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1 jb Fisher Center Real Estate Conference April 22, 2013 Dean Wehrli, Vice President.

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Presentation on theme: "1 jb Fisher Center Real Estate Conference April 22, 2013 Dean Wehrli, Vice President."— Presentation transcript:

1 1 jb Fisher Center Real Estate Conference April 22, 2013 Dean Wehrli, Vice President

2 Was A Great Year Home Prices and Sales Rates Were Up Giants won the World Series Stanford won the Rose Bowl

3 3 Northern California Price Appreciation Among the Best Nationally This is great news for private builders who need equity partners. This is also why the public builders are allocating capital to Northern CA Source: John Burns Real Estate Consulting, Metro Analysis & Forecast, April 2013

4 4 Foreclosure Starts Trending Down to Normal through 2014 Distressed still an Issue, but less so all the time

5 5Agenda 1.Market Trends Near You 2.The Big Creep 3.Pros and the Cons

6 6 Cycles

7 7 JBREC Housing Cycle Risk Index™ looks at 4 major categories for fundamentals I. Demand 1.Total Buying Activity (New and Resale) 2.Median Resale Price Appreciation 3.Job Growth 4.Population Growth 5.Realtor Market Ratings II. Supply 1.Permit Trends 2.Resale Listings III. Affordability 1.JBREC Affordability Index 2.Home Equity 3.Mortgage Rates IV. U.S. Economy 4 major categories, with 11 subcategories and 25 calculations

8 8 San Jose HCRI is a B+

9 9 San Francisco HCRI is a B+

10 10 Oakland HCRI is an A-

11 11 Sacramento HCRI is an A

12 12 Sales

13 13 San Jose new home sales growth through 2016 – but still below 2007 levels Source: John Burns Real Estate Consulting, Metro Analysis & Forecast, April 2013

14 14 Oakland same story – new home sales to near 6,000 in 2016, but still below 2006 Source: John Burns Real Estate Consulting, Metro Analysis & Forecast, April 2013

15 15 Sacramento also better bit below the norm - INVENTORY Source: John Burns Real Estate Consulting, Metro Analysis & Forecast, April 2013

16 16 Prices

17 17 Huge near-term appreciation in San Jose Source: John Burns Real Estate Consulting, Metro Analysis & Forecast, April 2013

18 18 Milder but still strong in Oakland Source: John Burns Real Estate Consulting, Metro Analysis & Forecast, April 2013

19 19 Nowhere to go but up in Sacramento Source: John Burns Real Estate Consulting, Metro Analysis & Forecast, April 2013

20 20 New home share of total sales. Not the norm – below even the mid-1990s Source: John Burns Real Estate Consulting, Metro Analysis & Forecast, April 2013

21 21 Monthly inventory levels – neither is this Source: John Burns Real Estate Consulting, Metro Analysis & Forecast, April 2013

22 22Agenda 1.Market Trends Near You 2.The Big Creep 3.Pros and the Cons

23 23 Nowhere worked

24 24 Call me if it’s in the core

25 25 Call Us

26 26 Please can we buy your land? Pretty please?

27 27Agenda 1.Market Trends Near You 2.The Big Creep 3.Pros and the Cons

28 28 The Good Economy Picking Up: Knocking on wood. Boomerang Buyers: Itching to get back into the for-sale market. Urgency Back: Prices not falling and how long will these mortgage rates last? Inventory: How low can it go? Rising Prices: With a vengeance. Rising Sales: But already supply constrained.

29 29 10% of 2013 demand from “boomerang” buyers

30 30 The “Concerning” Prices Rising: Low payments still, but price to income not great anymore. Mortgage Rates: Have to go up – and with them the payments to price ratio. Investors: Organic buyers often shut out. Inventory: Resales inventory has to go up – the chicken and egg phenomenon. No Place to Build: We need to get lots to the market. Be Careful of the Hype: But a hot market will eventually lead to mistakes.

31 31 The Big Re-Set The Big Switch Flip The Bi-Polar Market

32 32 Prices vs. Payments Source: John Burns Real Estate Consulting, Metro Analysis & Forecast, April 2013 Core marks already above the long-term norm – though we may have a new normal that is still a little concerning. Low mortgage rates leave room to grow – at least for the near term.

33 33 Make Great Decisions Using Great Analysis (916) ? Questions ?


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