08
Sep-08
Nov-08
Jan-09
Mar-09
May-09
Jul-09
Sep-09
Nov-09
Jan-10
Mar-10
May-10
Jul-10
Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-11
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Where are Californias Jobs?
Employment Trends:Construction & Financial Sectors Biggest Losers
SOURCE: California Association of REALTORS
Industry 2005 Jul-11Year to
Date
Mining and Logging 23,600 27,600 4,000
Construction 905,300 567,300 -338,000
Manufacturing 1,502,600 1,257,600 -245,000Trade, Transportation & Utilities 2,822,100 2,641,500 -180,600
Information 473,600 455,400 -18,200
Financial Activities 920,300 755,800 -164,500
Professional & Business Services 2,160,700 2,136,200 -24,500
Educational & Health Services 1,593,400 1,837,000 243,600
Leisure & Hospitality 1,475,200 1,531,600 56,400
Other Services 505,500 484,500 -21,000
Government 2,420,200 2,380,200 -40,000
TOTAL 14,802,500 14,074,700 -727,800
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Nonfarm EmploymentSacramento-Arden Arcade-Roseville MSA, August 2011: Up 0.3% YTY
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
Jan-91
Jan-92
Jan-93
Jan-94
Jan-95
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
SOURCE: CA Employment Development Division
Y-T-Y PERCENT CHANGE
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Unemployment Rate
2%
4%
6%
8%
10%
12%
14%
Jan-90
Jan-91
Jan-92
Jan-93
Jan-94
Jan-95
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Sacramento Metropolitan Area, August 2011 11.9%
SOURCE: CA Employment Development Division
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New Housing PermitsSacramento MSA August 2011: 255 Units, Down 12.7% YTD
0
500
1000
1500
2000
2500
3000
Jan-88
Jan-89
Jan-90
Jan-91
Jan-92
Jan-93
Jan-94
Jan-95
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Single Family Multi-Family
SOURCE: Construction Industry Research Board
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Unemployment RateSacramento County August 2011
SOURCE: CA Employment Development Department
CCD Census County DivisionCDP Census Designated Place
Area Name Labor Force Rate
Arden Arcade CDP 55,800 12.3%
Carmichael CDP 28,800 9.6%
Citrus Heights city 49,500 8.7%
Elk Grove CDP 34,700 10.1%
Fair Oaks CDP 16,800 6.7%
Florin CDP 12,700 19.1%Folsom city 26,500 5.7%
Foothill Farms CDP 9,600 16.8%
Galt city 10,800 19.8%
Gold River CDP 4,700 2.4%
Isleton city 400 16.2%
La Riviera CDP 6,800 7.4%Laguna CDP 20,100 6.8%
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Unemployment RateSacramento County August 2011
SOURCE: CA Employment Development Department
CCD Census County DivisionCDP Census Designated Place
Area Name Labor Force Rate
Laguna West Lakeside CD 5,200 8.9%
North Highlands CDP 22,500 19.0%
Orangevale CDP 15,600 8.5%
Parkway South Sacramento 16,000 21.4%
Rancho Cordova City 30,600 14.1%
Rancho Murieta CDP 2,200 4.1%Rio Linda CDP 5,800 19.2%
Rosemont CDP 13,700 10.4%
Sacramento city 213,600 14.4%
Vineyard CDP 5,800 6.4%
Walnut Grove CDP 500 29.3%
Wilton CDP 2,700 8.5%Sacramento County 671,200 12.4%
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INDEX, 100=1985
Consumer Confidence SlippingMarginal Gains in September
September 2011: 45.4
20
40
60
80
100
120
140
160
Jan-00
Jul-00
Jan-01
Jul-01
Jan-02
Jul-02
Jan-03
Jul-03
Jan-04
Jul-04
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
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Source: National Federation of Independent Business
Crisis of Confidence:Small Business Optimism Down
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Consumer Prices Low but Heading Higher
CPI August 2011: All Items +3.8% YTY; Core +2.0% YTY
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
All Items
Core
PERCENT CHANGE FROM A YEAR AGO, 100=1982-1984
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Monetary Policy
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0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
2009.01
2009.04
2009.07
2009.10
2010.01
2010.04
2010.07
2010.10
2011.01
2011.04
2011.07
8.4.11
8.25.11
9.15.11
FRM ARM
MONTHLY WEEKLY
Mortgage Rates @ Historical LowsDebt Down Grade Ignited Flight to Quality
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SOURCE: Federal Home Loan Mortgage Corporation
Classic Liquidity Trap: Consumers DeleveragingLow Rates and Low Borrowing
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
FRM
ARM
Federal Funds
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Fiscal Policy
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US Deficit Highest in Decades2010: 11% of GDP (Revenues Expenses)
-12.0%
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
Deficit as a % of GDP
Source: US Treasury, BEA, compiled by C.A.R.
Note: Positive = Surplus
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US Debt Jumped as GovernmentResponded to Financial Crisis
2010: 93% of GDP
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%60.0%
70.0%
80.0%
90.0%
100.0%
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
Debt as a % of GDP
Source: US Treasury, compiled by C.A.R.
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Obama Jobs Proposal
What:$450 Billion stimulus: Tax cuts ($250B) and infrastructure
spending ($200B)
Why:
Economy is stalled/Avoid double-dip
Zero job growth in August/high unemployment
Stabilize confidence: consumer, business, investor
How:
Increase taxes on the richEntitlement Reform
Tax Reform
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Housing
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SOURCE: California Association of REALTORS
California vs. U.S. Sales
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
US Home Sales CA Home Sales
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SOURCE: California Association of REALTORS
California vs. U.S. Median Price
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
US Median Price CA Median Price
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Housing Affordability: Records Highs
California Vs. U.S.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q12000
Q32000
Q12001
Q32001
Q12002
Q32002
Q12003
Q32003
Q12004
Q32004
Q12005
Q32005
Q12006
Q32006
Q12007
Q32007
Q12008
Q32008
Q12009
Q32009
Q12010
Q32010
Q12011
CA US
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS
% OF HOUSEHOLDS THAT CAN BUY
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CA Underwater Mortgages
SOURCE: CoreLogic
30.2%
4.6%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Q4-2009
Q1-2010
Q2-2010
Q3-2010
Q4-2010
Q1-2011
Q2-2011
Negative Equity Share in CA Near Negative Equity Share in CA
M O i i i 1990 2010
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0
100
200
300
400
500
600
700
800
900
Q1/90
Q1/91
Q1/92
Q1/93
Q1/94
Q1/95
Q1/96
Q1/97
Q1/98
Q1/99
Q1/00
Q1/01
Q1/02
Q1/03
Q1/04
Q1/05
Q1/06
Q1/07
Q1/08
Q1/09
Q1/10
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%Refinance Originations (Bil $)Purchase Originations (Bil $)Fixed Rate Mortgage
ORIGINATION (BIL $) 30-YR FIXED RATE MORTGAGE
Mortgage Originations: 1990-2010
Source: Mortgage Bankers Association of America
Refinance vs. Purchase
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What Happened?
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1872 W. Admiral, 92801
3 bd, 2.5 ba, built in 1982Purchased in Sept 2005for $594,000 with 30%down.In April 2006, added asecond for $57,000.In Oct 2006, refinancedthe second into a newsecond for $100,000.Defaulted in 2010Zestimate of current value= $364,000.
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1572 W. Orangewood, 92802
3 bd, 2 ba, 2,016 sq ftbuilt in 1977.Purchased in June 2003for $455,000 with 30%down.March 2004: added asecond for $75,000;added a third for $90,500;added a fourth for$80,000.Within one year ofpurchase, the property had$565,000 in debt on it!Defaulted in 2010.Zestimate of current value= $442,000.
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8871 Regal, 92804
3 bd, 2 ba, 1,314 sq ftbuilt in 1956.Purchased as REO in2007 for $417,000 withzero down.Had previously sold for$568,000 in 2005.Defaulted in 2010.Zestimate of currentvalue = $367,500.
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2414 E. Underhill, 92806
3 bd, 2 ba, 1,459 sq ftbuilt in 1957.Purchased for $640,000in July 2006 withpiggyback financing:$500,000 first and$140,000 second, i.e.zero down.Defaulted in 2010.Zestimate of currentvalue = $387,000.
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Conclusions
Excessive borrowing against home equity is theuntold part of the foreclosure story. House Prices, Home Equity-Based Borrowing, and
the U.S. Household Leverage Crisis by Mian andSufi: American Economic Review : 39% of new defaults from 2006 to 2008 attributable to home equity borrowing
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Understanding theFinancial Crisis
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Federal Issues Critical Concerns
High-cost Loan Limit - expires 10/1/11
Future of Fannie and Freddie in flux - Increase
guarantee fee likelyFHA targeted for market share drop
Tax Reform on the horizon MID?
QRM (Qualified Residential Mortgage)
20% Down Is the future of the 30 year
mortgage in doubt?
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U.S. Economic Outlook
2005 2006 2007 2008 2009 2010 2011f 2012f
US GDP 3.1% 2.7% 2.0% 0.0% -2.6% 2.9% 1.7% 2.0%
Nonfarm Job
Growth 1.7% 1.8% 1.1% -0.6% -4.4% -0.7% 1.0% 0.9%
Unemployment 5.1% 4.6% 4.6% 5.8% 9.3% 9.6% 9.0% 8.9%
CPI 3.4% 3.2% 2.8% 3.8% -0.4% 1.6% 3.2% 2.3%
Real Disposable
Income, %
Change
1.3% 4.0% 2.2% 0.5% 0.9% 1.4% 1.7% 1.5%
SOURCE: California Association of REALTORS
Forecast Date: September 2011
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California Economic Outlook
2005 2006 2007 2008 2009 2010 2011f 2012f
Nonfarm Job
Growth1.8% 1.7% 0.8% -1.3% -6.0% -1.4% 1.5% 2.1%
Unemployment
Rate 5.4% 4.9% 5.4% 7.2% 11.4% 12.4% 12.0% 11.2%
Population
Growth1.2% 1.1% 1.1% 1.2% 1.1% 0.9% 0.9% 0.9%
Real Disposable
Income, %Change
1.3% 3.4% 1.5% 0.1% -2.2% 1.6% 1.5% 2.0%
SOURCE: California Association of REALTORS
Forecast Date: September 2011
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California Housing Market
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California Sales of Existing Homesand Median Price
Housing Cycle Comparisons 1970- 2011UNITS/MEDIAN PRICE $
SOURCE: California Association of REALTORS
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
Sales of Existing Detached Homes Median Price
-61% -25%
-44%
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Dollar Volume of SalesDown 5% in 2011, Up 3% in 2012
$129
$327
$150 $143 $147
26%
16%
-19%
-27%
-22%
-2% -1.0%-5%
3%
24%
37%
2%
$0
$50
$100
$150
$200
$250
$300
$350
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
$ Volume of Sales Percent Change % Change$ in Billion
SOURCE: California Association of REALTORS
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Sales of Existing Detached Homes andPacific West Consumer Confidence
California, August 2011 Sales: 497,390 Units, Down 0.4% YTD, Up 10.2% YTY
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
Jan-00
Jul-00
Jan-01
Jul-01
Jan-02
Jul-02
Jan-03
Jul-03
Jan-04
Jul-04
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
0
20
40
60
80
100
120
140
160
Sales Consumer Confidence INDEXUNITS
SOURCE: California Association of REALTORS; The Conference Board*Sales are seasonally adjusted and annualized
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Median Price of ExistingDetached Homes
P: May-07
$594,530
T: Feb-09
$245,230
-59% frompeak
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
California, August 2011: $297,060, Down 7.4% YTY
SOURCE: California Association of REALTORS
U ld I t I d
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Unsold Inventory Index
California, August 2011: 5.0 Months
0
2
4
6
8
10
12
14
16
18
20
Jan-88
Jan-89
Jan-90
Jan-91
Jan-92
Jan-93
Jan-94
Jan-95
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS
MONTHS
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Price Range (Thousand) Aug-10 Jul-11 Aug-11
$1,000K+ 11.1 9.2 9.1
$750-1000K 7.0 6.9 6.2
$500-750K 6.4 6.3 5.6
$300-500K 5.7 5.6 5.2
$0-300K 4.8 5.1 4.6
Unsold Inventory Index (Months)
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS
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Unsold Inventory By Price Range
Jan 2005 August 2011
0
5
10
15
20
25
30
Jan-05
Apr-05
Jul-05
Oct-05
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
$0 - 300K
$300-500K
$500-750K
$750-1000K
$1,000K+-
All
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS
MONTHS
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Market Breakdown:
Equity v. DistressedSales
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SOURCE: California Association of REALTORS
24.7%
19.3%
44.5%
25.2%
17.5%
42.9%
24.4%
18.9%
43.7%
0%
20%
40%
60%
REOs Short Sales Distressed Sales
Aug-10 Jul-11 Aug-11
Share of Distressed Sales to Total Sales
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Tight Supply of Inventoryfor REO Sales
0
12
3
4
5
67
8
9
Equity Sales REO Sales Short Sales
5.7
2.6
8.1
Aug-11UnsoldInventory Index(Months)
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SOURCE: California Association of REALTORS
REO & Short Sales: Central Valley(Percent of Total Sales)
0%
20%
40%
60%
80%
100%
MaderaMerced
San BenitoSacramento
Kern
67%
36%37%
38% 41%
7%
23% 30%24% 19%
Aug 2011
Short Sales
REO Sales
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SOURCE: California Association of REALTORS
REO & Short Sales: SouthernCalifornia(Percent of Total Sales)
0%
20%
40%
60%
80%
100%
LosAngeles Orange Riverside
SanBernardino San Diego
20%
12%35% 49%
19%
24%
20%
26% 14%
8%
Aug 2011
Short Sales
REO Sales
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SOURCE: California Association of REALTORS
REO & Short Sales: Rest of California(Percent of Total Sales)
0%
20%
40%
60%
80%
100%
48%
34%25%
57%
36%32%
15%
39% 51%
11%
8%
7%
7%
25%
13%
20%
9%5%
Aug 2011
Short Sales
REOs
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60/118
8/3/2019 CAR 2011 Market Forecast
61/118
8/3/2019 CAR 2011 Market Forecast
62/118
REO: -12.2% YTD 3rd
Party: -4.1% YTD Cancel: -19.7% YTD
0
5,000
10,000
15,000
20,000
25,000
30,000
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
REOs Sold to 3rd Party Cancellations
SOURCE: ForeclosureRadar.com
6 Month Average:
REO: 10,8803rd Party: 3,616
Cancelled: 14,447
CA Foreclosure OutcomesAugust 2011
CA Foreclosure Inventories
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63/118
CA Foreclosure InventoriesAugust 2011
Preforeclosure: -17.5% YTD Schedule for Sale: -17.8% YTD
Bank Owned: 7.0% YTD
0
50,000
100,000
150,000
200,000
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Preforeclosure Scheduled for Sale Bank Owned
SOURCE: ForeclosureRadar.com
6 Month Average:
Preforeclosure: 115,742Schedule for Sale:
105,138
Bank Owned: 108,635
Sacramento
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64/118
Preforeclosure: 2,667 Auction: 1,792 Bank Owned: 1,281
Source: ForeclosureRadar.com as of 10/03/11
Sacramento
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65/118
Preforeclosure: 2,667 Auction: 1,792 Bank Owned: 1,281
Source: ForeclosureRadar.com as of 10/03/11
Sacramento
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66/118
Preforeclosure: 2,667 Auction: 1,792 Bank Owned: 1,281
Source: ForeclosureRadar.com as of 10/03/11
Sacramento
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Preforeclosure: 2,667 Auction: 1,792 Bank Owned: 1,281
Source: ForeclosureRadar.com as of 10/03/11
RosevilleP f l A i B k O d
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68/118
Preforeclosure: 394 Auction: 322 Bank Owned: 162
Source: ForeclosureRadar.com as of 10/03/11
Citrus HeightsP f l 324 A i 208 B k O d 149
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69/118
Preforeclosure: 324 Auction: 208 Bank Owned: 149
Source: ForeclosureRadar.com as of 10/03/11
OrangevaleP f l 112 A ti 94 B k O d 67
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70/118
Preforeclosure: 112 Auction: 94 Bank Owned: 67
Source: ForeclosureRadar.com as of 10/03/11
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71/118
Regional Housing
Markets
Homes Sales and Consumer Confidence
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72/118
Sacramento County, August 2011: 1,707 Units, Up 5.4% YTD, Up 14.3% YTY
0
200400
600
800
1000
1200
1400
1600
1800
2000
2200
24002600
Jan-91
Jan-92
Jan-93
Jan-94
Jan-95
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
0
20
40
60
80
100
120
140
160
Sales Consumer ConfidenceINDEXUNITS
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS; The Conference BoardHome sales: Existing Single Family Detached
Sales of Existing Detached HomesS C 2010 17 420 U i D 12 8%
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73/118
Sacramento County, 2010: 17,420 Units, Down 12.8%YTY
UNITS
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS
0
5,000
10,000
15,000
20,000
25,000
1989
1992
1995
1998
2001
2004
2007
2010 0
500
1,000
1,500
2,000
2,500
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
2008
2009
2010
2011
ANNUAL MONTHLY
Median Price of Existing Detached Homes
8/3/2019 CAR 2011 Market Forecast
74/118
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
Jan-89
Jan-90
Jan-91
Jan-92
Jan-93
Jan-94
Jan-95
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Sacramento County, August 2011: $167,040, Down 10.6% YTY
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS
Median Price Annual Comparison
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75/118
Sacramento County, 2010: $184,170, Up 2.0% YTY
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS
$-
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
1989
1992
1995
1998
2001
2004
2007
2010
$-
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
2008
2009
2010
2011
ANNUAL MONTHLY
Median Home Sales PriceS t C t
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76/118
Sacramento County
SOURCE: DataQuick Information Systems. The price statistics are derived fromall types of home sales -- new and existing, condos and single-family.
Aug-10 Aug-11Yearly %
Change
ANTELOPE $176,500 $160,000 -9.4%
CARMICHAEL $240,000 $187,100 -22.0%
CITRUS HEIGHTS $165,000 $138,000 -16.4%ELK GROVE $230,000 $211,500 -8.0%
ELVERTA $111,000 $131,000 18.0%
FAIR OAKS $260,000 $219,000 -15.8%
FOLSOM $330,000 $284,000 -13.9%
GALT $155,000 $135,250 -12.7%
Median Home Sales PriceS t C t
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77/118
Sacramento County
SOURCE: DataQuick Information Systems. The price statistics are derived fromall types of home sales -- new and existing, condos and single-family.
Aug-10 Aug-11 Yearly %Change
MATHER $182,500 $160,500 -12.1%
NORTH HIGHLANDS $90,000 $80,000 -11.1%
ORANGEVALE $206,500 $177,000 -14.3%
RANCHO CORDOVA $211,250 $195,000 -7.7%
RIO LINDA $151,000 $114,000 -24.5%
SACRAMENTO $139,000 $131,500 -5.4%
SLOUGHHOUSE $214,000 $340,000 58.9%
WILTON $444,500 $330,000 -25.8%
SACRAMENTO COUNTY $172,000 $159,000 -7.6%
Unsold Inventory IndexS t C t A t 2011 2 3 M th
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78/118
Sacramento County, August 2011: 2.3 Months
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
Jan-93
Jan-94
Jan-95
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
MONTHS
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS
Median Time on the MarketSacramento A g st 2011 38 6 Da s
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Sacramento, August 2011: 38.6 Days
0
10
20
30
40
50
60
70
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS
Asking Rents for Class A&B ApartmentsSacramento MSA 2011 Q2: $952 Up 2 6% YTY
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80/118
Sacramento MSA, 2011 Q2: $952, Up 2.6% YTY
$0
$200
$400
$600
$800
$1,000
Q3/97
Q2/98
Q1/99
Q4/99
Q3/00
Q2/01
Q1/02
Q4/02
Q3/03
Q2/04
Q1/05
Q4/05
Q3/06
Q2/07
Q1/08
Q4/08
Q3/09
Q2/10
Q1/11
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS;
REALFACTS
Vacancy Rates for Class A&B ApartmentsSacramento MSA 2011 Q2: 6 4%
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81/118
Sacramento MSA, 2011 Q2: 6.4%
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS; REALFACTS
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
1990
1992
1994
Q4/95
Q4/96
Q3/97
Q1/98
Q3/98
Q1/99
Q3/99
Q1/00
Q3/00
Q1/01
Q3/01
Q1/02
Q3/02
Q1/03
Q3/03
Q1/04
Q3/04
Q1/05
Q3/05
Q1/06
Q3/06
Q1/07
Q3/07
Q1/08
Q3/08
Q1/09
Q3/09
Q1/10
Q3/10
Q1/11
VACANCY RATE
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82/118
Sacramento
Sales of Single Family Homes
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83/118
g ySacramento, August 2011: 620 Units
, Up 20.6% MTM, Up 15.9% YTY
SOURCE: SACRAMENTO ASSOCIATION of REALTORS
0
100
200
300
400
500
600
700
Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11
Median Price of SF Homes
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84/118
Sacramento, August 2011: $131,000
Down 3.0% MTM, Down 5.8% YTY
$0
$50,000
$100,000
$150,000
$200,000
Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11
SOURCE: SACRAMENTO ASSOCIATION of REALTORS
8/3/2019 CAR 2011 Market Forecast
85/118
Roseville
Sales of Single Family Homes
8/3/2019 CAR 2011 Market Forecast
86/118
g yRoseville, August 2011: 231 Units
, Up 40.9% MTM, Up 33.5% YTY
0
50
100
150
200
250
Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11
SOURCE: SACRAMENTO ASSOCIATION of REALTORS
Median Price of SF Homes
8/3/2019 CAR 2011 Market Forecast
87/118
Roseville, August 2011: $251,000
Up 3.8% MTM, Down 6.0% YTY
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11
SOURCE: SACRAMENTO ASSOCIATION of REALTORS
8/3/2019 CAR 2011 Market Forecast
88/118
Citrus Heights
Sales of Single Family Homes
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89/118
Citrus Heights, August 2011: 102 Units
Down 3.8% MTM, Up 13.3% YTY
0
20
40
60
80
100
120
140
Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11
SOURCE: SACRAMENTO ASSOCIATION of REALTORS
Median Price of SF Homes
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90/118
Citrus Heights, August 2011: $140,050
Up 3.7% MTM, Down 16.7% YTY
$0
$50,000
$100,000
$150,000
$200,000
Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11
SOURCE: SACRAMENTO ASSOCIATION of REALTORS
8/3/2019 CAR 2011 Market Forecast
91/118
Orangevale
Sales of Single Family Homes
8/3/2019 CAR 2011 Market Forecast
92/118
Orangevale, August 2011: 43 Units,
Up 19.4% MTM, Up 7.5% YTY
0
10
20
30
40
50
60
Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11
SOURCE: SACRAMENTO ASSOCIATION of REALTORS
Median Price of SF Homes
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93/118
Orangevale, August 2011: $179,000,
Up 3.8% MTM, Down 13.3% YTY
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11
SOURCE: SACRAMENTO ASSOCIATION of REALTORS
8/3/2019 CAR 2011 Market Forecast
94/118
2011 Annual Housing
Market Survey
2 in 5 Homes Sold Were
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95/118
20% 20%
59%
0%
20%
40%
60%
REOs Short Sales Equity Sales
2008 2009 2010 2011
Q. Was the property purchased/sold as a
foreclosure, REO, short sale, or none of the above?
Distressed Properties
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96/118
Equity vs. REO vs. Short Sales
Equity Sales REO Sales Short SalesShare of Total Sales 58.7% 19.7% 20.2%
Median Home Price $431,000 $240,000 $287,000
Square Footage 1,783 1,500 1,600
Price / SF $250 $112 $175
Sales-to-List Price Ratio 95.9% 98.0% 95.9%
% of Sales With Multiple Offers 35.2% 58.3% 57.5%
Avg. Number of Offers 3.0 3.0 3.6
% of All Cash Sales 25.5% 34.0% 23.3%
Days on MLS 67 50 141
Days in Escrow 35 35 45
1 in 3 Sellers Sold Because They
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97/118
1 in 3 Sellers Sold Because TheyWere in Distress
0%
5%
10%
15%
20%
25%
30%
35%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
30%Sold due to foreclosure/Short sale/Default
Q. What was the single most important reason for
selling/buying the property?
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Sellers with a Net Cash Loss
21.8%
0%
5%
10%
15%20%
25%
30%
35%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Q. What was the net cash gain or net loss to
the seller as a result of this sale?
Long Run Average = 11.2%
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99/118
Median Price Discount &
8/3/2019 CAR 2011 Market Forecast
100/118
0%
1%
2%
3%
4%5%
6%
7%
8%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
0
2
4
6
810
12
14
16Med. Price DiscountMed. Weeks on MLS
Q. What was the original list sales price of the property? What was the final sales price of the property?
How many weeks did the property remain on the MLS?
3.9%, 10.5 weeks
Weeks On Market
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101/118
Multiple Offers
0%
10%
20%
30%
40%
50%
60%
2000 2002 2004 2006 2008 2010
0
1
2
3
4
5
6
%with Mult ip le Offers # of Mult ip le offers (Average)
8/3/2019 CAR 2011 Market Forecast
102/118
Proportion of Sellers Planning toRepurchase
0%
10%
20%
30%
40%
50%
60%
70%
80%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Q. Is the seller planning on purchasing another home?
Reasons Sellers Not Planning to
8/3/2019 CAR 2011 Market Forecast
103/118
gBuy Another Home
Q. Why is the seller not planning to purchase another home?
40.0%
2.7%
4.7%
4.9%
5.7%
10.9%
11.4%
19.8%
0% 10% 20% 30% 40% 50%
Seller is a lender/bank
Seller prefers to have less financial obligation
Poor credit background
Lack of cash for down payment
Out of work/unemployment
Decide to live with family/friends
Waiting for market to bottom
Other
Reasons For Selling
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104/118
All Home Sellers
0% 5% 10% 15% 20% 25% 30% 35%
Foreclosure/Short
Sale/Default
Change in Family Status
Retirement/Move to
Retirement Community
Investment/ TaxConsderations
Desired Better Location
Desired Smaller Home
Changed Jobs
Desired Larger Home
Other
Q. What was the single most important reason for selling/buying the property?
C h S l th Ri
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105/118
Cash Sales on the Rise
0%
5%
10%
15%20%
25%
30%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
% of All Sales
I t t & S d/
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106/118
Investments & Second/Vacation Homes
0%
5%
10%
15%
20%
25%
17%
7%
Investment/Rental Property Vacation/Second Home
F i B
8/3/2019 CAR 2011 Market Forecast
107/118
Foreign Buyers
8%
5%
6%6%
0%
2%
4%
6%
8%
10%
2008 2009 2010 2011
% of Foreign Buyers
Q. Was the buyer a foreign buyer?
Years Owned Home Before Selling
8/3/2019 CAR 2011 Market Forecast
108/118
7.06.0
0
2
4
6
8
10
12
14
All Sellers Second Home and Investment Home Sellers
Years Owned Home Before Selling
(All Sellers and Second Home/Investment Home Sellers
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109/118
California Housing
Market Forecast
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110/118
Forecast Progress Report
2010
Projected
October
2010
2010 Actual
2011
Forecast
October
2010
2011
Projected
SFH Resales(000s)
492.0 491.5 502.0 491.1
% Change -10.0% -10.1% 2.0% -0.1%
Median Price
($000s)$306.5 $303.1 $312.5 $291.0
% Change 11.5% 10.2% 2.0% -4.0%
Source: CALIFORNIA ASSOCIATION OF REALTORS
Forecast Date: September 2011 vs October 2010
C lif i H i M k t O tl k
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111/118
California Housing Market Outlook
2005 2006 2007 2008 2009 2010 2011f 2012f
SFH Resales
(000s)625.0 477.5 346.9 441.8 546.9 491.5 491.1 496.2
% Change 0.03% -23.6% -27.3% 27.3% 23.8% -10.1% -0.1% 1.0%
MedianPrice
($000s)$522.7 $556.4 $560.3 $348.5 $275.0 $303.1 $291.0 $296.0
% Change 16.0% 6.5% 0.7% -37.8% -21.1% 10.2% -4.0% 1.7%
30-Yr FRM 5.9% 6.4% 6.3% 6.0% 5.1% 4.7% 4.5% 4.7%
1-Yr ARM 4.5% 5.5% 5.6% 5.2% 4.7% 3.5% 3.0% 3.1%
Source: CALIFORNIA ASSOCIATION OF REALTORS
Forecast Date: September 2011
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112/118
Closing Thoughts
Direction of Home Prices: Sellers
8/3/2019 CAR 2011 Market Forecast
113/118
Direction of Home Prices: SellersSkeptical; Buyers Hopeful
0%
20%
40%
60%
80%
100%
Sellers Buyers
Down Flat Unsure Up
Q: Do you think home prices in your neighborhood will go up, down or stay flat in one year, five years and 10 years?
Real Estate: Its Time To Buy Again
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Real Estate: It s Time To Buy Again
SOURCE: Real estate: Its time to buy again Fortune Magazines 3/28/11 article written by Shawn Tully
Forget stocks. Don't bet on gold.After four years of plunging home
prices, the most attractive assetclass in America is housing.
8 in 10 Americans Agree Buying a Home is
8/3/2019 CAR 2011 Market Forecast
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g y gthe Best Investment One Can Make
SOURCE: Pew Research Centers Home Sweet Home. Still. Five Years After the Bubble Burst
8 in 10 Renters Would Like toB i h F
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116/118
Buy in the Future
renters are hardly
immune to the allure of
homeownership, even in
the face of the five-year
decline in prices. Asked if
they rent out of choice orbecause they cannot
afford to buy a home, just
24% say they
rent out ofchoice.
SOURCE: Pew Research Centers Home Sweet Home. Still. Five Years After the Bubble Burst
C.A.R. Strategic Planning Book Pics
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Thank You
www.car.org.marketdata
lesliea@car.org
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