HOW LONG WILL THE HOUSING DEMAND SURGE CONTINUE? WADE R. RAGAS, PHD MAI SRA REAL PROPERTY ASSOCIATES, (504) ( ) WADERAGAS.

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1 HOW LONG WILL THE HOUSING DEMAND SURGE CONTINUE? WADE R. RAGAS, PHD MAI SRA REAL PROPERTY ASSOCIATES, (504) ( ) WADERAGAS.COM

2 LOUISIANA EMPLOYMENT BY METRO AREA DECEMBER 2015, JANUARY 2015 AND JANUARY 2016 (Not Seasonally Adjusted) Metro Area Dec Jan Jan Percent Change Alexandria 62,413 61,897 61, % Baton Rouge 399, , , % Hammond 49,808 49,361 49, % Houma- Thibodaux 90,862 96,506 89, % Lafayette 208, , , % Lake Charles 97,075 94,260 96, % Monroe 76,114 75,078 75, % New Orleans 563, , , % Shreveport 179, , , % Louisiana 2,006,145 2,005,203 1,988,

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4 LOUISIANA EMPLOYMENT TREND JANUARY 2016, 2015 & DECEMBER SEASONABLY ADJUSTED Category Dec Jan Jan Percent Change Louisiana Employed 2,005,202 2,039,350 2,010, % Mining 43,400 54,600 42, % Construction 145, , , % Manufacturing 141, , , % Trade, Utilities 139, , , % Information 24,100 24,800 23, % Financial 89,900 92,800 89, % Services 211, , , % Education & Health 307, , , % Leisure & Hospitality 228, , , % Other Services 74,600 73,600 74, % Government 325, , , % Average Hourly $25.29 $25.28 $25.32 Average Hours Source: laworks.net; Labor Market Information, Louisiana Employment Bulletin

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6 ECONOMIC DRIVERS NEW ORLEANS METRO International Trade Medical Tourism/Convention Airport Business Services Commercial Construction Residential & Hotel Construction Retail Trade Exports holding, imports down Up, personnel constrained Steady at a high level Steady to up Down Steady or up Up Steady to up

7 ECONOMIC DRIVERS NEW ORLEANS METRO (Continued) Population In-Migration Housing Prices Orleans Crescent Suburban Metro Housing Prices Chemicals & Refining Petroleum Extraction & Transportation Less to flat Steady to 13% up in second half 2015 Strengthening appreciation 4% - 7% (2015) Steady to up Decline sharply State Government Decline in 2016 Local Government Steady

8 U. S. GROWTH RATES 2015 TO MARCH 2016 Economy Measure Change Population (Includes Immigration) 3% Employment: 4 th Quarter % 3 rd Quarter % 2 nd Quarter % 1 st Quarter % Projection % CPI % CPI No Food or Energy 2.0% Industrial Production: % to 4% % down to -2% % Source: Crandell Business Index and Various Federal Reports

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13 NEW ORLEANS AVERAGE HOUSE PRICE/FT 10 Years of Appreciation Jan. Aug June 2015 Percent Change Over 10 years Per Year Rate of Appreciation Metro Area $196,151 $236, % 2.03% Orleans $228,620 $339, % 4.86% Jefferson $188,838 $194, % 0.30% St. Tammany $212,251 $243, % 1.48% St. Charles $177,423 $215, % 2.14% St. John $148,794 $148, % 0.00% St. Bernard $116,126 $134, % 1.59% Plaquemines (Belle Chase) $240,650 $315, % 1.20% Tangipahoa $144,746 $165, % 1.43% Source: New Orleans Metropolitan Association of Realtors & Wade R. Ragas (Real Property Associates, Inc.

14 METRO AREA NEW CONSTRUCTION TREND 2014 VS Metro Area Change Baton Rouge 3,257 3, % Houma-Thibodaux % Lafayette 2,114 2, % Lake Charles 1, % Monroe % New Orleans 2,929 2, % Shreveport 1,660 1, % Louisiana Urban 12,285 11, % Jackson, MS 1,882 1, % Gulfport, MS 1,295 1, % Houston, TX 63,678 56, % Dallas, TX 40,749 56, % Source: U.S. Census New Residential Construction Reports; includes multifamily and 1 to 4 unit single-family

15 2014 HOUSING AFFORDABILITY ISSUES Monthly Payment Orleans Metro Average Price 2014 $309,533 $222,852 80% Loan Amount $247,626 $178,282 4% Rate, 30-yr. Payment $1,182 $851 Typical Property Tax Monthly $260 $160 Typical Mortgage & Prop. Tax $1,442 $1,001 Typical Household Income for Median Income Owner Occupant $52,000 $52,000 Cost of Housing to Income 27.7% 19.4% Insurance (casualty, liability & flood) (1.7% - 2.5% of House Value) Total Payment and per Foot Monthly Costs $350 to $825 Monthly $1,792-$2,267 $1.00 to $1.30 Foot Source: Dr. Wade R. Ragas, Real Property Associates, Inc. $252 to $594 Monthly $1,252-$1,595 $0.67 to $0.87 Foot

16 SINGLE-FAMILY HOUSING PRICES Parish Zip Code June 2015 June 2014 Increase Jefferson Parish $106 $104 +2% Old Metairie $204 $ % Orleans Parish $166 $155 +7% (Uptown) $257 $247 +4% (Lakefront) $189 $173 +9% (East New Orleans) $73 $74-1% (Algiers) $91 $82 +11% St. Tammany Parish $113 $106 +7% (Mandeville) $128 $118 +8% (Covington) $122 $117 +4% (Slidell) $92 $88 +5% (Slidell) $96 $88 +9% METRO NEW ORLEANS $120 $ % Source: GSREIN and Metropolitan Assoc. of Realtors and Dr. Wade Ragas of Real Property Associates, Inc.

17 Parish SUBURBAN EDGE SINGLE-FAMILY HOUSING PRICE TREND Price Per Foot 2015 NOMAR June 2014 Change Tangipahoa $90 $84 +7% St. Charles $105 $97 +8% St. John $83 $81 +3% St. Bernard $79 $76 +4% Plaquemines $136 $131 +4% Source: GSREIN and New Orleans Metropolitan Association of Realtors and Dr. Wade Ragas, Real Property Associates, Inc.

18 MULTIFAMILY RENTS, OCCUPANCY 2015 Submarket Warehouse Dist. to Quarter Two-Bedroom Two Bath Rents $1,442 or $1.70 per foot Change Market Occupancy All Units +$30 94% 0% Change East N.O. $713 -$6 91% -3% Algiers $783 +$0 94% +0% West Jefferson $850 +$10 95% -1% Metairie Harahan, River Ridge $864 or $1.00 per foot +$26 94% +1% $1,116 +$116 97% -1% Kenner $875 +$23 85% 0 St. Tammany $1,047 +$26 94% +1% Source: Greater New Orleans Multifamily Report, 2014

19 30-YEAR MORTGAGE RATES FEDERAL NATIONAL MORTGAGE ASSOCIATION February % % % % % % % %

20 REALTOR CONDOMINIUM SALES IN HIGH VOLUME LOCALES OF ORLEANS Number of Sales in Zip Code Area Year of Sale University Quarter Mid-City Uptown CBD & Warehouse Total Condo Total ,956 Source: GSREIN Multiple Listing Service & NOMAR & Wade Ragas Real Property Associates

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22 2016 STRONG TRENDS 1. Sunbelt, active retirees, 65 an over increased relocation 2. Oil regions for fracking, before Arab/Iran supply expansion, 75% price declines, price may stabilize $45 3. Enormous turmoil in Europe & Middle East and emerging markets; increased U.S. dollar 4. Relocation of world wealthy to U.S. 5. Likely continued low interest rates 6. Worldwide slow growth or recession 7. Little inflation of 1% or deflation 8. Unpredictable presidential election 9. More Internet-oriented marketing /7 cities capture more of the growth

23 OIL DISRUPTION ON WORLD ECONOMY 97,000,000 Barrels per day $105 Per barrel before Saudis $35 Per barrel after Saudi oversupply $70 Loss in revenue per barrel $6,790,000,000 (billions a day) $2,478,350,000,000 (trillions a year) Loss per day world wide oil industry Loss per year at $35 from normal revenue

24 SAUDIS, U.S. AND RUSSIONS ECONOMIC DISRUPTIONS Each about 10 million barrels a day Same $70/barrel loss in revenue a day $700,000,000 (seven hundred million a day each) 365 days Loss in revenue per year - $255,500,000,000 (billions of dollars each per year)