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JP Soltesz August 19th, 2014 Ft. Worth, TX
APSP Industry Summit JP Soltesz August 19th, 2014 Ft. Worth, TX
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Prices rising….well, they were rising…
Case Shiller National + 9% y-o-y + 27% from trough !! (Q1 ‘12) Sources: Case Shiller, Haver Analytics
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Home ownership a luxury purchase?
Sources: Federal Housing Finance Agency, Haver Analytics
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Rates up, then flat, now down
Up recently, but like prices, they have plateaued.
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Markets can withstand rise
Source: Freddie Mac
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Driving housing prices is…
…The yin to demand’s yang
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That monster lurking in the shadows is not as scary as we had expected
‘02-’05 between 4 and 5 months visible. 2 months shadow Source: Core Logic
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Fewer foreclosures 12 month total (In 000) Source: Core Logic
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“all signs show that demand is ready to burst” – 2010
“all signals indicate that demand is ready to pop” – 2011 “all metrics forecast that demand is ready to explode” “no comment” – 2013, 2014
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Same old story…
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Improving equity positions
Driven by prices rising, but also by lower interest rates Discuss here plan for TARP housing dollars – check numbers. =Market Value-Mortgages Source: US Federal Reserve
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Household Formation ‘91-’07, 1.3m Under 400k 09-10.
Why arent HH’s forming? People living at home longer, not getting married, not getting jobs.
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Dateline: June 22, 2014 “It’s Official: The Boomerang Kids Won’t Leave”
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Common Thread: B.A. Degrees
14 profiles Age range 22-30 Total Debt: $636,000 ($45, Average per profile) Common Thread: B.A. Degrees
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In 2005 40% of all student loan debt was held by people under 30
Source: Federal Reserve Bank of New York
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By 2012 only 33% of all student loan debt was held by people under 30
Source: Federal Reserve Bank of New York
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For Millennials, love and marriage don’t go together like a horse and carriage
% married at age 18-32 Source: Pew Research Center
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Youth employment: beast of burden
Through July Sources: US Bureau of Labor Statistics
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Will you still need me, will you still feed me…
c y a n e c t p x e E f L i Source: CDC
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If demand ever kicks in, watch out!
Housing Starts, 10 year averages Room To Grow 60%+ Che On track for just over 1million in 2014 SAAR Sources: US Census Bureau, Haver Analytics
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Still below average and slowing
Permits, completions also down 893 SAAR Sources: US Census Bureau, Haver Analytics
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Freddie Mac Monthly Average Commitment Rate July – 4.13%
Under-rated Freddie Mac Monthly Average Commitment Rate July – 4.13% Active Loan Count Share Up to 4% 4-4.5% 4.5-5% 5-5.5% 5.5-6% 6-6.5% 6.5-7% 7.5+%
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Put TARP back to work 500 450 400 350 Housing 300 Credit Billion 250
Banks 200 Auto 150 AIG 100 50 Obligated Disbursed Cash Back
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Remodeling still growing, less strong
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Something’s fishy Sources: National Association of Home Builders/Wells Fargo Housing Market Index; US Census Bureau
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It’s time we go our separate ways
Sources: National Association of Home Builders/Wells Fargo Housing Market Index; US Census Bureau
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US Economy
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US - Components of GDP 2.3% 2.2% 1.6%
Source: Bureau of Economic Analysis
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Don’t know much about his-toe-ree
Govt expenditures Source: Bureau of Economic Analysis
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What happened next to overall GDP
1937 1955 1993 Contraction in ‘38 2% Growth ’56-57; Contraction in ’58 Contraction in ‘74-75 Growth into tech bubble ??? Source: Bureau of Economic Analysis
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Employment
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6.2 is bad. For an earthquake.
Sources: Haver Analytics, Bureau of Labor Statistics
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But….(there’s always a but)
Non-institutional Population Participation Rate = Labor Force / (Those employed + Those seeking work) (16+)
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Participation rate
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6 consecutive months of 200,000+ jobs added to payrolls
for the first time since 1997 Source: Bureau of Labor Statistics
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Source: Bureau of Labor Statistics
46 consecutive months of growth in payrolls. Since 1939 only a 48 month stretch from 1986–1990 saw a longer period of payroll growth. Source: Bureau of Labor Statistics
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Still haven’t found what they’re looking for
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Coke, Pepsi, or……JOLT?
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Show me the money
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The Chart that Could Have Saved The World
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Home Ownership Rate
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Home Ownership Rate
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Home Ownership Rate 64.8 in Q1
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