Monthly Survey of Real Estate Agents April 2016

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1 ly Survey of Real Estate Agents April 216 Research Analysts Michael Dahl Homebuilding & Building Products Our was up 4 pts sequentially to 53 in April, indicating traffic just above agents' expectations. Agents highlighted stronger spring demand, supported by favorable rates. Matthew Bouley matthew.bouley@credit-suisse.com Anthony Trainor anthony.trainor@credit-suisse.com <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations Home prices continue to increase as sellers take advantage of the tight inventory envionrment, improving demand trends and low mortgage rates. <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior May 9 th, 216 Source: Credit Suisse DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. CREDIT SUISSE SECURITIES (USA) LLC

2 April Survey of Real Estate Agents: Growing Spring Traffic Faced With Still-Lim ited Inventories Spring Traffic Advances with Demand Outpacing Supply: Our rose to 53 in April from 49 in March, suggesting traffic remained in-line with agents expectations. Our Weighted Traffic was +2 pts m/m. Agents highlighted strengthening spring demand met with persistently tight inventory, making competitive multiple-offer situations commonplace in many markets, and contributing to widespread price appreciation. Sellers remain elusive, likely given the lack of available product to trade up to, though in a few places agents observed a marginal loosening in supply. Markets with typically high international demand continued to see depressed foreign buyer activity. In terms of price points, agents cited consistently slower demand for high-end property in several markets. Regionally, Florida experienced a strong sequential increase (still below expectations), the Pacific Northwest was flat at high levels, the Southwest and Midwest saw healthy improvement, while California and Texas were up modestly with Houston traffic continuing to edge higher (though still weakest in the state). NYC remained weak. More Markets Beating Expectations: In April, 17 of the 4 markets we survey saw higher than expected traffic (14 in Mar.), 11 saw traffic in-line (11 in Mar.), and 12 saw lower than expected traffic (15 in Mar.). California edged up closer to the average, led by improvement in SF and Sacramento, though L.A. and the Inland Empire pulled back. In TX, Dallas was flat while Austin and San Antonio declined slightly, and Houston improved. Seattle and Portland softened a touch but remained very strong. Each FL market improved from March though the state remained the weakest region. NYC edged further below expectations. Broad Price Gains: Our Price increased 4 pts. m/m, continuing to indicate broad gains. Of the 4 markets we survey, 36 saw higher prices (36 in Mar.), 4 indicated flat prices (2 in Mar.), and none saw lower prices (2 in Mar.). Agents observed price gains driven by the seasonal escalation in demand against tight inventories across markets. Prices accelerated in several Southeast markets, while markets including Dallas, Portland, Raleigh, Sacramento, and Seattle were robust. Houston rebounded to flat sequentially after 6 straight months of declines. Buyer Traffic Home Price Source: Credit Suisse Home Listings Time to Sell Weighted Traffic Weighted Price Change (1.1) % 31% 47% How Do the Recent 3 Days Compare to the Prior 3 Days... 63% 7 42% 37% 29% 18% 2 9% 12% s s Slide 2

3 Table of Contents Key Housing Markets: Key Housing Markets Continued: 4 Atlanta, Georgia 26 New York-Northern New Jersey 5 Austin, Texas 27 Orlando, Florida 6 Baltimore, Maryland 28 Philadelphia-Southern New Jersey 7 Boston, Massachusetts 29 Phoenix, Arizona 8 Charleston, South Carolina 3 Portland, Oregon 9 Charlotte, North Carolina 31 Raleigh, North Carolina 1 Chicago, Illinois 32 Sacramento, California 11 Cincinnati, Ohio 33 San Antonio, Texas 12 Columbus, Ohio 34 San Diego, California 13 Dallas, Texas 35 San Francisco, California 14 Denver, Colorado 36 Sarasota, Florida 15 Detroit, Michigan 37 Seattle, Washington 16 Fort Myers, Florida 38 St. Louis, Missouri 17 Houston, Texas 39 Tampa, Florida 18 Inland Empire (Riverside-San Bernardino), California 4 Tucson, Arizona 19 Jacksonville, Florida 41 Virginia Beach, Virginia 2 Kansas City, Missouri 42 Washington, D.C. 21 Las Vegas, Nevada 43 Wilmington, North Carolina 22 Los Angeles, California Appendix: 23 Miami, Florida 45 Historical Trends by Market 24 Minneapolis, Minnesota 5 Agent Recommendations 25 Nashville, Tennessee 52 Survey Methodology Slide 3

4 Atlanta, GA Buyers are Looking but Want to See More Inventory The inventory is moving very briskly, still not much to choose from. (19,885 single-family building permits in 215, 3 rd largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior Lack of quality listings, market is overpriced in many areas. Listing prospects are wanting to go out and see homes before they decide to list. Buyers are finally ready to buy and inventory is low. Buyers realize they will lose out to multiple offer situations if they are not looking and ready to make a move immediately. There are no motivators for buyers. Buyer traffic dipped in April, returning to levels indicating trends were in-line with agents expectations. Our index came in at 54 this month from 71 in March. Broadly, agents pointed to healthy levels of buyer interest but continue to see the lack of inventory limiting activity. Some felt that this supply-demand imbalance also pushed pricing too high in some areas. Prices rose in April, as our Price came in at 86, unchanged from March, still well above a neutral 5. Home listings edged higher in April, while agents indicated the time needed to sell was shorter this month Point Change (17.9). 3.8 (17.9) (7.1) 14% 64% 22% How Do the Recent 3 Days Compare to the Prior 3 Days... 71% 29% 54% 46% 7% 5 43% s s Slide 4

5 Austin, TX Relocation Buyers Support Demand and Drive Prices Higher New job creation continues to drive the influx of new residents to the market. Our sales have increased dramatically this month. (11,574 single-family building permits in 215, 8 th largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior More inventory/selection, low interest rates, relocations. Lack of inventory is still the biggest problem. Limited supply of inventory, driving prices upward and more compared to other central Texas cities. Lack of Inventory and qualified buyers. Low inventory. Traffic was in-line with agents expectations in April, as our came in at 55, down slightly from the March level of 58. Most agents highlighted the lack of inventory restricting activity. On the other hand, agents were encouraged by the steady flow of relocation buyers and favorable mortgage rates. Most agents saw higher home prices in April, with our Home Price rising to 91 (from 81 in March). Inventories and the time needed to sell still were roughly unchanged in April Point Change (3.1) (.4) (3.1) 9% 73% 18% How Do the Recent 3 Days Compare to the Prior 3 Days... 82% 18% 36% 64% 18% 55% 27% s s Slide 5

6 Lack of inventory in the market. Weather was not helpful this month. Baltimore, MD Traffic Drops to Below Expectations (4,588 single-family building permits in 215, 34 th largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior Spring market started early and now is beginning to fade. I get the feeling we'd be busier if there were some loosening in credit and more inventory. Buyer traffic fell sharply in April with our index coming in at 38 from a 57 in March, falling to a reading of below agents expectations. In addition to poor weather, multiple agents noted low inventory levels negatively impacted demand. Stronger transaction activity in February/March drove some of this (pulled spring activity forward). Prices were higher again in April, with the index landing at 75 vs. 83 in March. Inventories were slightly higher this month, while the time needed to sell was shorter in April Point Change (19.6) (8.3). (12.5). 5 25% 25% How Do the Recent 3 Days Compare to the Prior 3 Days s s Slide 6

7 Boston, MA Tight Inventory Keeps Driving Price Higher; Buyer Resistance Growing Mild weather. Low inventory and lower interest rates. (4,779 single-family building permits in 215, 32 nd largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior I believe some buyers are beginning to falter, relative to the recent price appreciation. Prices are going crazy high. Low inventory continues to impede sales. Worry about the economy slowed buyer flow. 2 years of pent-up demand creates many multiple offer situations. Like March, April buyer traffic was close to agents expectations, as our index came in at 46 vs. 47 last month. The lack of inventory remains top of mind to agents, with many seeing this prevent sales activity and drive pricing even higher. Some felt the recent pricing gains were pushing buyers out of the market too. Prices rose again sequentially with our coming in at 76 in April vs. 78 in March. Listings were unchanged sequentially, while the time needed to sell shortened a bit Point Change (1.2) (2.).3 (12.5) 3. 23% 14% 63% How Do the Recent 3 Days Compare to the Prior 3 Days... 57% 39% 4% 87% 13% 13% 48% 39% s s Slide 7

8 Charleston, SC Traffic Disappoints Again on Missed Out of Town Shoppers (4,52 single-family building permits in 215, 35 th largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior Very few out of town buyers have come this spring. No one knows why. Very unusual. Not many Northeast buyers, maybe better weather. Low in inventory. Slower until school closes. Disappointing traffic trends continued into April with our Buyer Traffic coming it at 25 this month, 6 points lower than March. Agents attributed the softness seen this month and recently to the lackluster demand from out of town shoppers. Others expressed that the lack of inventory was a challenge to activity. Home prices were broadly higher again as our came in at 75 in April from 83 in March. Agents indicated fewer home listings in April, which likely supports pricing near-term Point Change (6.3) (8.3) (1.) How Do the Recent 3 Days Compare to the Prior 3 Days... 67% 17% 17% 25% 75% s s Slide 8

9 Charlotte, NC Traffic Pulls Back to Below Agents Expectation; Price at 1 Buyers fearing higher prices later in the year. Lack of quality inventory for buyers to look at. Pricing getting too high. Market keeps trending higher. (11,742 single-family building permits in 215, 7 th largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior Traffic took a step back in April, with our slipping 17 pts m/m to 4. Agents cited the lack of inventory as the primary cause. Pricing was also frequently discussed this month, with some agents seeing this push buyers out of the market, while others felt this motivated some to beat anticipated increases later in the year. Our jumped to 1 this month (vs. 86 in March), with all agents indicating rising prices sequentially. We expect pricing to continue to rise, given the favorable readings in both our Listings and es Point Change (17.1) How Do the Recent 3 Days Compare to the Prior 3 Days s s Slide 9

10 Chicago, IL Favorable Rates and Weather Lift Traffic to Neutral, but Buyers Want More Selection (7,577 single-family building permits in 215, 17 th largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior Pent up demand for new housing / low inventory of existing homes. Interest rates at lowest level this year. Spring came early here and so the number of buyers may be lower right now but it was higher early on in the season. Shortage of listings. Shortage of rentals and for sale properties. Sellers are slow to enter the market. Weather has warmed up, getting buyers out. Buyer traffic improved from March, with levels rising back to meet agents expectations. Our index rose to 5 in April from 39 last month. Agents noted that better weather and favorable mortgage rates helped bring some buyers out to look, but still highlighted the lack of inventory, noting buyers frustration with selection and that this limited transactions. Home prices increased again April, with our rising to 62 from 65 in March. Both listings and the time needed to sell lengthened a bit, which could curb price growth near-term Point Change 1.9 (2.6) (3.6) (1.2) (18.4) 25% 5 25% How Do the Recent 3 Days Compare to the Prior 3 Days... 43% 38% 19% 16% 79% 5% 38% 38% 24% s s Slide 1

11 More seekers than sellers. Cincinnati, OH Buyers Active but Still Want More Selection (3,481 single-family building permits in 215, 45 th largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior Seems as though there are plenty of buyers, but still not enough listings. Some buyers are getting tired of the process and discouraged about finding what they want. More inventory and low interest rates. Good interest rates. However, inventory is low. Buyers are confident and interest rates are still low. The homes that are available are in multiple offers almost every time if they are priced right due to lowered inventory levels. Strong buyer traffic continued into April, with our index landing at 71 (vs. 88 in March), still well above expectations. Agents indicated low mortgage rates and improved buyer confidence continue to support traffic levels. This, combined with lack inventory, led to more multiple offer situations and higher home prices. For the second consecutive month our price index came in at 1, indicating all agents saw higher prices sequentially. Broadly agents cited less time needed to sell a home, signally strong demand and likely supports price growth near-term Point Change (16.1). 5.4 (33.3) (14.3) 29% 14% 57% How Do the Recent 3 Days Compare to the Prior 3 Days % 14% 29% 71% s s Slide 11

12 Columbus, OH Traffic and Price Spike on Strong Spring Buyer Trends (3,421 single-family building permits in 215, 47 th largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior Limited inventory in $15, - $25, range in most parts of town. However, nearly immediate sales occurring on new listings at those prices. Traffic continues to be on the rise, due to low inventory, somewhat stable rates and spring time buyers. High buyer turnout at open houses. Low inventory. Buyer traffic improved and came in further above agents expectations in April, as our Traffic increased to 9 from 61 in March. Agents saw strong buyer turnout at open houses, in-part helped by favorable mortgage rates. Sparse inventory remains an issue though, especially in the $15-25k price range. Our Price also spiked this month, landing at 1 vs. 72 in March. Agents noted more listings coming to market and a quicker time to sell in April Point Change (41.1) How Do the Recent 3 Days Compare to the Prior 3 Days s s Slide 12

13 Dallas, TX Job Growth Continues to Drive Demand, though Lack of Inventory is an Issue (28,363 single-family building permits in 215, 2 nd largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior In addition to the corporate relocation buyers we have seen for many months, the local Spring buyers are out early. New business coming into the area. Corporate moves. I specialize in entry level homes (under $25K) so the lack of inventory and higher home prices have impacted my business tremendously. Best job market in nation. Lots of people moving here but inventory extremely low, multiple offers on anything. Traffic remained in-line with agents expectations in April, as our was unchanged at 5 vs. March. Most agent comments suggested the strong local employment market has created a sufficient amount of buyer demand in the market, but there aren t enough good listings to go around, driving prices higher. Home prices continued to march higher in April, as our Home Price landed at to 83, well above a neutral 5. The length of time needed to sell decreased and inventory levels edged lower, suggesting more pricing growth near-term Point Change. (8.3) % 67% 16% How Do the Recent 3 Days Compare to the Prior 3 Days... 83% 83% 33% 17% 17% 67% s s Slide 13

14 Denver, CO Traffic Steady and Above Expectations, with Prices Marching Higher (9,288 single-family building permits in 215, 11 th largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior Employment increases, companies moving people here. Increased rents make home buying attractive. The low supply is keeping them in the hunt for an extended period of time due to competition for the same house. Many times buyers are writing 5-8 offers before we get one. I think in general some first time homebuyers may be discouraged by prices and lack of homes available. Low interest rates, lack of inventory. There is a huge shortage of inventory. Traffic remained above agents expectations in April, as our Traffic landed at 65 little changed vs. 67 in March. Agents highlighted how more jobs, rising rental rates and low mortgage rates helped demand. Still, the lack of inventory is an issue, driving greater competition. This challenge was most sever in the first-time buyer segment of the market. Price gains were broad-based in April as our Price increased to 92 from a still-strong 84 in March. Listings edged lower vs. March, while the time needed to sell was a bit shorter, both favorable for pricing Point Change (2.) 7.5 (2.8) (7.3).9 47% 12% 41% How Do the Recent 3 Days Compare to the Prior 3 Days... 83% 17% 11% 83% 6% 67% 33% s s Slide 14

15 Detroit, MI Traffic Okay but Limited Inventory a Growing Challenge to Transactions Low inventory hindering activity somewhat. Low rates, improved weather, improved job outlook. (5,197 single-family building permits in 215, 26 th largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior Nice market if you are a seller, harder if you are a buyer, for the selection is quickly picked over; local economics are good. Great traffic with multiple offers. Agents are fighting over every well priced home. New housing starts on the up swing. Not much to sell. Buyer traffic was just below agents expectations in April, as our index came in at 46 down 7 points vs. March at 53. Agents credited better jobs and favorable mortgage rates for the solid trends. More agents highlighted the challenges with limited supply this month, noting how it is hindering transactions, and leading to more multiple offer deals. Broad based pricing gains were seen again in April, with our index landing at 92 vs. 73 in March. Near-term we expect pricing to continue to move higher, given the strong readings in our Listings and es Point Change (7.2) 18.3 (3.6) % 62% 15% How Do the Recent 3 Days Compare to the Prior 3 Days... 83% 1 17% 25% 8% 67% s s Slide 15

16 Ft. Myers, FL Traffic Picks up Sequentially but Still Disappointing; Pricing Gains Resume Low inventory. (3,814 single-family building permits in 215, 39 th largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior Great priced homes on the market and most of them did not move. More sellers start to drop the prices. Perhaps higher stock market will help buyer confidence. Less confidence in the financial markets. Low inventory and higher prices. Traffic was less spotty than in Jan and Feb. Snow birds going home. Buyer traffic was weak in April, though better than the anemic trends seen since the start of the year. Our rose 14 points to 36 this month, though still below agents expectations. Agents cited headwinds from lack of buyer confidence and low inventory. Agents were spilt on if the improving stock market helped demand. Our bounced back this month, landing at 64 and suggesting modest price growth. Listings were flat sequentially in April, while more time was needed to sell a home Point Change (.9) 6.3 (11.9) 57% 29% 14% How Do the Recent 3 Days Compare to the Prior 3 Days... 57% 14% 29% 29% 57% 14% 57% 43% s s Slide 16

17 Houston, TX Traffic Closer to Neutral but Still Sluggish; Pricing Flat After 6 s of Declines Oil price slump continues to disrupt home sales in west Houston. Market feels surprisingly normal. (36,662 single-family building permits in 215, largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior Massive flooding in Houston, which will probably have an impact on sales for the next several weeks or more. Despite the oil woes in Houston, the market is actually holding up fairly well. Low oil prices causing layoffs. More traffic in the lower end up to the very low $3K's. First time homebuyer still stepping up! Our moved closer to a neutral reading with the April coming in at 42 from 32 in March. Layoffs in the energy sector continue to pressure trends (most notably in the western corridor), though stronger demand for lower priced homes was a helpful offset. Some noted the negative impacts of recent flooding on sales activity. Pricing was stable in April, an improvement following 6 months of decline. Price at 53. Weak readings were seen in our and Time to Sell es, which should prevent price growth near-term Point Change (12.1) (2.3) (.6) 31% 16% 53% How Do the Recent 3 Days Compare to the Prior 3 Days... 21% 63% 16% 53% 47% 53% 42% 5% s s Slide 17

18 Inland Empire, CA Economic Caution, Difficult Financing, and Rising Prices Drive Traffic Lower (7,222 single-family building permits in 215, 19 th largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior Pricing outpacing income. Low FHA loan limits in the most affordable part of SoCal making sales more difficult. Low inventory and high prices are limiting buyers purchases. Economic caution. Not a lot of inventory. Demand took a step backwards in April, as our Traffic declined to 33 from 44 in March. Agents highlighted several headwinds including a difficult financing environment driven by low FHA limits. General economic caution was also observed, while escalating price levels for available inventory was further seen as diminishing affordability and pressuring traffic. Home price appreciation was higher in April relative to March, as our increased to 68 from 63 last month. Home inventories rose again in April and the time to sell lengthened, indicating price appreciation may moderate Point Change (1.4) 5.7 (9.1) % 8% How Do the Recent 3 Days Compare to the Prior 3 Days... 45% 45% 9% 18% 82% 45% 36% 18% s s Slide 18

19 Jacksonville, FL Healthy Out of State Traffic Offsets Modest Spring Demand (7,242 single-family building permits in 215, 18 th largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior Homes are sitting on the market though certain price ranges are flying off the shelves. Inventory is tight with not much new coming on the market. Not a typical Spring market, seeing lots of open houses, buyer traffic less than expected. Traffic from both business and retirees. Buyer traffic came up slightly in April and was in-line with agents seasonal expectations. Our level of 5 rose from 43 in March. Agents see continued demand from out of state though noted mixed trends depending on the price range. Ultimately, a lack of affordable supply and generally light demand are keeping spring trends modest. Home prices were unchanged this month with our index level at 5. This follows appreciation seen in the prior three months. Home listings declined in April while the time needed to sell was largely unchanged vs. the prior month Point Change 7.1 (25.) (3.6) 2. (14.3) How Do the Recent 3 Days Compare to the Prior 3 Days s s Slide 19

20 Lack of homes in certain price ranges. Very slow on upper bracket. Housing shortage. Low inventory. Kansas City, MO Prices Continue to March Higher; Traffic Bounces Back (4,547 single-family building permits in 215, 36 th largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior While trends have been choppy in recent months, traffic bounced back in April to above agents expectations. Our rose to 63, up from 25 in March. The majority of agents discussed the tight supply, though saw it helping drive better traffic per listing. High-end trends lagged this month. Prices were higher again in April, with our Price rising to 88 vs. 75 in March. The time needed to sell a home was a bit longer in April, while the listing were seen flat vs. March Point Change (5.) (62.5) 25% 25% How Do the Recent 3 Days Compare to the Prior 3 Days... 75% 25% 75% 5 25% 25% 25% s s Slide 2

21 Las Vegas, NV Traffic Improves to Normal Seasonal Levels; Pricing Continues to Push Higher People moving into Nevada. Low interest rates, lots of inventory. Job growth. Prices increasing. (7,798 single-family building permits in 215, 16 th largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior Escalating base pricing in new construction. Pricing not affordable for the typical median income purchaser. Low inventory in entry level price points. Increase in pricing in new home developments. Buyer traffic was in-line with agents typical April expectations though improved from March, as our rose to 5 from 38. Inbound buyers from out of state, low rates, and generally available inventories were all cited as boosting traffic. A few agents, however, pointed out elevated price levels particularly in new construction as hampering affordability and traffic. Home prices continued to consistently march higher this month. Our of 65 was roughly flat vs. last month. Home inventories rose very slightly in April, though the time needed to sell still shortened Point Change 12.5 (1.3). (4.2) % 54% 23% How Do the Recent 3 Days Compare to the Prior 3 Days... 46% 38% 15% 75% 25% 23% 38% 38% s s Slide 21

22 Los Angeles, CA Traffic In-Line with Expectations but Several Factors Still Pressuring Demand (8,458 single-family building permits in 215, 15 th largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior Rates are lower and people want to buy before they rise. Supply is too low to meet the high demand. Increasing listing inventory, still tight. Price resistance, inventory building with great properties but little/no action. Buyers insecure and many not able to qualify for financing. Very low inventory, especially below $1 mln. Unfortunately not enough inventory but more than before. Buyer traffic was little changed in April at levels generally inline with seasonal expectations. Our fell to 48 from 52 in March. Low rates and a slight loosening of inventory are helping demand, however, many agents are still seeing economic caution, slowing foreign demand, low affordable inventory, and a difficult mortgage financing environment. Our Price moved up again in April, with our index accelerating from 83 from 75 last month. Home listings were mostly unchanged though may have rose a touch in April, while the time to sell quickened a bit Point Change (3.7) 7.8 (6.3) 1.8 (5.4) 31% 41% 28% How Do the Recent 3 Days Compare to the Prior 3 Days... 72% 21% 7% 13% 71% 17% 21% 43% 36% s s Slide 22

23 Miami, FL Absent Foreign Demand and Lofty Prices Keeping Traffic Lackluster Lack of confidence in the economy and impact from reduced offshore buyers. (7,12 single-family building permits in 215, 21 st largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior Low inventory of good affordable listings making it very difficult for buyers. Sky high pricing combined with declining demand from overseas. Locals are buying again. Fewer Latin American buyers. Unrealistic prices. Fear that interest rates may rise. Traffic ticked higher but remained lower than expected in April, with our of 33 up from 2 in March. Persistently elevated pricing with little sign of demand from foreign buyers is keeping traffic levels choppy. Many potential sellers appear unwilling to budge on prices. A few agents, however, noted buyer activity supported by the low interest rate environment. Home prices rose slightly in April but far from broad-based appreciation, as our index rose to 55 from 52 last month. Home listings rose in April and the time to sell lengthened, indicating price growth is likely to remain muted Point Change (2.3) (6.3) % 1 47% How Do the Recent 3 Days Compare to the Prior 3 Days... 43% 33% 23% 5 39% 11% 62% 17% 21% s s Slide 23

24 Minneapolis, MN Traffic Continues its Rebound with Favorable Economics Supported by Low Rates Low interest rates, low unemployment. (6,786 single-family building permits in 215, 22 nd largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior Continued low interest rates; concern they may rise. Lack of inventory is pressing buyers to act faster. Low unemployment, low gas, low rates, warmer weather. Buyers are trying to get a good home but having to deal with multiple offers, as inventory seems lower than needed. Relocations, upsizing. Less properties for sale driving less marketing, less opens, and less overall traffic looking for homes. Traffic continued to improve in April following the spike in March, as our index rose to 67 from 6, indicating traffic nicely above agents expectations. The low rate environment combined with healthy local employment continues to support traffic. Inventory is very tight, however, which in some cases is driving urgency, in other cases causing buyer fatigue. Home price growth was strong in April, as our accelerated to 92 from 75 in March. Inventories shrunk while the time to sell shortened, both suggestive of further price appreciation to come Point Change (3.1) % 42% How Do the Recent 3 Days Compare to the Prior 3 Days... 85% 15% 38% 38% 23% 23% 8% 69% s s Slide 24

25 Nashville, TN Local Economic Strength Driving Healthy Demand and Accelerating Prices Fast growing Nashville economy; Inventory is low. (1,813 single-family building permits in 215, 9 th largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior The housing market is very hot in this area. Buyers wanting to buy, but inventory continues to be tight. Prices continue to rise in for entry-level homes and early move-up homes. Clients downsizing. Buyer traffic came in above agents seasonal expectations in April, as our jumped to 58 from 5 last month. Demand in Nashville continues to be driven by a healthy local economy, which in turn is driving competition for available inventory. Demand for smaller homes, whether from first-timers or buyers downsizing, was seen as particularly strong this month. Home price appreciation accelerated in April, as our Price of 92 indicated broad-based price growth. Price appreciation looks likely to continue has home listings shrunk while the time needed to sell quickened in April Point Change (8.3) % 5 33% How Do the Recent 3 Days Compare to the Prior 3 Days... 83% 17% 67% 33% 17% 83% s s Slide 25

26 New York-Northern NJ Economic Caution Keeping Cap on Traffic Levels (1,749 single-family building permits in 215, 1 th largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior Jobs are difficult to find and pay raises non existent. Unusually limited inventory and high prices may be discouraging buyers. High end market is a disaster. Shaky stock market. Unemployment, lack of job security. Backlog of buyers for new properties that come to market. More properties on the market. Priced well, in good condition. Traffic slipped in April from March, with our Traffic edging lower to 36 from 39. Agents continue to see buyer trepidation driven by job insecurity and lingering effects from stock market volatility earlier in the year. New quality inventory, however, has been met with demand and multiple offers, with many buyers looking to act as interest rates remain low. Price growth accelerated slightly in April, as our rose to 66 from 62 in March. Home listings were unchanged from last month, however the time needed to sell a home shortened Point Change (3.1) % 1 52% How Do the Recent 3 Days Compare to the Prior 3 Days... 48% 35% 67% 16% 15% 19% 26% 23% 52% s s Slide 26

27 Orlando, FL Inching Higher But Still Below Expectations (12,328 single-family building permits in 215, 6 th largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior Demand for homes has outweighed the available inventory for quite a while. Rising rents, low interest rates. Spring buyers from up north and low interest rates. Stable activity in the resale market but strong demand for new homes. Lack of inventory. Worried buyers. Higher prices reducing traffic. Traffic trends rose just slightly in April as our landed at 43, up from 41 in March, though it remains a touch below agents seasonal expectations. The low rate environment appears to be the biggest reason behind improvement. However, elevated prices and a lack of available inventory continue to pressure the overall levels of traffic. Home prices edged higher again in April, as our Price rose to 65 from 6 in March. Both home listings and the time to sell index were largely unchanged in April from levels in March Point Change (7.7) (3.8) % 14% 57% How Do the Recent 3 Days Compare to the Prior 3 Days... 46% 38% 15% 69% 23% 23% 8% 54% 23% s s Slide 27

28 Philadelphia, PA-Southern NJ Demand Holding Up In Spite of Economic Caution Finally seeing some new listings. Buyers are out in full force. Spring weather & good interest rates. (6,499 single-family building permits in 215, 23 rd largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior First-time buyers fearing rising prices and interest rates may have caused part of the increased traffic. Corporate layoffs hurting confidence. Potential buyers having trouble accessing financing. Good weather. Economic uncertainty. Traffic advanced in April as our increased to 58 from 45 last month. Agents noted several conflicting trends this month, with the traffic improvement supported by new inventory and first-time buyer urgency. However, some agents noted economic caution given local layoffs and a difficult financing environment. Home price growth recovered in April, as our rose to 63 from 5 last month, the strongest level since last August. Home inventories shrunk slightly this month and the time needed to sell a home quickened Point Change (9.1) % 33% 42% How Do the Recent 3 Days Compare to the Prior 3 Days... 33% 58% 8% 82% 18% 17% 42% 42% s s Slide 28

29 Phoenix, AZ Traffic Improves as Weaker Luxury Trends Offset by Strength Below $3K Luxury market is pretty dismal in sales. Homes below $3K lead the market. (16,94 single-family building permits in 215, 4 th largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior The lower price range is currently on fire; Multiple offers in one to three days. More first time homebuyers coming into the market so houses priced under $3K are selling extremely well. The upper end of the luxury market continues to be soft. Lack of Canadian buyers in the second home market. Extreme caution, slow to make commitments to buy. ticked higher but remained a touch below agents seasonal expectations, as our index rose to 43 from 27. Agents widely highlighted bifurcation in the market with strength at lower price points and softness at higher price points and luxury homes. Some agents also saw buyers express economic caution, while the Canadian buyer remains largely absent. Home prices were again unchanged in April, as our index landed at 5 for the second consecutive month. Home listings were largely flat in April though the time to sell lengthened, suggesting home price growth remains sluggish Point Change (5.5) 29% 14% 57% How Do the Recent 3 Days Compare to the Prior 3 Days... 24% 52% 24% 12% 88% 52% 38% 1 s s Slide 29

30 Portland, OR Buyer Activity Consistently Strong and Competitive (7,128 single-family building permits in 215, 2 th largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior Home prices continue to escalate; buyers want to purchase with fear that homes may cost more down the line. Good weather; Our city is bursting with people moving here and a shortage of inventory. No inventory. Many sellers don't want to sell because the buyer market is so competitive that they are afraid they won't find a place. Buyer traffic remained strong in April though cooled just slightly relative to March, as our came in at 75 from 8 last month. A strong local economy and continued influx of buyers into Portland is keeping demand healthy, with urgency growing given rising prices. The buyer market remains extremely competitive for available inventory. Prices rose in April, as our of 9 was down from 95 but still indicated widespread price appreciation. Prices appear likely to continue to rise as home listings shrunk further while the time needed to sell quickened vs. last month Point Change (5.) (5.) How Do the Recent 3 Days Compare to the Prior 3 Days % 33% s s Slide 3

31 Raleigh, NC Traffic Comes Back Amidst Short Supply, Forcing Prices Higher (8,681 single-family building permits in 215, 13 th largest market in the country) Low inventory is keeping many buyers on the sideline. Demand greater than supply resulting in multiple offer situations with bids over asking in properties under $3k. The undersupply of homes for sale is becoming severe - multiple buyers are having trouble buying a home. Market is rebounding. People are feeling comfortable in certain positions and certain areas. Spring. <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior Our rebounded strongly in April, rising to 71 from 4 in March. Agents in Raleigh widely cited persistent issues with low inventory levels, as traffic is running high on available inventory while strong demand is resulting in common multiple offer situations. Accordingly, price growth was seen accelerating during the month. Prices continued to rise in April, as our jumped to 93 vs 8 in March. The time needed to sell quickened further and listings were down from last month, suggesting price growth continues Point Change (.7) (1.4) 57% 43% How Do the Recent 3 Days Compare to the Prior 3 Days... 86% 14% 67% 33% 57% 43% s s Slide 31

32 Sacramento, CA Economic Growth Supporting Improved Traffic while s March Higher (5,174 single-family building permits in 215, 27 th largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior The economy is actually beginning to improve. We weren't this busy in 24 and 25. Interest rates continue to remain low. Extremely low inventories, multiple offer situations, Fed talking about raising interest rates. Fears of interest rate rises this year. Low interest rates and enough decent inventory that is priced at market; buyers getting sensitive to rising prices. Difficulty getting a loan and very low inventory. rose in April and reached the highest level seen since last April, increasing to 65 from 54 in March. A healthy local economy along with some incremental urgency on fears of rising interest rates later in 216 combined to bolster demand. A few agents however highlighted buyer pushback to elevated price levels. Home price growth accelerated in April. Our index increased to 95 from 92, indicating broad price appreciation. Though the time to sell quickened, home listings were seen increasing for the first time since last summer Point Change (39.2) (1.) How Do the Recent 3 Days Compare to the Prior 3 Days % % 13% 1 s s Slide 32

33 Lower inventory in resale market. San Antonio, TX Running at Strong Levels (6,446 single-family building permits in 215, 24 th largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior San Antonio is a major beneficiary of the Texas economy. Spring buying trends. Demand remained solid in April, as our landed at 7 from 75 in March. The usual spring selling activity was boosted by broader favorable trends in San Antonio, as a strong local economy continues to drive demand for limited inventory. Prices continued to push higher though growth decelerated vs. the elevated pace of the past year. Our Price fell to 7 in April from 93 last month, indicating continued price appreciation though at a slower pace. The time needed to sell quickened, however home listings were seen as rising, suggesting pricing growth may moderate Point Change (5.) (22.9) (8.3) (2.) 8.6 How Do the Recent 3 Days Compare to the Prior 3 Days s s Slide 33

34 San Diego, CA Traffic Continues Gradual Upward Trend; Better Demand at Low Price Points (3,253 single-family building permits in 215, 48 th largest market in the country) <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior Healthy balance of good interest rates, slight increase in inventory, and increasing buyer activity. Low inventory. Decent demand. The lower priced properties are selling quickly while the top end of the market has become more stagnant. A lack of quality inventory coupled with a pushback by buyers at these price points. Inventory is very low. Slow before tax time, busy after. Traffic continued to inch higher in April but remained broadly in-line with agent s seasonal expectations. Our Traffic rose to 53 from 5 in March. The low interest rate environment was noted as supportive, while tight inventory appears to be fostering urgency. Agents have notably seen better demand at lower price points with slower trends at higher prices. Home prices pushed higher this month, as our increased to 78 from 73 in March. Home listings were roughly flat from the prior month, though the time needed to sell shortened slightly Point Change (16.1) % 27% How Do the Recent 3 Days Compare to the Prior 3 Days... 56% 44% 7% 86% 7% 38% 38% 25% s s Slide 34