Understanding Data and Media Communication

1
Understanding Data and Media Communication

• Lawrence Yun, Ph.D.
• Senior Economist, Managing Director of Research
• National Association of REALTORS
• Presentation at NAR Midyear Meetings
• in Washington, DC
• May 17, 2007

2
Media Scare

• NAR was the lead story for CBS, NBC, ABC evening
  news in Fall 2006
• AP Largest Home Sales Decline in 17 years
• Prices are already crashing (2002)
• Economy.com expect worst housing year since
  early 1990s (2001)

3
Cooling National SalesExisting Homes
Sales change in
Source NAR
4
Housing Inventory Raw Count
All-time High
Source NAR
5
Housing Inventory Months Supply
Source NAR
6
Days on Market Fuzzy?
Source NAR
7
Days on Market OK?
Source NAR
8
Home Price Seasonal Fluctuations
Source NAR
9
Jobs in Myrtle Beach
In thousands
Source NAR
10
Price Growth (month-to-month)
Source NAR
11
Price Growth (year-over-year)
Source NAR
12
Income Not Keeping Pace With Home Prices
Income and Price set to Index of 100 in 1990
Source NAR
13
Metro Home PricesModerate to Unsustainable
Widened Gap
Bunched Together
Source NAR
14
Mortgage Obligation to Income Worrisome in the
West

Source NAR
15
Mortgage Obligation to Income Very High in Some
Markets
45 !!!
San Diego
Source NAR
16
Mortgage Obligation to Income Historical High in
Some Markets
Way Above Historical Local Norm
Miami
Source NAR
17
Lexington Mortgage Obligation to Income
Source NAR
18
Past Notable Price Declines All had Job
Losses(mostly in the late 80s or early 90s)
19
Emphasize Job GainsTop Job Creators in 12 months
In thousands
Source BLS
20
New Jobs to Housing Construction

• 1-year, 2-year, 5-year
• Retirees do not have jobs but need housing
• FL, AZ, NV
• Where to get the Data?
• Jobs from U.S. Bureau of Labor Statistics
• Permits from HUD
• All from NAR website (under construction)

21
Net New Jobs in D.C. Region
In thousands
Source BLS
22
New Housing Permits in D.C. Region
In thousands
Source HUD
23
Jobs and Permits
In thousands
24
Ratio Jobs to Permits
25
Record High Debt

• Yes, Record High Debt
• But also, Record High Equity
• Record High Net Housing Equity

26
Housing Valuation and All Debt
trillion
Source Federal Reserve
27
Net Equity (Housing Valuation minus All Debt)
trillion
Source Federal Reserve
28
Net Migration(2000 to 2006)
29
Total Population Increase(2000 to 2006)
30
(No Transcript)
31
International Home Price Growth(1997 to 2005)

• U.S. price growth 74
• ---------------------------------
• Spain 140
• U.K. 150
• Ireland 180

RISKIER MORTGAGE PRODUCTS
32
International Buyer Trend in the U.S. vs. 5
years ago
33
Sub-prime Implosion

• 100 homes in the neighborhood
• 33 homes are owned free and clear
• 77 homes have mortgages
• 67 homes have prime or govt loans
• 10 homes have subprime loans
• 8 are current on payment
• 2 are delinquent
• 1 of the 2 delinquent at most would go into
  foreclosure

34
We need Your Help!

• Feedback on market conditions
• Buyer prospects
• Open house foot traffic
• Listings on the horizon
• Customer tracking survey
• Leave your business card

35
What is the NAR Customer Tracking Survey?

• Web-based questionnaire sent to clients after
  final settlement
• The 20 questions (mostly yes or no answers)
• The timely survey shows you what customers are
  thinking now and measures changes in customer
  satisfaction over time.
• Identify strengths and weaknesses in attaining
  full client satisfaction

36
(No Transcript)
37
(No Transcript)
38
The Goal of the Questions

• Identify attributes most strongly associated with
  customer satisfaction
• Several questions to remind clients the value
  of REALTOR service
• Helps firms training program
• Compare aggregate firm performance vs peers