2015 Mid-Year Real Estate Update
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Transcript of 2015 Mid-Year Real Estate Update
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WHERE REAL ESTATE IS MOVING WHERE REAL ESTATE IS MOVING
2015 Mid-Year Real Estate Update Rick Sharga Executive Vice President May 20, 2015
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What We’ll Cover Today
• Existing and New Home Sales Trends
• Delinquencies and Foreclosures
• Investor Activity
• Commercial Real Estate Trends
• Closing Thoughts
• Q & A
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WHERE REAL ESTATE IS MOVING
Existing & New Home Trends
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Existing Home Sales Weaker Than Forecast
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Prices Continue to Increase, But Rate of Growth Slowing
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Low Inventory Driving Price Gains
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New Home Sales Improving, Still Far Off Peak Levels
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New Home Inventory Still Near 40-year Low
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Housing Starts Continue to Lag
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And Are Still Skewed Toward Multifamily
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WHERE REAL ESTATE IS MOVING
Foreclosures: The End is (Finally) Near
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Delinquent Loan Backlog is Shrinking
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And US Foreclosure Activity Decreasing Rapidly
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Majority of Loans in Foreclosure are Pre-2010 Vintage
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And 77% of Delinquent Borrowers are Underwater
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But Negative Equity Trends are Improving
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And Largely Concentrated in a Few States
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WHERE REAL ESTATE IS MOVING
Investor Activity
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Investor Purchase Prices Moderating in All Regions
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Price to Appraisal Ratio Moderating – Lowest Since Q4 2010
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Price-to-Appraisal Ratio Declining in Most Metros
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Most Live Event Investors Choose to Flip Properties
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While Most Online Investors Prefer Holding to Rent
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South & West Regions Offer Best Investing Prospects
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Top 5 Hottest Metro Areas in the US
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WHERE REAL ESTATE IS MOVING
Commercial Market Overview
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Commercial Sales at Highest Levels Since Recession
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And Prices Continue to Rise in All Sectors
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Risk Premiums May be Nearing Cyclical Peak
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And Cap Rates Fall Below 10-Year Averages
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WHERE REAL ESTATE IS MOVING
Closing Thoughts
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What’s in Store for the Rest of 2015
• Residential market may show marginal improvements over 2014:
» Existing home sales between 4.9-5.1 million units
» Existing home prices appreciate between 4.5 - 5.5%
» Access to credit still tight, and interest rates likely to increase slightly
• New home sales will improve slightly as well
» Sales between 450,000 – 500,000 units
» Unlikely to see much entry level inventory
• Foreclosure activity nearing pre-crisis levels
• Commercial recovery outpacing residential
» Capital ahead of fundamentals in some markets/sectors
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WHERE REAL ESTATE IS MOVING
Rick Sharga Executive Vice President Auction.com [email protected] Follow me on Twitter: @ricksharga