MEGA AGENT
Market Update Gary Keller and Jay Papasan 2
The U.S. Housing Market Keller Williams Realty, Inc.
Housing Market Cycles 4 The U.S. Housing Market
Housing Market Cycles 5 The U.S. Housing Market
Housing Market Cycles 6 The U.S. Housing Market
Housing Market Cycles 7 The U.S. Housing Market
Housing Market Cycles Long Term Trend 8 The U.S. Housing Market
Housing Market Cycles 9 The U.S. Housing Market
Home Sales - Monthly 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. June June 5.1 5.4 5.4 5.3 5.1 4.8 4.9 4.6 4.6 4.7 4.8 4.9 June 5 5.1 5 5.1 5.2 5 5.1 4.8 4.9 5.2 5.1 5.3 5.5 Source: NAR 2013 2014 2015 Seasonally Adjusted Annual Rate of Home Sales 10 The U.S. Housing Market
Home Price - Annual 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. $222 $179 $198 $166 $260 $223 est. $317 $313 $264 $95 89 91 93 95 97 99 01 03 05 06 07 08 09 10 11 12 '13 '14 '15 '16 '17 '18 '19 '20 Source: NAR 11 The U.S. Housing Market Long-term Average = 4% Trend Line Reset = 4% Annual Median Home Price (in Thousands) Average Growth Since Recovery = 7%
Months Supply of Inventory 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. Buyer s Mkt 5.5 6 5 5.1 5 4.4 Jun '13 Sep Dec Mar Jun '14 Sep Dec Mar Jun '15 Seller s Mkt Balanced Source: NAR Inventory Balanced = 6 months 12 The U.S. Housing Market
Mortgage Rates - Monthly Mortgage rates have been slowly rising since the beginning of the year as the Federal Reserve debates when to adjust their rates. 4.80% 4.46% 4.05% 3.67% 3.35% Jan '11 Jul '11 Jan '12 Jul '12 Jan '13 Jul '13 Jan '14 Jul '14 Jan '15 Jul '15 Source: Freddie Mac 13 The U.S. Housing Market Monthly Mortgage Rate
U.S. Economy Keller Williams Realty, Inc.
GDP - Quarterly The economy got off to another slow start this year, but has begun to pick up again. 0.2 3.1 2.7 1.4 2 1.3 3.9 1.7 3.9 2.7 2.5 2.9 0.8 4.6 2.7 1.9 0.5 0.1 1.9 1.1 3 3.8 4.6 4.3 2.1 0.6 2.3-2.7-1.9-0.5-1.5-0.9-5.4-8.2 Q1 '07 Q4 '07 Q3 '08 Q2 '09 Q1 10 Q4 '10 Q3 '11 Q2 '12 Q1 '13 Q4 '13 Q3 '14 Q2 '15 Source: BEA Real GDP Growth Rate, Quarterly, Seasonally Adjusted (Percentage) 15 U.S. Economy
Unemployment - Monthly Unemployment has moved back into the range of what can be considered normal. 10% 5% 5.7% 5.3% Jan '08 Jan '09 Jan '10 Jan '11 Jan '12 Jan '13 Jan '14 Jan '15 Jun '15 Source: BLS 16 U.S. Economy
Inflation Inflation remains below the target rate and will be watched closely as the Federal Reserve considers rate increases. 4.8% 4.5% 2% 1.4% 1.0% 1.73% -.02% '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15 Source: BEA CPI (Includes Energy and Food) Core CPI (Excludes Energy and Food) Target = 2% 17 U.S. Economy
Special Topics Keller Williams Realty, Inc.
Affordability - NAR Affordability Index Affordability has been declining since January as prices continue to outpace wage growth. 181 179 154 156 159 167 166 170 168 172 166 160 153 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Source: NAR 2014-2015 19 Special Topics 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.
New Home Construction Based on inventories, we still need to see more construction. 1,082 648 706 600 623 719 691 693 782 Historical '14 Jan Feb Mar Apr May Jun Jul New Homes (in Thousands) 20 Special Topics
CANADA Housing Market Keller Williams Realty, Inc.
CANADA Home Sales - Monthly After a slowdown at the end of 2014, home sales have ticked up for most of 2015. 39K 41K 36K 43K 38K 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 22 Canadian Housing Market
CANADA Home Price - Monthly Prices in Canada have continued to increase, with the largest gains concentrated in Toronto and Vancouver. $389K $387K Jul '13 Sep Nov Jan '14 $401K $399K Mar May Jul Sep Nov Jan '15 $438K Mar May Jul '15 Average Monthly Home Price (Canadian Dollars, in Thousands) 23 Canadian Housing Market
CANADA Inventory - Monthly Canadian inventory has remained in balanced territory throughout the year, but has been closer to a seller s market than the previous year. Seller s 60% 52% 53% 50% 57% 40% Balanced 54% Buyer s Jul '13 Aug Sep Oct Nov DecJan '14Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecJan '15Feb Mar Apr May Jun Jul '15 Source: CREA Monthly Single Family Home Sales 40% 60% 24 Canadian Housing Market
CANADA Mortgage Rates Rates have declined in Canada this year after the central bank cut rates early in January to counter the effects of falling oil prices. Yearly 13.4 Monthly 9.2 8.4 7.1 Average Annual Mortgage Rate (Percentage) 25 Canadian Housing Market y Ma Ma r n' 15 4.6 Ja No v Se p l Ju y Ma Ma r 14 n' 4 Ja '1 1 1 9 0 7 0 5 0 3 0 1 0 9 9 7 9 5 9 3 9 1 9 8 9 4.9 4.8 Ju l Au g 5.3 '14 - '15 Actual Monthly Mortgage Rate (Percentage)
Industry Keller Williams Realty, Inc.
Traditional Model 29 Industry
Proposed Upstream Model 30 Industry
New Loan Disclosure Forms Postponed from August 1 to October 3, 2015 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. 31 Industry
Tech Trends of 2015 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. 33 Industry
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