Real Estate By The Numbers

The Numbers That Drive U.S. Real Estate

Home Sales

Home Price

Inventory

Mortgage

Affordability

Home Price - Annual

Median home price for 2013 was $197,100 and is 11.5% above where it was in 2012, but it is still below the long-term trend.

‘89 ‘91 ‘93 ‘95 ‘97 ‘99 ‘01 ‘03 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 '13

Long-term Average = 4% Annual Median Home Price (in Thousands)

5 The Numbers That Drive U.S. Real Estate

$241$222

$179

$198

$95

Source: NAR

$197$177

$166

Home Price - Annual Appreciation

Median home price appreciation was 11.5% according to NAR, making it the second-highest year of price gains since NAR began collecting data.


Source: NAR

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

11.5%

6.3%

-2.7%

0.6%

-12.5%

-9.8%

-1.8%

1.3%

12.2%

8.3%7.5%7.0%6.3%

4.3%3.8%5.4%5.2%4.8%

3.1%4.0%3.4%2.7%

5.5%

2.9%

5.9%

Annual Median Home Price Appreciation

1989-2000 3.39%

2001-2006 8.9%

2007-2011 - 4.6%

‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 '13

Balanced = 6 months Annual Months of Inventory

4.95.9

8.3

9.48.8

10.4

8.9

6.5

4.54.34.74.74.64.54.8

Months Supply of Inventory - Annual

Inventory has been persistently tight this year. We have seen a return of high housing demand, which has not yet been met with an equal response in supply.


Buye

r’s M

ktSe

ller’s

Mkt

Source: NAR

Bala

nced

'72 '75 '80 '85 '90 '95 '00 '05 '10 '13

Annual Mortgage Rate (%)

Mortgage Rates - Annual

Mortgage rates averaged 4% in 2013, up 30 basis points from 2012.


Source: NAR

7.4

16.6

7.3

4.0

8.1

Mortgage Rates - Monthly


Jan '11 Jan '12 Nov '12 Sep '13 Dec '13

Monthly Mortgage Rate

3.9%

4.5%4.8%

3.35%

Source: Freddie Mac

Mortgage rates have begun to increase and are likely to slowly rise toward more historically normal rates.

4.5%

4.2%

12.7%

87.3%

Affordability - Percentage of Income

The percentage of a typical family’s income it takes to own a home has increased 1.5% in the last year due to a combination of slowly rising interest rates and the rapid growth of home prices in 2013.


14.2%

85.8%

Everything Else Principal and Interest Payment

21.6%

78.4%

Historically 2013Source: NAR

2012

Affordability in Perspective


Gas

1989 $0.97 $1.82

2013 $3.60

Source: BEA

Bread

1989 $0.67 $1.26

2013 $1.40

Car

1989 $15,350 $28,851

2013 $31,252

Adjusted for Inflation



Affordability in Perspective - House Payment


Median Home Price: $94,000 (Adj. $176,596)

Mortgage Rate: 10%

Monthly P&I Payment: $825 (Adj. $1,551)

Median Income: $28,906 (Adj. $51,681)

Median Home Price: $197,100

Mortgage Rate: 4.0%

Monthly P&I Payment: $941

Median Income: $51,107

1989 2013

‘76 ‘80 ‘85 ‘90 ‘95 ‘00 ‘05 ‘10 '13

Sides Per Agent Agents (in Thousands) Available Sides (in Millions) 10.3 Historical Average

Sides Per AgentSides per agent rose in 2013 as the agent population remained close to 1 million and home sales increased from 4.7 million to 5.1 million.

32 U.S. Events

1,042,000

10.2M

1,358,00014.2M

6.4M

4.4M

6.7M

8.7M 823,000

486,000

9.9M

Source: NAR

13.8

7.0

9.9

7.9

13.8

6.9

9.810.3

Oct '08 Jan '10 Jan '11 Jan '12 Jan '13 Dec '13

Foreclosures Short Sales

Distressed Sales

34

14%

49%

34%38% 40%

35%

In 2013 the percentage of sales made up of distressed properties dropped drastically thanks to the increase in home prices and in conventional sales. Based on NAR’s estimates, the percentage of sales composed of distressed properties was only 14% in November 2013 and down from 24% at the end of last year.

U.S. Events

Source: NAR

5%

9%

24%

Underwater HomesAs home prices rise, the number of buyers in negative equity situations has rapidly decreased, freeing up more people to sell homes.

35 U.S. Events

Q2 '10 Q4 '10 Q2 '11 Q4 '11 Q2 '12 Q4 '12 Q2 '13

13%14.5%

19.7%21.7%22%22.3%

23.7%25.2%24.4%24.8%25%25.4%24.7%25.1%

Underwater Homes (% of Mortgaged Homes)Sources: Core Logic, Harvard Joint Center for Housing Studies

Qualified MortgagesOn January 10, 2014, new mortgage regulations that create “qualified mortgages” and new standards for assessing borrower’s ability to repay went into effect. These new regulations may make credit tighter and slower at the beginning of the year as financial institutions adjust to the new regulations. Regulations include:

38 U.S. Events

Lender may be liable for up to 3 years of finance

charges plus legal fees if it’s determined in court

that a lender did not act in good faith.

No negative amortization, interest only, balloon

payments, or terms longer than 30 years.

Points and fees may not exceed 3%.

Consumer debt-to-income ratio must be less than 43%, down from 45%.

New Home Construction

40 U.S. Events

Historical '07 '08 '09 '10 '11 '12 '13

618535

430471445

622

1,0461,082

New Homes (in Thousands)

2013 was the best year for new home construction since 2008.

Months Supply of Inventory

55 Luxury

Mon

ths

Supp

ly

Dec '08 Dec '09 Dec '10 Dec '11 Dec '12 Dec '13

39.4

10.9

22.9

6.3

12.9

3.9

14.5

8.4

5.6

11.6

8.2

6.7

19.2

11.3

7.86

Luxury Move-Up Starter Balanced (6 Months)

10.9

6.2

4.1

Source: BrokerMetrics

Days on Market

56 Luxury

Dec '08 Dec '09 Dec '10 Dec '11 Dec '12 Dec '13

Luxury Move-Up Starter

164

121126

109

90

89 92

112

143 144

98

82

93

123

110

71

72

97

Source: BrokerMetrics

Technology Enables the Agent, Not Replaces Them

Agents must move their value propositions from information provider to information interpreter.

65 Industry

*There is no 2002 data. No data for Internet for 2001.

67%

74%

81%

88%

95%

'01 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13

Purchased through Agent Used Internet

75%

71%

92%

88%Internet

Agent

Syndication and Aggregation

Online syndication sites like Zillow and Trulia are using huge consumer advertising budgets combined with agents’ desire for lead generation to change the competitive landscape.

67

They are selling our own leads back to us.

They are enabling low-lead generation

agents to set the agenda.

Consumers are attracted to the search

experience and ease of use.

No evidence to show that syndication

sells a home faster or for more money.

The big question is: Why do we allow

them to exist?

Industry

First-time Home Buyers

'93 '95 '97 '99 '01 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13

38%39%37%

50%47%

41%39%

36%

40%40%40%42%42%42%42%41%

First-time Home Buyers

74 National Association of Realtors

40%

First Step in Buying Process

78

2012 2013

Looked online for properties for sale 41% 42%

Contacted a real estate agent 18 17

Looked online for information about the buying process 11 14

Drove by homes/neighborhoods 8 7

Contacted a bank or mortgage lender 6 6

Talked with a friend or relative about buying process 6 5

Visited open houses 3 3

Contacted a builder/visited builder models 1 2

Looked in newspapers, magazines, or home-buying guides 1 1

Contacted a home seller directly * 1

National Association of Realtors

Where Buyers Found The Home They Purchased

‘01 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 '13

Internet 8% 11% 15% 24% 24% 29% 32% 36% 37% 40% 42% 43%

Real estate agent 48 41 38 36 36 34 34 36 38 35 33 33

Yard sign/Open house sign 15 16 16 15 15 14 15 12 11 11 9 9

Friend, relative, or neighbor 8 7 7 7 8 8 7 6 6 6 5 6

Home builder or their agent 3 7 7 7 8 8 7 5 4 5 4 5

Directly from sellers/knew the sellers 4 4 5 3 3 3 2 2 2 2 1 2

Print newspaper advertisement 7 7 5 5 5 3 3 2 2 2 1 1

Home book or magazine 2 1 2 1 1 1 1 * * * * 1

Other 3 6 4 -- -- -- -- -- -- -- -- --

81 National Association of Realtors

*There is no data for 2002.

Weeks in Home Search

79

'01 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13

1212121212

10

888887

Number of Weeks



Method of Home PurchaseJust because buyers are using the Internet more doesn’t mean they’re not relying on you. In fact, the number of buyers using an agent remains essentially at a ten-year high. To keep it that way, understand your value proposition and be able to communicate it.

83

'01 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13

88%89%89%83%77%81%79%77%77%77%75%69%

Agent or Broker Builder or Builder's Agent Previous Owner

