Fairway Madison Presentation 5.09
- 1. Wisconsin Real Estate in the 2 nd half of 2009
- 2. Source: Seeking Alpha4/09/09 “ Many analysts believe that if the world economy is going to rebound, the recovery will begin with U.S. housing.” - Don Miller, Associate Editor Money Morning
- 3. The stampede hasbegun!!
- 4. CBS Early Show money maven Ray Martin “ Yes, there's really never been a better time to go shopping for real estate.” CBS Early Show Source: CBS.com 3/14/09 IS THIS A GOOD TIME TO INVEST IN REAL ESTATE?
- 5. “ With pricesdown and interest rates at record lows, it’s a great time to buy a real estate investment.” - Barbara Corcoran Source: NBC TODAYShow.com 3/12/09 NBC Today Show
- 6. “ It's agood time to snag a bargain if you're confident in your job prospects and you don't plan to sell for at least five years.” Kiplinger's Personal Finance Source: Kiplinger's Personal Finance 3/09
- 7. “ At thetop of the list: housing. This may be the best time in a generation to buy a home.” Ten Things To Buy Before The Economy Improves Forbes.com Source: Forbes.com 3/31/09
- 8. 75 percent saidit was a good or very good time to buy a home. Pew Research Center Survey Source: Pew Research Center 3/16/09
- 9. “ On amonth-over-month basis, the total transaction count increased 21%, its largest increase since 2004.” Source: Radar Logic 4/23/09 RPX Monthly Housing Report
- 10. Where are you in the line of dominoes?
- 11. How do maximizethis opportunity?
- 12. Sorry, I’m waitingfor the bottom?
- 13. Is this reallythe right time to buy real estate?
- 14. Return on InvestmentDow S&P Nasdaq Real Estate Jan 1, 2000 – Dec 31, 2008 -35.2 -59.9 69.8 -19.8 Source: MSN Money.com, Case Shiller
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- 16. Don't Hunt forthe Bottom “ Pinpointing a bottom in home prices is very difficult, akin to picking the bottom in the stock market. But data and research indicate we're getting close." Wall Street Journal Source: Wall Street Journal 4/18/09
- 17. Source: Westcourt FundsOptimism Excitement Euphoria Denial Fear Panic Despondency Depression Hope Optimism Point of maximum risk in investment Point of maximum opportunity
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- 19. What is goingto happen with interest rates in the near future?
- 20. Mortgage Rates – 30 year fixed Source: Federal Reserve $500 billion bailout pledge Fannie & Freddie Bailout January 2008 January 2009
- 21. Mortgage Rates – 30 year fixed Source: Federal Reserve 1/1/2009 Asset Purchases Begin Asset Purchase Announcement
- 22. Mortgage Rates – 30 year fixed Source: Federal Reserve 2003 2008
- 23. My property isspecial. I am not going to lower the price?
- 24. What will happento house values in the 2 nd half of 2009?
- 25. Pricing? 100 pencils3 buyers 100 pencils 6 buyers
- 26. We must realizethe depth of the challenge.
- 27. % Appreciation in5 Year Increments Source: Brookings Papers 9/08 25% 27% 25% 29% 89%
- 28. What is theonly way to catch it?
- 29. Whitney is knownboth for her bearish calls, and thus far, for being largely correct. Which makes her predictions worth paying attention to. Source: Housing Wire 4/07/09 Analyst Meredith Whitney, well-known for her work at Oppenheimer & Co. and now at her own firm, told cable television news outlet CNBC that she expects home prices to fall another 30%.
- 30. Conclusion We stillexpect that national home prices will fall further because of the large number of homes for sale. The worst national price drops are probably behind us, however, and by 2010 national prices should begin to stabilize. Source: PMI Report April 2009
- 31. Source: Global Insight2008 4 th Quarter Report 4/09 House Price Appreciation: 4 th Quarter, 2008
- 32. Inventory vs. PriceMonths Supply Pricing 1-2 Double digit appreciation 3-4 Single digit appreciation 5-6 The Norm 7-8 Single digit depreciation 9+ Double digit depreciation
- 33. How big arole will foreclosures play in the Wisconsin market ?
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- 35. Some of thetop U.S. lenders own as many as 700,000 foreclosed homes they have yet to offer for sale, said Rick Sharga, executive vice president for marketing for RealtyTrac. Source: Bloomberg 3/12/09 Shadow Inventory?
- 36. Wednesday, April 15th , 2009
- 37. A total of 803,489 properties entered some stage of foreclosure during the first quarter, and a growing number of these properties are more expensive homes. Source: Realty Trac 4/09
- 38. Office of theComptroller of the Currency and the Office of Thrift Supervision April 2009
- 39. The biggest percentagejump was in prime mortgages, more than double the percent recorded at the end of March 2008. Prime Foreclosures Source: OCC and OTS Mortgage Metrics Report 4/3/09
- 40. Source: OCC andOTS Mortgage Metrics Report 4/3/09
- 41. Source: OCC andOTS Mortgage Metrics Report 4/3/09
- 42. Source: OCC andOTS Mortgage Metrics Report 4/3/09 Modifications?
- 43. Source: OCC andOTS Mortgage Metrics Report 4/3/09 “ Re-default rates were consistently lower for modifications that resulted in lower monthly payments.”
- 44. “ The singlemost important trigger event for delinquencies is unemployment.” Source: Market Watch 1/20/09 - Frank Nothaft, chief economist for Freddie Mac. Unemployment
- 45. Jobless Rate Source:Wall Street Journal 4/18/09
- 46. Source: Federal ReserveBank of Boston 4/13/09 Probability of a 90-day-delinquency Situation Impact Higher payment 7-11% 1% increase in unemployment 10-20% 10% fall in house prices > 50%
- 47. Shouldn’t I justwait if a want to sell my home?
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- 49. Source: Wall StreetJournal 2/06/09 Moody’s Economy Area Final % off peak Naples-Marco Island 70% Miami 66% Riverside-San Bernardino 63% Phoenix 58% Las Vegas 56% Los Angeles 53%
- 50. Source: CME Group1/02/09 November 2010 Today’s Price Projected Bottom
- 51. USA Today Wisconsin 2012 or later!!
- 52. On a $250,000 house, a family loses $480.76 per week! Assuming a 10% fall in prices…
- 53. Hi Steve: This morning in the sales meeting we announced we are at $985,000 in price reductions. This covered about 22 listings. Thanks, Barbara Wallace
- 54. Things you mustdo NOW ! Close every buyer who wants to buy. Extend every listing until the end of the year. Re-position listings to reflect current market. Work diligently on expireds through the year.
- 55.