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Home sales are up 9.2% to 4.65 million in 2012 from 4.26 million in 2011. Annual sales levels are now close to 2007 levels.
Source: NAR
Home Sales
3
‘89 ‘90 ‘91 ‘92 ‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12
4.74.34.34.64.4
4.9
5.76.26.0
5.45.04.74.64.74.5
4.03.83.53.53.43.22.92.93.0
Total Annual Single Family Home Sales (in Millions)
The year ended on a strong note with a 12.8% increase in the monthly annual pace of sales from December 2011 to 2012.
Source: NAR
Home Sales MONTHLY ANNUAL PACE OF SALES (Seasonally Adj.)
4
Dec '11 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec '12
4.38
4.63 4.60
4.47
4.62 4.62
4.374.47
4.83
4.694.76
4.994.94
12.8% Increase Total Annual Home Sales (in Millions)
Median home prices are up 6.3% to $176,600. If prices followed a 4% appreciation rate each year, the median price would be $231,683. This implies prices may still be 23.8% undervalued, based on the trend line.
Source: NAR
‘89 ‘90 ‘91 ‘92 ‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12
Home Price
5
$231$222
$177$166
$179$198
$95
Long-Term Average = 4% Annual Median Home Price (in Thousands)
‘89 ‘90 ‘91 ‘92 ‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12
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%
Home price appreciation is back in positive territory and growing strong, thanks in part to less distressed sales and tightening inventory.
Source: NAR
Annual Appreciation
7
1989-2000 3.39%
2001-2005 8.9%
2006-2011 - 4.6%
Annual Median Home Price Appreciation
In December, the median home price was up 11.5% compared to the same month a year earlier. Prices reached a high of $188,800 during June, the highest monthly level since September 2008. The last time there were 10 consecutive monthly increases was August 2005-May 2006.
Source: NAR
Home Price MONTHLY
8
Dec '11 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec '12
$162.2
$154.6 $155.6
$164.8
$173.7$180.3
$188.8 $187.8 $184.9$178.3 $176.9 $179.4 $180.8
11.5% Increase Monthly Median Home Price (in Thousands)
‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12
4.8 4.5 4.6 4.7 4.7 4.3 4.5
6.5
8.910.4
8.8 9.48.3
5.9
Annual average inventory declined 28% and is back to balanced levels for the whole of 2012. While local markets may vary considerably, year-end monthly numbers show the United States is clearly in a seller’s market.
Source: NAR
Months Supply of Inventory
9
Buye
r’s M
ktSe
ller’s
Mkt
Balanced = 6 months
Balanced = 6 months Annual Months of Inventory
31% Decline Months Supply of Inventory Balanced = 6 months
When looking at the monthly inventory levels, December 2011 to December 2012 months supply of inventory is down 31%. The last quarter of the year illustrates a clear move into a seller’s market.
Source: NAR
Months Supply of Inventory MONTHLY
10
Dec '11 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec '12
6.4 6.0 6.3 6.2 6.5 6.4 6.5 6.4 6.0 5.6 5.3 4.8 4.4
Buye
r’s M
ktSe
ller’s
Mkt
After a sharp decline, new home building is picking back up as inventory falls.
Source: BEA
Residential Building Permits
12
Mar 2009All-time low
513
Sep 2005Hit a high of 2,263
Sep 1972All-time high of
2,419
Sep 1975Fell to 719
Steeper decline than 2005-2009higher interest rates and oil prices
Existing home inventoryResidential
building permitsin thousands
Jan 19601,092 Nov 2012
900
Jan 1991786
Residential Building Permits (in Thousands) Months Supply (in Months)
1972 1975 1980 1985 1990 1995 2000 2005 2010 2012
3.74.54.75.0
6.06.36.45.95.85.8
6.57.0
8.17.4
6.97.67.87.9
8.47.3
8.49.3
10.110.310.310.210.2
12.4
13.913.2
16.016.6
13.7
11.2
9.68.98.99.19.2
8.07.4
Mortgage rates hit a record low for the year of 2012 at 3.66%. The Federal Reserve has kept Treasury rates low and the spread, or difference, between the two has tightened since 2008.
Source: Freddie Mac
Mortgage Rates 30-Year Fixed
13
Annual Mortgage Rate (%)
The year ended on a record-breaking low. In November 2012, monthly interest rates hit an all-time low of 3.35% and stayed through the end of the year. Rates are down 2.8 percentage points and have declined 45% since January 2006.
Source: Freddie Mac
Mortgage Rates MONTHLY 2006-2012
14
Jan '06 Jan '07 Jan '08 Jan '09 Jan '10 Jan '11 Jan '12 Dec '12
Monthly Mortgage Rate
6.15%
3.35%
4.81%
6.76%
It takes a smaller slice of the typical family’s income to pay the mortgage on a median-priced home.
Source: NAR
Affordability
15
PERCENTAGE OF THE MEDIAN FAMILY INCOME REQUIRED FOR MEDIAN PRICE HOME PAYMENT
87.1%
12.9%
Everything ElsePrincipal and Interest Payment
78.4%
21.6%
Historically: 2012: