Spring 2010 Housing Briefing

LocalExperienced Independent

Spring Housing Briefing

Local

Apex Home Loans, Inc © 20103204 Tower Oaks Boulevard #400 Rockville, MD 20852 || www.apexhomeloans.com

• Largest Independent Mortgage Banking Firm Headquartered in Montgomery County • Licensed in DC, MD, VA• Decisions Made Locally• In house processing, underwriting, appraisal management, doc draw, and funding


Experienced• Founded in 1998• Staff to originator ratio of 1:1• Loan originators all have 10+ years experience• Owners all have 15+ years experience• Consistently called on by local & national media

Independent


• More control than a mortgage broker or large retail bank• Owners all on site• Full Product Menu • Direct Lender

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Keynote Presentationby John McClain,

George Mason Center for Regional Analysis

Apex Home Loans

March 3, 2011

The Washington AreaEconomic Performance and Outlook

John McClain, AICP, Senior Fellow and Deputy Director, Center for Regional Analysis

School of Public Policy, George Mason University

Quarters After Trough

% C

hang

e in

GD

P

Recession Recovery Patterns of GDPPast Five Recessions

Sources: BEA, GMU Center for Regional Analysis,

(2009 Recession has 6th

Q added from GI Forecast)

U.S. Gross Domestic ProductQuarterly Change: 2006 – 2013

%

2006 2007 2008 2009 2010 2011 2012 2013

Source: Global Insight

Forecast > > > > > > >

ISM Manufacturing and Non-Manufacturing Indices

Annual Change in Payroll Jobs – USMonth over-the-YearTHOUSANDS

Jan = + 550

Source: BLS Establishment Survey, NSA

Initial Unemployment Claims000s (4-week moving average)

402

Feb-11

U.S. Unemployment Rate

Source: BLS, Seasonally Adjusted

9.0

%

GI FCST11 – 9.012 – 8.513 – 7.814 – 7.115 – 6.6

U.S. Housing TrendsNew & Existing Home Sales

Existing(left scale)

New

(Right Scale)

(000s) (000s)

L.I.

C.I.

U.S. Coincident and Leading IndicesNov 2006 – Jan 2011

RECESSION > > >

Interest Rates2001 - 2015

Forecast > > > > > >%

Oil Prices$ per barrel$/barrel

Source: Global Insight

Forecast > > > > > > > >

Consumer Confidence

100

Present Situation

Expectations

Source: Conference Board, GMU Center for Regional Analysis

Jan-11

The Washington Economy

15 Largest Job MarketsJob Change from Recession Start (12/07)

(000s)Washington -22,000

Source: BLS March 2010 Benchmark, GMU Center for Regional Analysis

15 Largest Job MarketsJob Change Last 10 Years

(000s)Washington 280,000


Washington MSA Leading Economic IndexMonth-Over-Year Percent Change

12-MonthMoving Average

Washington MSA Coincident Economic IndexMonth-Over-Year Percent Change

12-MonthMoving Average

000s

Annual Job Change – MOTYCWashington MSA


Annual Job ChangeWashington MSA

000s Annual Data Annual Month over Year

2008 2009 2010


15 Largest Job MarketsJob Change Dec 09 – Dec 10

(000s)

Washington + 57,500


Job Change by SectorDec 2009 – Dec 2010

Washington MSA(000s) Total 57,500


Annual Job ChangeDistrict of Columbia


2008 2009 2010


Annual Job ChangeNorthern Virginia


2008 2009 2010


Annual Job ChangeSuburban Maryland


2008 2009 2010


9.2 – DC9.1 – U.S.

6.0 – SMD5.7 – MSA4.7 - NVA

Unemployment Rate

Source: BLS, Not Seasonally Adjusted

15 Largest Job MarketsRanked by Unemployment Rate

November 2010%

US 9.1

Source: BLS, NOT Seasonally Adjusted

5.7

Wages & SalariesProcurement

Federal Spending By Type1984 - 2009

$ Billions

DOD Federal Procurement in MSAProjection of Sec. Gates Proposed Cuts

$ Billions

Source: Census Consolidated Federal Funds Reports

- $9.5 Billion- 66,000 Jobs

Federal EmploymentWashington Metro Area

000s Eisenhower Kennedy – Johnson

Nixon - Ford

Carter Reagan Bush 1 Clinton Bush 2

- 22

+ 80

+ 36+ 18 - 6 + 4

- 42 + 23

Obama

+28

Housing Market Trends

House Price Index ChangeQ3 2000 – Q3 2010%

Source: FHFA

House Price ChangeQ4 2009 – Q4 2010%

Source: NAR Single Family

Existing Home SalesWashington MSA

Through January 2011

12-Month Moving Average

Median House Sales PriceWashington MSA

Source: MRIS, GMU Center for Regional Analysis

5.0%/Year

Average Sales Price Annual Percent Change

Washington MSAAll Existing Homes%


Percent Change in Inventories of Existing Homes

Month-Over-the-Year-Change2000 – 2010, MSA

Jan-May, 2006 >100 %


%

Jan = -17.3%

Total Active Listings Per SaleJanuary Each Year – Metro Area


Average Sales Price Percent ChangeWashington MSA

All Housing Types%


Annual Change Annual Change by Month

2008 2009 2010

Average Sales Price Percent ChangeNorthern Virginia

All Housing Types%



2008 2009 2010

Average Sales Price Percent ChangeSuburban Maryland

All Housing Types%



2008 2009 2010

Average Sales Price Percent ChangeDistrict of ColumbiaAll Housing Types

%



2008 2009 2010

Average Sales Price Percent ChangeMetro Area – Single Family Detached

%



2008 2009 2010 2011

Nov %: DC = -7, SM = +5, NV = +1

Average Sales Price Percent ChangeMetro Area – Single Family Attached

%



2008 2009 2010 2011

Nov %: DC = +16, SM = -.2, NV = +2

Average Sales Price Percent ChangeMetro Area – Condos

%



2008 2009 2010 2011

Nov %: DC = -9, SM = -21, NV = -5

Washington MSABuilding Permits

2000 – 2010, 3-Month Mvg Avg

Economic Forecast

Employment Change bySub-state Region (000s)

2008 2009 2010 2011 2012 2013 2014 2015

D.C.D.C. 10.1 10.1 -0.6-0.6 10.510.5 10.510.5 9.79.7 9.39.3 9.69.6 9.49.4

Sub. MDSub. MD -4.3-4.3 -26.8-26.8 1.51.5 15.515.5 13.613.6 14.914.9 15.615.6 14.614.6

No. VANo. VA 3.6 -24.5 9.5 22.1 20.7 22.3 22.6 20.3

REGION 9.59.5 -51.9-51.9 21.521.5 48.148.1 44.044.0 46.546.5 47.847.8 44.244.2

Average Annual Change 1990-2010 = 36,000

Source: BLS, GMU Center for Regional Analysis, 2009-2014 based on 2010 Benchmark data from BLS

Economic Outlook (GRP) – 2015Washington Area and Sub-state Portions

(Annual % Change)%

DCSMMSANV

Source: GMU Center for Regional Analysis

%

Source: Global Insight, GMU Center for Regional Analysis

GDP/GRP 2000 - 2015

Washington

U.S.

• Nationally most economic measures are positive and gaining momentum, jobs and housing lag

• Local Economy– Good job growth, declining unemployment, and job

growth in high-wage sectors• Local Housing Market

– Prices are stable, rising– Inventories moderate– Given that and with mortgage rates low, sales – New housing is yet to recover…later this year & 2012

SUMMARY

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LocalExperienced Independent

Spring Housing Briefing

Education

Spring 2010 Housing Briefing