KCM Divided into Three Sections

NAR 8/2013 Real Estate Recovery Sales Started Sustained Recovery September 2011 Prices Started Sustained Recovery June 2012 Inventory Started Sustained Recovery January 2013

“The forces pulling the home ownership rate lower are past their apex…House prices are rising, but remain affordable at 21% below peak, even as rents rise. Some who lost homes early in the crisis can now qualify again for mortgage loans. As housing recovers and consumers again see prices rising steadily, perceptions will swing back to favor home ownership.” Moody’s Analyitics 8/2013 Celia Chen Senior Director - Moody's Analytics A Swing Back Toward Ownership

KCM Blog 8/2013 Boomerang Buyers “HUD recently announced that people who lost their home through a foreclosure, short sale or bankruptcy, may be eligible to finance a home again in as little as 12 months. This is a reduction from the previously required minimum of 36 months from the date of the “most recent event.” Released August 15, HUD provided guidelines under “Back to Work: Extenuating Circumstances” meant to ease the path for home ownership for many.”

Joint Center for Housing Studies Harvard University 8/2013 “Even after the dramatic loss of equity and the high foreclosure rates, the early evidence suggests that people seem to believe that, over the long run, owning is still preferable to renting... Reexamining the Social Benefits of Homeownership after the Housing Crisis The long term cultural preference for owning seems to have weathered the recent housing crisis.”

Joint Center for Housing Studies Harvard University 8/2013 “The research on home-buying expectations supports the conclusion that very large percentages of Americans still expect to buy a home at some time in the future… Moreover, the finding that younger renters and owners are more likely than their older counterparts to expect to own bodes well for the future of the housing market.” Reexamining the Social Benefits of Homeownership after the Housing Crisis

FHFA Regional Home Prices (year-over-year) FHFA Q HPI Report

2012 3Q2012 4Q Q2013 2Q

FHFA State Home Prices (year-over-year) FHFA Q HPI Report

35% Loss in Price, then 35% Gain Still 12% off Peak

MonthsMarketPricing 1- 5SellersAppreciation 5 - 6EvenThe Norm 6+BuyersDepreciation Months Supply & Impact on Price

Months Inventory of Homes for Sale NAR 8/ Months = Normal Market Inventory

NAR 8/2013 Year-over-Year Inventory Levels

S&P Case Shiller 8/2013 Year-over-Year Change in Prices

Zillow 8/ million homeowners have been freed from negative equity in the last twelve months. million additional are expected to be freed in the next twelve months. 1.9

Cost vs. Price

Mortgage Rate Projections Analyst Projected Rate 3Q 2014 Fannie Mae 5.0% National Assoc. of Realtors 5.1% Freddie Mac 5.1% Mortgage Bankers Assoc 4.9% 8/2013

Home Prices Next Year In the recent Home Price Expectation Survey, over 100 leading housing analysts called for an approximate 5% increase in home values over the next twelve months. Home Price Expectation Survey 8/2013

Thinking about moving up to the home of your dreams?

Comparison – Next YearCurrent HomeMove-Up Home Current Price$240,000$360,000 Future Price (+5%) $252,000$378,000 Future Gain$12,000$18,000 Total Gain$6,000 The Move-Up Seller

PriceRateP&I Today $360,0004.5%$1, End of Year $378,0005%$2, Monthly Savings $ The Move-Up Seller

January 2000 – August 2013 MSN Money, Case Shiller Return on Investment

Pending Home Sales NAR 8/ = Historically Healthy Level

Pending Home Sales NAR 8/2013

Months Inventory of Homes for Sale NAR 8/ Months = Normal Market Inventory

NAR 8/2013 Percentage of Distressed Property Sales 35% 15%

S&P Case-Shiller Home Price Indices S&P Case Shiller 8/2013

Reasons to Hire a Real Estate Professional 5 They help with all disclosures and paperwork necessary in today’s heavily regulated environment. They are well educated in and experienced with the entire sales process. They act as a ‘buffer’ in negotiations with all parties throughout the entire transaction. They help understand today’s real estate values when setting the price on a listing or on an offer to purchase. They simply and effectively explain today’s real estate headlines and decipher what they mean to you.

NAR 8/2013 Found sixty eight percent of those surveyed responded that now is a good time to buy a home Found over 50% of renters say that eventually owning a home is one of their highest personal priorities 68 % 51 % NAR’s 2013 HOUSING PULSE Survey Found eight in 10 Americans believe buying a home is a good financial decision

Year-over-Year Change in Prices S&P Case Shiller 8/2013

30 Year Fixed Rate Mortgage History January September 2013 Federal Reserve 9/2013

Price Money Down Mortgage Interest Rate Payment (P&I) Last Year*$187,800$37,560$150,2403.5%$ This Year*$213,500$42,700$170,8004.5%$ Next Year**$224,175$44,835$179,3405%$ *For the first two examples, we used the NAR’s Existing Home Sales Report to establish median price and Freddie Mac’s Primary Mortgage Market Survey to establish mortgage rate. We also assumed a 20% down payment in all examples. **To establish next year’s pricing, we depended on the over 100 housing experts surveyed for the Home Price Expectation Survey who called for an approximate appreciation rate of 5% over the next twelve months. For the interest rate, we took the average of the projections from the Mortgage Bankers’ Association, Freddie Mac and Fannie Mae. The Cost of Waiting

Resources KEEPINGCURRENTMATTERS.COM SlideSlide TitleLink 4Real Estate Recoveryhttp:// 5A Swing Back Toward OwnershipPAID: 6Boomerang Buyers gagee 7, 8Social Benefits of Homeownershiphttp:// 9, 10, 11 FHFA Regional Home Prices, FHFA State Prices 14Months Inventory of Home Saleshttp:// 17Negative Equity Graphichttp://zillow.mediaroom.com/index.php?s=159&item=373 20Mortgage Rate Projections outlook pdf 21Home Prices Next Yearhttps://pulsenomics.com/Q2_2013_HPE_Survey.php 26Return on Investmenthttp://

Resources SlideSlide TitleLink 27, 28, 29, 30 Pending Home Sales, Months Inventory of Homes for Sale, Percentage of Distressed Property Sales 31S&P Case-Shiller Home Price Indices assets/resources/public/documents/19529_cshomeprice-release-0730.pdf 34Housing Pulse Survey say-homeownership-is-a-top-priority 3630 Year Fixed Rate Mortgage Historyhttp:// 34S&P Case-Shiller Home Price Indices assets/resources/public/documents/19529_cshomeprice-release-0730.pdf 41Stephen Phillips Quote Outlook-Survey-Millennials 42Home Affordability Index Family Wealthhttp://economistsoutlook.blogs.realtor.org/2013/07/30/the-latest-homeownership-rate/ KEEPINGCURRENTMATTERS.COM

“Home buyers are more informed than ever with their Internet searches and ongoing research; however, there’s a critical need to transform that information into analysis and advice that helps consumers make the best home-buying and selling decisions.” Stephen Phillips Chief Operating Officer for HSF Affiliates LLC

To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median- priced home, assuming a 20 percent down payment. Home Affordability Index NAR 8/2013

“The rise in the renter population with no net increase in the owner population at a time of housing recovery automatically means greater unequal distribution of wealth. Housing wealth is rising because of price increases, but the wealth is going to the fewer and fewer households who happen to be homeowners and those who own more than one home.” Lawrence Yun, Chief Economist of the National Association of Realtors NAR 8/2013 Family Wealth