Mega Camp 2015 - Market Update_mykw

MEGA AGENT

2

Market UpdateGary Keller and Jay Papasan

© Keller Williams Realty, Inc.

The U.S. Housing Market

© 2015 Keller Williams Realty, Inc.

Housing Market Cycles

4 The U.S. Housing Market













Long Term Trend





Home sales have been strong this summer after starting slow early in the year. We are on pace to have the strongest year for existing home sales since the recession.

Home Sales - Monthly


Source: NAR

5.5

5.3

5.15.2

4.94.8

5.15

5.25.1

55.1

54.9

4.84.7

4.64.6

4.94.8

5.1

5.35.45.4

5.1

Seasonally Adjusted Annual Rate of Home Sales

2013 2014 2015

JuneJune

June

© 2015 Keller Williams Realty, Inc.11 The U.S. Housing Market

Home price appreciation has averaged 7% since 2011 and looks on track to be close to that this year if appreciation does not slow down. Prices should move back into the 4%–6% range in the near future, and higher interest rates will contribute to the return of slower appreciation.

Home Price - Annual

‘89 ‘91 ‘93 ‘95 ‘97 ‘99 ‘01 ‘03 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 '13 '14 '15 '16 '17 '18 '19 '20

Long-term Average = 4% Trend Line Reset = 4%Annual Median Home Price (in Thousands) Average Growth Since Recovery = 7%

$222

$179 $198

$95

Source: NAR

$166

$264

$317$313

$260

$223 est.


This year we have seen movement back toward a seller’s market, spurred by people trying to take advantage of low rates before they increase.

Months Supply of Inventory


Source: NAR

Jun '13 Sep Dec Mar Jun '14 Sep Dec Mar Jun '15

Inventory Balanced = 6 months

Buye

r’s M

ktSe

ller’s

Mkt

Bala

nced

55 5.15.5

4.4

6


Mortgage Rates - Monthly


Jan '11 Jul '11 Jan '12 Jul '12 Jan '13 Jul '13 Jan '14 Jul '14 Jan '15 Jul '15

Monthly Mortgage Rate

4.46%

3.67%

3.35%

4.05%

Source: Freddie Mac

Mortgage rates have been slowly rising since the beginning of the year as the Federal Reserve debates when to adjust their rates.

4.80%


U.S. Economy

© 2015 Keller Williams Realty, Inc.15 U.S. Economy

The economy got off to another slow start this year, but has begun to pick up again.

Source: BEA

Q1 '07 Q4 '07 Q3 '08 Q2 '09 Q1 ‘10 Q4 '10 Q3 '11 Q2 '12 Q1 '13 Q4 '13 Q3 '14 Q2 '15

2.3

0.6

2.1

4.34.6

-0.9

3.83

1.11.9

0.10.5

1.92.7

4.6

0.8

2.9

-1.5

2.52.7

3.9

1.7

3.9

1.3

-0.5

-5.4

-8.2

-1.9

2

-2.7

1.4

2.73.1

0.2

Real GDP Growth Rate, Quarterly, Seasonally Adjusted (Percentage)

GDP - Quarterly


Unemployment has moved back into the range of what can be considered normal.

Unemployment - Monthly

Jan '08 Jan '09 Jan '10 Jan '11 Jan '12 Jan '13 Jan '14 Jan '15 Jun '15

10%

5%5.7%

Source: BLS

5.3%


InflationInflation remains below the target rate and will be watched closely as the Federal Reserve considers rate increases.

'89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15

4.5%

4.8%

1.4%1.0%

CPI (Includes Energy and Food) Core CPI (Excludes Energy and Food) Target = 2%Source: BEA

1.73%2%

-.02%


Special Topics

© 2015 Keller Williams Realty, Inc.19 Special Topics

Affordability - NAR Affordability IndexAffordability has been declining since January as prices continue to outpace wage growth.

Source: NAR

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

154 156159

167 166170 168

181 179

172

166

160

153

2014 - 2015

Affordability Definition: A value of 100 means that a family earning the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that a family earning the median income has more than enough income.

© 2015 Keller Williams Realty, Inc.20 Special Topics

Based on inventories, we still need to see more construction.

New Home Construction

Historical '14 Jan Feb Mar Apr May Jun Jul

782693691719

623600706

648

1,082

New Homes (in Thousands)

CANADA


Housing Market

CANADA

© 2015 Keller Williams Realty, Inc.22

After a slowdown at the end of 2014, home sales have ticked up for most of 2015.

Home Sales - Monthly

Jul '13 Aug Sep Oct Nov DecJan '14 Feb Mar Apr May Jun Jul '14 Aug Sep Oct Nov DecJan '15 Feb Mar Apr May Jun Jul '15

Total Monthly Home Sales

39K36K

41K38K

43K

Canadian Housing Market

CANADA


Prices in Canada have continued to increase, with the largest gains concentrated in Toronto and Vancouver.

Home Price - Monthly

Jul '13 Sep Nov Jan '14 Mar May Jul Sep Nov Jan '15 Mar May Jul '15

Average Monthly Home Price (Canadian Dollars, in Thousands)

$387K $389K $399K$401K $438K


CANADA


Canadian inventory has remained in balanced territory throughout the year, but has been closer to a seller’s market than the previous year.

Inventory - Monthly

Jul '13Aug Sep Oct Nov DecJan '14Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecJan '15Feb Mar Apr May Jun Jul '15

Monthly Single Family Home Sales 40% 60%Source: CREA

60%

40%

54% 52% 53% 50%57%

Seller’sB

alancedB

uyer’s


CANADA

© 2015 Keller Williams Realty, Inc.25 Canadian Housing Market

‘89

‘91

‘93

‘95

‘97

‘99

‘01

‘03

‘05

‘07

‘09

‘11 '1

4

Jan '

14 MarMay Ju

lSe

pNov

Jan '

15 MarMay Ju

lAu

g

Average Annual Mortgage Rate (Percentage) '14 - '15 Actual Monthly Mortgage Rate (Percentage)

MonthlyYearly

4.6

9.2

13.4

5.34.9

7.1

4.8

8.4

Rates have declined in Canada this year after the central bank cut rates early in January to counter the effects of falling oil prices.

Mortgage Rates


Industry


Traditional Model

Industry

© 2015 Keller Williams Realty, Inc.30 Industry

Proposed Upstream Model


1. The implementation of the simpler, more integrated loan disclosure forms has been postponed over concerns that the new process may delay closings:

1. New rules increase mandatory consumer review period from 1 day to 3 days before closing.

2. In anticipation of delays as lenders and settlement agents adapt to new rules, NAR recommends:

1. Adding 15 days to normal closing times.

2. Completing your walk-through as soon as possible to avoid last-minute changes that may require lender approval.

New Loan Disclosure Forms Postponed from August 1 to October 3, 2015

Industry


1. Listing Marketing Enhancements - live video showings/open houses and 3D tours are becoming more mainstream and driving online traffic.

2. Mobile Is the Majority - more than half of real estate traffic is on mobile devices and can represent as much as 75% of traffic on weekends.

3. Real Estate Crowdfunding - one of the fastest-growing segments of “crowd capitalism.” U.S. real estate funding increased to more than $1 billion in 2014. Some of the big players in this space include Fundrise and Realty Mogul.

4. Big Data and Predictive Analytics - New technology is using online behavioral data to identify stronger Internet leads and predicting how likely users are to buy/sell. This has the potential to vastly improve online conversation rates which have historically performed under 3%. Some players in this space include SmartZip and Brytecore.

Tech Trends of 2015

Industry


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Documents

Mega Camp 2015 - Market Update_mykw