Transcript Document

APSP 2014 Industry
Summit
JP Soltesz
August 19th, 2014
Ft. Worth, TX
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
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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
That monster lurking in the shadows
is not as scary as we had expected
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” - 2012
“no comment” – 2013, 2014
Same old story…
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Improving equity positions
=Market Value-Mortgages
Source: US Federal Reserve
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Household Formation
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Dateline: June 22, 2014
“It’s Official: The
Boomerang Kids
Won’t Leave”
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Age range
profiles
22-30
($45,428.57
$636,000
Total Debt:
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…
y
c
n
a
c
e
t
p
x
E
e
Li f
Source: CDC
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If demand ever kicks in, watch out!
Housing Starts, 10 year averages
Room
To
Grow
60%+
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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Under-rated
Freddie Mac Monthly Average
Commitment Rate July –
4.13%
7.5+%
6.5-7%
6-6.5%
5.5-6%
5-5.5%
4.5-5%
4-4.5%
Up to 4%
Active Loan Count Share
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Put TARP back to work
500
450
400
350
Billion
Housing
300
Credit
250
Banks
200
Auto
150
AIG
100
50
0
Obligated
Disbursed
Cash Back
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Remodeling still growing, less strong
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Something’s fishy
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Sources: National Association of Home Builders/Wells Fargo Housing Market Index; US Census Bureau
It’s time we go our separate ways
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Sources: National Association of Home Builders/Wells Fargo Housing Market Index; US Census Bureau
US Economy
US - Components of GDP
1.6%
2.3%
2.2%
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
Contraction in ‘38
1955
2% Growth ’56-57;
Contraction in ’58
1970-73
Contraction in ‘74-75
1993
Growth into tech bubble
2011-13
???
Source: Bureau of Economic Analysis
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Employment
6.2 is bad. For an earthquake.
Sources: Haver Analytics, Bureau of Labor Statistics
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But….(there’s always a but)
Participation
=
Rate
Labor Force /
(Those employed
+
Those seeking work)
Noninstitutional
Population
(16+)
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Participation rate
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6
200,000+
consecutive months of
jobs added to payrolls
for the first time since
1997
Source: Bureau of Labor Statistics
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consecutive months of
growth in payrolls.
Since
1939 48
1986–1990
only a
month
stretch from
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
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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