Historically, housing Leads us into the recession and historically, housing leads us out of the recession.

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1 Institute for Economic Development & Real Estate Research 214 Economic Outlook & Real Estate Forecast Information provided by the LATTER & BLUM Research Division Historically, housing Leads us into the recession and historically, housing leads us out of the recession. Information provided by the LATTER & BLUM Research Division 1

2 Information provided by the LATTER & BLUM Research Division Last Year we looked at where the market was headed? Let s check the typical market phases again & compare to where we were last year Information provided by the LATTER & BLUM Research Division 2

3 Typical Phases of Real Estate Market Phase I PEAK Unit Sales Increasing Prices Increasing Inventory Decreasing Phase II CORRECTION Unit Sales Decreasing Prices Increasing Inventory Increasing Phase III TROUGH Unit Sales Decreasing Prices Decreasing Inventory Increasing Phase IV RECOVERY Unit Sales Increasing Prices Decreasing Inventory Decreasing Typical Phases of Real Estate Market Phase I PEAK Unit Sales Increasing Prices Increasing Inventory Decreasing Phase II CORRECTION Unit Sales Decreasing Prices Increasing Inventory Increasing Phase III TROUGH Unit Sales Decreasing Prices Decreasing Inventory Increasing Phase IV RECOVERY Unit Sales Increasing Prices Decreasing Inventory Decreasing 3

4 Typical Phases of Real Estate Market Phase I PEAK Unit Sales Increasing Prices Increasing Inventory Decreasing Phase II CORRECTION Unit Sales Decreasing Prices Increasing Inventory Increasing Phase III TROUGH Unit Sales Decreasing Prices Decreasing Inventory Increasing Phase IV RECOVERY Unit Sales Increasing Prices Decreasing Inventory Decreasing Typical Phases of Real Estate Market Phase I PEAK Unit Sales Increasing Prices Increasing Inventory Decreasing Phase II CORRECTION Unit Sales Decreasing Prices Increasing Inventory Increasing Phase III TROUGH Unit Sales Decreasing Prices Decreasing Inventory Increasing Phase IV RECOVERY Unit Sales Increasing Prices Decreasing Inventory Decreasing 4

5 Typical Phases of Real Estate Market Phase I PEAK Unit Sales Increasing Prices Increasing Inventory Decreasing Phase II CORRECTION Unit Sales Decreasing Prices Increasing Inventory Increasing Phase III TROUGH Unit Sales Decreasing Prices Decreasing Inventory Increasing Phase IV RECOVERY Unit Sales Increasing Prices Decreasing Inventory Decreasing Residential Markets Inventory vs.. Inventory 5

6 Buyers Market or Sellers Market Sellers Under 3 Months Buyers Over 6 Months 15 Greater New Orleans Area Single Family- Listings vs.. Listings Jan Dec

7 Historic Area Single Family- Listings vs.. Listings Jan Dec Seller s Market New Orleans East Single Family- Listings vs.. Listings Jan Dec Buyer s Market

8 Garden/Uptown Area Single Family- Listings vs.. Listings 1,4 1,2 Jan Dec. 213 Seller s Market 1, West St. Tammany Area Single Family- Listings vs.. Listings Jan Dec /

9 East St. Tammany Area Single Family- Listings vs.. Listings Jan Dec /212 2/213. Tangipahoa Parish Single Family- Listings vs.. Listings Jan. 21 Dec

10 Metairie Area Single Family- Listings vs.. Listings Jan Dec Lakefront/Gentilly Area Single Family- Listings vs.. Listings Jan Dec

11 Kenner Area Single Family- Listings vs.. Listings Jan Dec Ormond Area Single Family- Listings vs.. Listings Jan Dec

12 Laplace Area Single Family- Listings vs.. Listings Jan Dec. 213 Isaac - Effect Luling Area Single Family- Listings vs.. Listings Jan Dec

13 Greater Baton Rouge Area Single Family- Listings vs.. Listings Oct. 212 thru Dec Mississippi Gulf Coast Area Single Family- Listings vs.. Listings Jul. 21 thru Dec

14 NorthShore East and West -2.3% in Inventory +33% in Pended Sales vs. last April 32 NorthShore East and West April 214 is a Neutral market* Home For Sale in April 214: 1549 units. Home Closed in April 214: 311 units. Home Placed under Contract in April 214: 425 units

15 NorthShore East +7% in Inventory +35% in Pended Sales vs. last April 34 NorthShore East Curnt vs.. Prev Month Curnt vs.. Same Month 1 Yr Ago Curnt vs.. Same Qtr 1 Yr Ago Apr. 214 Mar. 214 % Chnge Apr. 214 Apr. 213 % Chnge Feb. to Apr. 214 Feb. to Apr. 213 % Chnge For Sale % % % % % % Pend % % % 35 15

16 NorthShore West -2.3% in Inventory +33% in Pended Sales vs. last April 36 NorthShore West For Sale Curnt vs.. Prev Month Apr. 214 Mar. 214 % Chnge Curnt vs.. Same Month 1 Yr Ago Apr. 14 Apr. 13 % Chnge Curnt vs.. Same Qtr 1 Yr Ago Feb. Feb. to to Apr. Apr. % Chnge % % % % % % Pend % % % 37 16

17 Area by Area March Months Qrt of Invntry Pended 213 vs. 214 E. St. Tammany % W. St. Tammany % Kenner % East Jefferson % Metairie % Lakefront/Gntlly % Board of Realtors or their Multiple Listing Services. Neither the Boards, Associations, nor their MLS guarantees or is in any way responsible for its accuracy. Data maintained by the Boards, Associations or their MLS may not reflect all real estate activity for all years. Area by Area March Months Q1 of Invntry Pended 213 vs Garden/Uptown % New Orleans East % LaPlace % West Bank % River Parishes % Hist. District % Board of Realtors or their Multiple Listing Services. Neither the Boards, Associations, nor their MLS guarantees or is in any way responsible for its accuracy. Data maintained by the Boards, Associations or their MLS may not reflect all real estate activity for all years. 17

18 GNO Median Price $165,. Resale Board of Realtors or their Multiple Listing Services. Neither the Boards, Associations, nor their MLS guarantees or is in any way responsible for its accuracy. Data maintained by the Boards, Associations or their MLS may not reflect all real estate activity for all years. 42 GNO Median Price $218,. New Construction Board of Realtors or their Multiple Listing Services. Neither the Boards, Associations, nor their MLS guarantees or is in any way responsible for its accuracy. Data maintained by the Boards, Associations or their MLS may not reflect all real estate activity for all years

19 GNO Median Price New Construction $218,. Resale $165,. $53,. Premium - 24% Board of Realtors or their Multiple Listing Services. Neither the Boards, Associations, nor their MLS guarantees or is in any way responsible for its accuracy. Data maintained by the Boards, Associations or their MLS may not reflect all real estate activity for all years. 45 Top Expected Influencers 214 Consumer Confidence Jobs - stronger than last year numbers and sentiment Price stability 3 rd year of price increases Mortgage Interest Rates have ticked up, but not substantially enough to curtail the activity. Board of Realtors or their Multiple Listing Services. Neither the Boards, Associations, nor their MLS guarantees or is in any way responsible for its accuracy. Data maintained by the Boards, Associations or their MLS may not reflect all real estate activity for all years

20 Mortgage Rates Trend 1 year Mortgage Rates Trend 3 year 2

21 Mortgage Rates Trend 3 years Top Expected Influencers 214 Consumer Confidence Jobs - will I have one Price stability will I overpay if I act now Mortgage Interest Rates For how long? March 2 th Fed Announced more tapering Continued burn off of excess inventory Board of Realtors or their Multiple Listing Services. Neither the Boards, Associations, nor their MLS guarantees or is in any way responsible for its accuracy. Data maintained by the Boards, Associations or their MLS may not reflect all real estate activity for all years

22 Greater New Orleans Area Inventory Burn Off Months Months Months +1.2% Pended Sales +3.4% increase in Average S.P. Top Expected Influencers 214 Flood insurance - Biggert-Waters Changed by Grimm-Cassidy a good start! Board of Realtors or their Multiple Listing Services. Neither the Boards, Associations, nor their MLS guarantees or is in any way responsible for its accuracy. Data maintained by the Boards, Associations or their MLS may not reflect all real estate activity for all years

23 Top Expected Influencers 214 Shadow inventory Default, short sales, pre-foreclosures, foreclosures 31% decline in distressed mortgages in LA - 7.5% to 5.1% year over year Board of Realtors or their Multiple Listing Services. Neither the Boards, Associations, nor their MLS guarantees or is in any way responsible for its accuracy. Data maintained by the Boards, Associations or their MLS may not reflect all real estate activity for all years

24 Top Expected Influencers 214 Biggert-Waters must be dramatically reformed Grimm-Cassidy a good start! Shadow inventory Default, short sales, pre-foreclosures, foreclosures 31% decline in distressed mortgages in LA - 7.5% to 5.1% year over year Dodd-Frank bill massive over correction Over 3 rules many disproportionately & negatively impact LA Credit scores & loan foreclosures Board of Realtors or their Multiple Listing Services. Neither the Boards, Associations, nor their MLS guarantees or is in any way responsible for its accuracy. Data maintained by the Boards, Associations or their MLS may not reflect all real estate activity for all years. 56 New Orleans, Louisiana Home Rent-to-Mortgage Payment Ratio Median priced home, 1% LTV, 3 year mortgage vs. Adjusted Rent for GNO Under1 is Rents are Cheaper, Over 1 Mortgage payments are Cheaper 24

25 Two Wrong Predictions 1. BP Oil spill will cause a 25% decline in the region s property values 2. Foreclosures will swamp our area and drive down all housing prices for years to come Information provided by the LATTER & BLUM Research Division Potential Disaster Issues for Housing Loss of Home Mortgage Tax Deductibility Elimination of the GSE s (Freddie Mac & Fannie Mae) as Mortgage Financing Market Makers Information provided by the LATTER & BLUM Research Division 25

26 Potential Disaster Issues for Housing Loss of Home Mortgage Tax Deductibility Elimination of the GSE s (Freddie Mac & Fannie Mae) as Mortgage Financing Market Makers Information provided by the LATTER & BLUM Research Division Today Greater New Orleans, Louisiana and the Nation are in the early stages of a housing recovery. Information provided by the LATTER & BLUM Research Division 26

27 Institute for Economic Development & Real Estate Research Thank You. Information provided by the LATTER & BLUM Research Division 27