Monthly Survey of Real Estate Agents June 2014

Transcription

1 ly Survey of Real Estate Agents June 214 Daniel Oppenheim, CFA Homebuilding & Building Products Michael Dahl Patrick Murray, CFA Our fell to 36 in June, further below a neutral 5, as economic and employment concerns, and recent home price appreciation are weighing on buyers' confidence and ability to purchase a home. <5 - Below Expectations; =5 - Meets Expectations; >5 - Exceeds Expectations Despite the lackluster traffic trends seen recently, low inventory levels continue to push home prices higher, as indicated by our coming in at 68 for June. <5 - Lower than Prior ; =5 - Flat vs Prior ; >5 - Higher than Prior July 14, 214 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 June Survey of Real Estate Agents: Buyers Step Back, Discouraged by High Prices Increasing number of buyers fatigued by home price gains as traffic falls again: Our slipped to 36 in June from 39 in May (and 61 in June 213) the most recent levels are below a neutral-5 reading, which indicates traffic is in-line with expectations. Comments from agents in June suggest that buyers are growing increasingly discouraged by economic and employment conditions, and as a result, have made the decision to hold-off on purchases particularly at current prices. Despite the collective let-up in demand, potential buyers that are postponing the purchase for price reasons continue to watch home prices increase, as our indicated sequential gains across nearly all markets in June. However, weak traffic likely indicates reduced price increases ahead. The pockets of strength in traffic were spread out geographically, and although Texas and Florida remain relative outperformers, traffic remains below expectations in both states. Few bright spots from the demand-side at current prices; Texas ex-dallas continues to slide: In June, 32 of the 4 markets we surveyed saw lower than expected traffic (28 in May), 5 saw traffic in-line with expectations (7 in May), and 3 saw better than expected traffic (5 in May). As scarce inventory has driven prices higher, we ve seen the buyers strike expand across most markets, with Dallas now the lone star in the Lone Star State. The other markets exceeding 5 were Columbus (did they know LeBron would be back in OH?) and Fort Myers. The Inland Empire, Washington, San Diego, NY/Northern NJ, and Phoenix were among the weakest markets and all saw levels below 3. Price sensitive buyers are not getting their way in most markets as home price appreciation continues: Our fell to 68 in June from 71 in May, which indicates that agents saw sequentially higher home prices in spite of the lack of buyers. Of the 4 markets we survey, 34 saw higher prices sequentially in June (37 in May), 3 markets saw flat prices ( in May), and 3 saw lower prices (3 in May) Washington DC replaced Tucson as one of the 3 with lower prices, while Phoenix remained in that bucket for the seventh straight month. Incentive Point Change (3.) (2.6) (2.) (6.5) (8.8) Source: Credit Suisse 15% 43% 42% How Do the Recent 3 Days Compare to the Prior 3 Days... 46% 43% 69% 21% % 25% Slide 2

3 Table of Contents Key Housing Markets: Key Housing Markets Continued: 4 Atlanta, Georgia 26 Orlando, Florida 5 Austin, Texas 27 Philadelphia-Southern New Jersey 6 Baltimore, Maryland 28 Phoenix, Arizona 7 Boston, Massachusetts 29 Portland, Oregon 8 Charleston, South Carolina 3 Raleigh, North Carolina 9 Charlotte, North Carolina 31 Richmond, Virginia 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 Las Vegas, Nevada 42 Washington, D.C. 21 Los Angeles, California 43 Wilmington, North Carolina 22 Miami, Florida Appendix: 23 Minneapolis, Minnesota 45 Historical Trends by Market 24 Nashville, Tennessee 5 Agent Recommendations 25 New York-Northern New Jersey 52 Survey Methodology Slide 3

4 Atlanta, GA Inventory Starts to Come Out with Price Gains, but Economy Holds Back Buyers (14,83 single-family building permits in 213, 3rd 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 Lower levels of inventory, along with slight increase of price and the uncertainty of the economy. Buyers are balking at the rapidly increasing asking prices and are becoming frustrated. First-time buyers virtually non existent; luxury high end selling; volume of home sales is way down. Move up buyers can sell but have no equity to buy up. The "feeding frenzy" of buyers seems to be slowing. Lack of inventory. Buyer traffic slowed further in June with our coming in at 28 from 35 in May both reading below a neutral 5 (which indicates traffic in-line with agents expectations). While low inventory remains an issue, the effects appear less acute as price gains and economic uncertainty have become larger issues for potential buyers. Incentives leveled out in June and agents saw prices higher as our came in at 69 vs. 77 in May. Agents saw inventories increase for the first time in three years, while the time to sell was unchanged vs. May. Incentive Point Change (7.2) (7.7) 2.6 (16.3) (8.8) 5 6% 44% How Do the Recent 3 Days Compare to the Prior 3 Days % 13% 6% 88% 6% 38% 31% 31% Slide 4

5 Austin, TX Sellers Start to Come Out, but Pricing Power Remains; Holding Up Market may be softening ever so slightly. Increased inventory in several areas. Hope this continues. Most well priced homes are still moving very quickly. (9,24 single-family building permits in 213, 8th 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 We have a stable economy and over 1 families a day moving to the Austin area. Jobs creation continues to draw more and more new people to the market. Multiple offers within a day or two on attractive properties are becoming the new norm. Buyer traffic fell below agents for the first time this year with our came in at 46 from 54 in May. Employment opportunities continue to bring buyers to the area although the pace may have moderated recently. Despite the lower traffic seen, homes are still moving quickly across the area. Home prices continue to move broadly higher with our Home Price coming in at 91 for June from 92 in May. While Austin remains a seller s market, the price gains in recent months finally began to bring more sellers to market with our Listing coming in at 23 for June from 57 in May. Incentive Point Change (8.4) (1.4) 5.2 (35.) (25.5) 27% 55% 18% How Do the Recent 3 Days Compare to the Prior 3 Days... 82% 18% 64% 64% 27% 27% 9% 9% Slide 5

6 Baltimore, MD Traffic Remains Slow Despite Inventory Pick-Up (4,648 single-family building permits in 213, 3th 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 Severe lack of inventory, continued economic concerns. People catching up after a poor, slow spring. Buyer traffic bounced slightly in June with our hitting 33 from 3 in May. While agents in the area continue to see inventory levels pick-up, the still-low levels are keeping a lid on buyer activity. In addition, some buyers remain hesitant due to economic concerns, while other buyers were moving after thawing out from the winter. Home prices were seen higher sequentially by agents as our came in at 67 from 6 in May. Agents saw the time to sell a home increase in June, while inventory levels continued to rise off of low-levels. Incentive Point Change (6.7) How Do the Recent 3 Days Compare to the Prior 3 Days... 67% 33% % 67% 33% 33% Slide 6

7 Boston, MA Traffic Remains in Check as Sellers Continue to Raise Prices on Still Limited Inventories (4,981 single-family building permits in 213, 28th 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 Overpriced listings are starting to slow the buyer count. Lack of quality affordable inventory. Seems like everyone is sitting tight for the summer. More homes coming on the market. More high end jobs opening up in technology and bio-tech in Boston, which is helping the market. The sold comps have not caught up to the "new" listing prices. Traffic was effectively in-line with agents expectations again in June as our landed at 47 from 46 in May. Agents indicate the buyers are growing frustrated with price gains and are choosing to stay-put instead, although others see employment gains bringing new buyers to the area and upward pressure on prices. Our came in at 57 for June (from 79 in May), which indicates modest price gains in the area. Inventories grew for the first time in two years as the time to sell was flat the combination should slow the pace of HPA. Incentive Point Change.4 (21.9) 2.9 (1.) (6.7) 25% 56% 19% How Do the Recent 3 Days Compare to the Prior 3 Days... 27% 6 13% Slide 7

8 Charleston, SC Traffic Steady in June as s Move Higher Again Better economy. Traffic is typical for this time of year. (3,779 single-family building permits in 213, 34th 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 Buyer traffic hit agents expectations in June with our Traffic holding at 5 (similar to April and May). Agents have seen a pick-up in activity after slower winter months with a better economic outlook being the main driving factor. Home prices continued to rise in June with our Price coming in at 83 vs. 7 in May. The June level indicates broadly higher prices across the area. Most agents saw inventory levels rise in June while the time to sell has remained relatively constant through the first half of the year the steady traffic should help support pricing. Incentive Point Change (13.3). How Do the Recent 3 Days Compare to the Prior 3 Days % 33% 67% 33% 1 Slide 8

9 Charlotte, NC Rates and Employment Concerns Keep Buyers Home (8,792 single-family building permits in 213, 1th 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 Typical slower summer months and slightly higher rates have cooled off sales a bit. Spring/Summer market is good with lower inventories have gotten buyer looking with more urgency. Job concerns have slowed the market down. Traffic took a sharp leg lower in June with our falling to 25 from 5 in May. Comments from agents suggest that the grind higher in interest rates from last year and challenging employment prospects have weighed on traffic levels, while others have seen the low inventory levels continue to drive urgency. Home prices were broadly higher June with our coming in at 83 from a still-strong 8 in May. Prices should remain supported despite the weak traffic as inventory levels contracted from already low levels. Incentive Point Change (25.) 3.3 (15.) 8.3 (1.) How Do the Recent 3 Days Compare to the Prior 3 Days... 67% 33% % 33% 33% Slide 9

10 Chicago, IL Gains Look Vulnerable as Demand Continues to Dry Up The phones have stopped ringing. (7,351 single-family building permits in 213, 13th 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 market has quieted down from a three months ago and making sellers nervous. Still no inventory, traffic is weak and sellers are getting worried and are dropping prices. Lack of inventory, financing problems. Not enough listings. Not a lot on the market leading to multiple offers. Our fell to 28 in June from 37 in May. Agents comments consistently pointed to a lack of demand as opposed to the lack of supply impacting traffic that has been the case in recent months. As a result, more agents are seeing sellers grow nervous and lower prices to spur interest. Despite the continued softness in demand, home prices continue to rise with our coming in at 6 for June from 67 in May. We expect to see a slowing or reversal in the recent HPA given the weak traffic levels and continued rise in inventory levels. Incentive Point Change (9.5) (6.9) (5.4) 52% 7% 41% How Do the Recent 3 Days Compare to the Prior 3 Days... 72% 54% 45% 38% 29% 17% 12% 16% 18% Slide 1

11 Cincinnati, OH Low Inventories Continue to Push s Higher, but Buyers Remain Hesitant (3,287 single-family building permits in 213, 43th 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 Seeing a little more consumer confidence than earlier this year, but buyers are still taking their time and looking at more homes prior to moving forward. We're in a good market; but we seem to have hit a plateau. Low inventory impacting traffic. Our fell to 3 in June from 5 in May as potential buyers have stayed cautious for economic and employment reason, although some comments indicate that confidence is lifting. Agents continue to see the tepid pace in the market as a pause. Home prices were broadly higher in June as our came in at 7 from 78 in May. The recent gains in home prices should remain supported despite the low traffic as inventories resumed their trend lower as the time to sell continued to lengthen. Incentive Point Change (2.) (7.8) (4.4). (7.8) How Do the Recent 3 Days Compare to the Prior 3 Days Slide 11

12 Columbus, OH Low Inventory Drives Some Buyer Urgency, but Remains a Deterrent to Others Buyers are plentiful it s sellers we need. (3,485 single-family building permits in 213, 39th 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 Fewer distressed properties, short sales and retail properties on the market. Low inventory continues. Home sale prices stable. Decent interest rates and fewer listings are creating a more sense of urgency. Low interest rates are helping. Low inventory levels spurred a sense of urgency for some in June as our picked up to 58 from 28 in May. In addition, agents saw still-low interest rates helping demand, and others expect more listings to bring out incremental buyers. Home prices continued to rise in June with our Price coming in at 9 unchanged from May and indicative of broadbased home price appreciation. Prices should continue to gain as the increased traffic is combined with shrinking inventories and a shorter time to sell. Incentive Point Change 3.6. (3.) % 5 33% How Do the Recent 3 Days Compare to the Prior 3 Days Slide 12

13 Dallas, TX s Continue to Rise on Low Inventories and Solid Demand (2,85 single-family building permits in 213, 2nd 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 Prices have risen too much and buyers are sitting on fence to see if they come down. Corporate relocation, declining mortgage rates and a slight inventory improvement provided for a stronger than normal June. Appraisals are coming in above sale prices. Increased values have softened the hard line mentality many appraisers have shown until recently. Buyer traffic bounced back from the measured pace seen in May as our rose to 75 in June from 5 last month. Agents cite a more balanced supply-demand dynamic and strong local economy helping traffic trends, although some buyers have become hesitant following the price gains over the last year (which continue to rise). Home prices were seen higher by all agents surveyed as our Price landed at 1 from 94 in May. Price momentum should continue as demand bounced back and is met with fewer listings and a shorter time to sell. Incentive Point Change (6.3) (25.) (25.) 25% 75% How Do the Recent 3 Days Compare to the Prior 3 Days % 25% 5 5 Slide 13

14 Denver, CO Inventory Issues Starting to Ease at Higher-End, but Buyers Slow to Return (6,971 single-family building permits in 213, 18th 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 Buyers are not out there. The only people moving are the ones that have sold their homes and must move. There isn t a lot of sellers either. Under $4, very active market. Over $5, prices are softening. I think the inventory shortage is starting to ease at higher prices and with some condos, but not really yet with lower priced homes in any area. Still a lack of inventory and some buyer's are getting frustrated not being able to find (or get) a property. Buyer traffic fell below agents expectations in June with our reading 39 from 5 in May. Low inventories continue to limit some buyer activity at lower price points and drive buyer frustration, but higher priced homes have come back quicker and led to some pressure on prices at that segment. Home prices gains were generally broad-based again in June as our came in at 71 vs. 84 in May. The pace of home price appreciation may slow in coming months as inventory levels are picking up, the time to sell has flattened out, and traffic trends have been modest at best. Incentive Point Change (1.7) (12.7) (8.1) (21.4) (18.2) 29% 7% 64% How Do the Recent 3 Days Compare to the Prior 3 Days... 57% 29% 14% 7% 93% 13% 73% 13% Slide 14

15 Detroit, MI Supply Starting to Come Out, but Prices Are Too High for Buyers (5,461 single-family building permits in 213, 26th 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 Buyers are getting nervous with the prices seeming to get pushed higher than where they should be. Prices have gone up so much that the appraisers can't keep up with increases. Buyers are finally coming out, but sellers expectations are sky high. We currently have a shortage of inventory. The amount of buyers is about typical, but with shortage of inventory, there are multiple offers again in certain price ranges. Our moved up to 4 in June from 34 in May, but indicates conditions are still short of agents expectations. Agents are generally in consensus that buyers are cautious following the sharp rise in prices over the last year, but this may persist given the still-low inventory levels. Home prices continued to rise in June with our coming in at 77 vs. 78 in May both indicate broadbased price increases. Agents saw listings rise modestly in June and combined with the soft traffic, may lead to some pressure on home prices. Incentive Point Change 5.6 (1.5) (6.) (6.5) (9.) 27% 7% 66% How Do the Recent 3 Days Compare to the Prior 3 Days % 7% 79% 21% 4 33% 27% Slide 15

16 Ft. Myers, FL Low Inventories Drive Some Buyer Urgency; s Rise Further (2,531 single-family building permits in 213, 56th 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 Less inventory, higher prices, buyers fears of not being able to qualify. Backlog of buyers looking to buy but finding multiple offers and a surprisingly short inventory. Seeing the typical seasonal slow down in traffic. Our jumped to 56 in June (from 27 in May), which is the first time that traffic conditions exceeded agents expectations since September 213. Limited inventories are driving some buyer urgency although a continued persistence of that condition will likely lead to frustration and lower traffic levels. Credit concerns are lingering for some buyers too. Home prices rose again in June with our landing at 63 vs. 68 in May. Price appreciation should continue if traffic levels hold-up, as inventory levels continue to decline. Incentive Point Change 29. (5.7) (3.4) (8.5) (13.6) 25% 38% 37% How Do the Recent 3 Days Compare to the Prior 3 Days... 25% 75% % 25% 25% 13% Slide 16

17 Houston, TX Local Slows on Gains; Incoming Buyers Still Willing to Pay (34,59 single-family building permits in 213, 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 think the big rush is over as home prices have increased too much in a year. Sticker shock to current residents. Newcomers are buying the homes. Don't know if it is a blip in the market or a trend, but buyer activity has definitely slowed in the past 3 days. Lack of inventory may have run off many would be buyers. The energy sector is hiring like crazy. The are consolidation many of the upstream operations to Houston. Buyer traffic slowed significantly in June with our Traffic falling to 32 from 5 in May. Agents in Houston consistently saw current residents balking at price levels, although the energy sector continues to bring jobs and buyers willing to pay-up to the area. Home prices were broadly higher in June with our coming in at 86 unchanged from May. Although traffic eased in the month, still-low inventory levels remain an issue and will likely support the recent home price gains, particularly with the time to sell still decreasing. Incentive Point Change (17.9) (.6) (5.6) (2.3) (11.9) 5 14% 36% How Do the Recent 3 Days Compare to the Prior 3 Days... 71% 29% 8% 83% 8% 23% 15% 62% Slide 17

18 Inland Empire, CA Very Slow Traffic and Rising Inventories Likely to Pressure Prices (6,359 single-family building permits in 213, 21st 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 FHA loan limit cut in January definitely slowed the market. Market is dead people are not selling or buying right now very slow. Fuel Prices. Economy. Buyers are stating that pricing levels have increased to a level that makes them uncomfortable. Lack of inventory/increase in home prices/higher interest rates. Conditions in the Inland Empire remain very slow with our holding steady at 1 for June. Agents continue to cite the FHA loan limit cuts earlier in the year as the primary reason for stalling out the area, but economic concerns and higher prices have not instilled confidence in potential buyers either. Home prices rose sequentially again, with our Price landing at 65 for June from 6 in May. Inventory has been seen higher for most of the year and combined with slow traffic should pressure home prices. Incentive Point Change. 5. (1.6) (1.) How Do the Recent 3 Days Compare to the Prior 3 Days % 89% Slide 18

19 Jacksonville, FL Reasonable Sellers Drawing Multiple Bids and Buyer Urgency Pushing Prices Higher Same old inventory and not much of it. (6,276 single-family building permits in 213, 22nd 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 Smaller inventory, homes priced right are selling fast. The tide has turned and it is a MAD rush to the listings. Multiple offers on everything and everything is selling. Inventories continue to shrink despite more coming on the market. Prices climbing quickly against demand. Extremely busy with buyers. Sellers are coming back into the market and putting their homes up for sale. A lot of relocation activity; personal and corporate. Our came in at 5 for June (from 58 in May), which indicates that traffic is in-line with seasonal expectations. Low inventories are driving buyer urgency here as new listings with reasonable prices are attracting multiple bids immediately. Corporate relocations are also bringing incremental buyers to the area. Home prices were seen higher across the board with our Price coming in at 93 in June from 67 in May. We expect further price gains as solid demand outstrips still low inventories and a contracting time to sell. Incentive Point Change (8.3) 26.2 (45.) (7.1) (2.2) 29% 43% 28% How Do the Recent 3 Days Compare to the Prior 3 Days... 86% 67% 14% 17% 17% 29% 14% 57% Slide 19

20 Las Vegas, NV The Wait for Lower Prices Continues and Increasing Inventories Should Help Less inventory. Uncertain employment data. (7,67 single-family building permits in 213, 17th 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 Possibly waiting for prices to lower. Increasing interest rates. New construction pricing is increasing. Great uncertainty in buyers minds. low confidence in their mind. Buyers are still holding back waiting for prices to go lower. Rates are still pretty favorable. Several new home communities have started selling, providing realtors with more property to show. Buyer traffic was light again in June as our rose to 37 from 3 in May still short of a neutral 5 level. Agents noted that potential buyers are generally nervous about employment and economic conditions, and have some expectation or hope that prices will move lower in the near-term. Some agents note that increasing inventories have given them more to show. Home prices were seen slightly better than unchanged in June with our Price landing at 59 from 57 in May. Price gains should moderate given the light traffic, increasing inventories, and longer time to sell. Incentive Point Change (8.6) (2.6) (3.7) 47% 2 33% How Do the Recent 3 Days Compare to the Prior 3 Days... 31% 56% 13% 56% 44% 44% 56% Slide 2

21 Los Angeles, CA s Rising For Now, but Inventories and Buyer Caution Growing (7,477 single-family building permits in 213, 12th 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 Slower traffic as prices have increased and investors stopped purchasing. Still seeing lots of foreign investors. Getting used to the limited buyer traffic and limited inventory. Lower interest rates will hopefully increase Buyer traffic and sales. Buyer anxiety and affordability problems. Low inventory, but slowly increasing. Price reductions have stimulated buyer interest. Buyer traffic was just below agents expectations in June as our landed at 45 from 41 in May. While agents have seen prices continue to move higher on thin supply, there have been pockets of listing growth, which is flattening out home price appreciation (and met with increased buyer interest). Home prices were seen higher again with our coming in at 71 for June from 72 in May. Inventories continued to grow in June as the time to sell lengthened again combined with modest demand, this should lead to a moderation in prices. Incentive Point Change 3.4 (.7) (9.8) (2.3) (19.7) 37% 37% 26% How Do the Recent 3 Days Compare to the Prior 3 Days... 53% 37% 79% 11% 14% 7% 61% 39% Slide 21

22 Miami, FL Traffic Still Slow as Buyers Reluctant to Chase Higher Prices Market is taking a breather after gains. High prices, inventory low and does not match with customer's expectations. Economy is slowing buyers. (6,387 single-family building permits in 213, 19th 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 Qualified buyers are desperate to find good properties...at any price. Traffic hitting expectations where sellers are reasonable. Buyer traffic did not meet agents expectations with our landing at 38 for June from 36 in May. Buyers are hesitant following recent price increases, particularly with their ongoing economic uncertainty. With still-low inventory levels, some agents have seen solid demand for properties that are priced more reasonably. Our indicated another month of gains with the June reading of 71 vs. 78 in May. Pricing gains should moderate given the ongoing trends of weak traffic and increasing inventory. Incentive Point Change 2.5 (7.2) (7.6) (1.7) (15.) 35% 12% 53% How Do the Recent 3 Days Compare to the Prior 3 Days... 59% 24% 18% 29% 71% 53% 35% 12% Slide 22

23 Minneapolis, MN Traffic Slips in June, but s Continue to Move Higher on Low Supply (7,187 single-family building permits in 213, 15th 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 Economy and quality housing stock as well as prices seem to have out paced the buyers expectations of a good value. Very low inventory, but still seeing high demand. Interest rates are still low and our clients express they want to buy before the rates increase. Inventory is picking up but days on market is decreasing. Our fell to 39 in June from 57 in May although the perception of why varied amongst agents. Causes included a lack of buyer confidence in the economy, some pull-forward of demand into earlier spring months, and too fast of a move in prices. Other agents noted that some are still being driven by the low interest rate environment. Home prices were broadly higher again with our Price hitting 72, from 73 in May. Inventories rose in the month, but buyers were able to keep up as the time to sell decreased sequentially. Incentive Point Change (17.8) (1.1) (2.2) (2.) (24.4) 45% 22% 33% How Do the Recent 3 Days Compare to the Prior 3 Days... 56% 44% 89% 11% 44% 33% 22% Slide 23

24 Nashville, TN Low Inventories Continue to Drive Urgency and s Higher (7,16 single-family building permits in 213, 16th 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 It is less than it was last year. It seems like the urgency is going down even as we have reduced inventory. Low supply. We are receiving multiple offers on same property and bidding wars. Days on market are becoming more like hours on market because of low supply and high demand. Offers are many times made above the asking prices to keep others from beating a buyer out of a purchase. Most neighborhoods have few if any active listings because they are selling so quickly now. Buyer traffic got back to levels in-line with agents expectations in June (a 5-reading) from 35 in May. Continued low-inventory issues were once again driving multiple-bid situations with properties garnering bids almost immediately after hitting the market often above asking price. However, some agents are seeing a reduced sense of urgency despite low inventories. Home prices were generally higher with our Price coming in at 65 vs. 75 in May. Continued inventory shortages and a shorter time to sell should support home price appreciation in coming months. Incentive Point Change 15. (1.) (24.1) (15.) % 64% 18% How Do the Recent 3 Days Compare to the Prior 3 Days % 36% 18% 9% 36% 55% Slide 24

25 New York-Northern NJ Economy and Employment Keep a Lid on Buyer Confidence (1,139 single-family building permits in 213, 6th 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 No confidence in the market and a lack of good jobs. A lot of people seem to be on the fence, some feel that prices have risen faster then they should and are waiting to see if there will be an adjustment. Stalemate. Buyers expect deal and sellers expect rebound in market pricing. Market cooled off the last 4 weeks. No affordable inventory and concerns about the economy seem to be the reasons. High taxes and regulation limit the markets. taxes continue to increase at a fast pace. Buyer traffic continued to slip in June with our landing at 23 from 26 in May. Economic uncertainty and less confidence in income growth are weighing on potential buyers and keeping many out of the market unless they feel they are getting a good deal. Similarly, sellers are also holding out for buyers to pay-up to still rising home prices. Low inventories continue to support home prices as our Price came in at 59 for June from 63 in May. As inventories continue to increase, there will likely be downward pressure on prices until there is a pick-up in traffic. Incentive Point Change (2.9) (4.1) 5.4 (3.7) (9.) 61% 7% 32% How Do the Recent 3 Days Compare to the Prior 3 Days... 34% 5 74% 16% 11% 14% 42% 37% 21% Slide 25

26 Orlando, FL Buyer Urgency Slows with Further Price Gains; Inventory Gains Should Help (9,57 single-family building permits in 213, 7th 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 Increased inventory levels, slower buyer traffic levels which is somewhat typical for summer months. Fewer qualified buyers seem to be in the market. Inventory has increased, mortgage rates are low but prices have risen to fast and to high. Buyers want to purchase while prices and interest rates rare still affordable. They also think rents are too high. Inventory down in some areas, continued low interest rates. Our slipped to 31 in June from 41 in May as more buyers grew cautious over recent price gains (which did not slow), although interest continued among others that were looking to take advantage of the still-low interest rate environment. Additionally, rent increases in the area have also pushed more into the buying pool. Home prices gained in June with our Price coming in at 75 from a still-strong 68 in May. We expect price appreciation to slow given the low traffic trends and increasing supply over the last few months. Incentive Point Change (9.7) (5.1) % 62% How Do the Recent 3 Days Compare to the Prior 3 Days % 13% 14% 57% 29% Slide 26

27 Philadelphia, PA-Southern NJ s Flatten Out as Disappoints Again (6,223 single-family building permits in 213, 23rd 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 Activity just seems to be stalled. Listings are the slowest and lowest in 13 years. New construction, low interest rates and programs, buyers wanting to be in a vibrant, energetic center city atmosphere, close to work with less travel time. Not seeing many first-time buyers. Buyer traffic remained lower than agents expectations in June with our coming in at 28 from 23 in May. Agents continue to point to a lack of buyer confidence slowing the market and an absence of first-time buyers, although some are seeing pockets of strength near commercial centers. As traffic trends suggested would happen, home price appreciation has moderated with our indicating flat prices vs. May. We expect prices to come under pressure given the lack of traffic and climbing inventory levels. Incentive Point Change 4.7 (1.7) (1.4) (15.5) (13.4) 56% 11% 33% How Do the Recent 3 Days Compare to the Prior 3 Days... 56% 22% 22% 25% 63% 13% 38% 38% 25% Slide 27

28 Phoenix, AZ Buyers Continue to Wait for Lower Prices and Have Been Rewarded So Far Fear about the economy. (12,884 single-family building permits in 213, 5rd 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 Prices have increased and buyers are holding back. Buyers seem to be willing the market lower. Malaise in the economy for sure. Buyers are afraid to make any big dollar moves. Middling traffic, a lot of wait and see. Also resistance from sellers to price to the current market. My listings gave been selling for cash under $2k. Buyer traffic ticked down from already depressed levels, with our landing at 21 from 3 in May. Across the board, agents saw buyers hesitate on prices with an expectation that they will continue to come down. As indicated from our Price, sellers are mostly willing to lower expectations although commentary shows there is a resistance to meet the market. Home prices were seen lower for the seventh consecutive month with our Price hitting 32 from 36 in May. We expect prices to remain under pressure as inventories continue to rise and the time to sell lengthened further. Incentive Point Change (8.2) (3.6) 1.1. (1.8) 57% 43% How Do the Recent 3 Days Compare to the Prior 3 Days... 14% 36% 5 44% 44% 11% 68% 29% 4% Slide 28

29 Portland, OR Relocations and Retirees Help Traffic Levels Hit Expectations Corporate relocation is up. (5,64 single-family building permits in 213, 25th 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 is good, however there is a lower inventory of homes available. Clients wish to move into our area. Buyers are once again buying homes for retirement in 3 to 5 years. Our pointed to slower traffic in June, but levels still came in to meet expectations for this time of year. Agents indicated that demand from corporates and retirees were solid in June, but that low inventory levels are causing some potential buyers to stay home Home prices continued to increase in June, as our increased to 86 from 75 in May. We expect continued home price appreciation, as agents pointed to a decreased time to sell a positive for future pricing power. Incentive Point Change (1.7) % 5 25% How Do the Recent 3 Days Compare to the Prior 3 Days... 73% 27% 83% 17% 58% 42% Slide 29

30 We are experiencing a shortage of inventory. Raleigh, NC Traffic Slides Lower, but Pricing Resilient in June Inventory is low, pricing levels are high, and there is uncertainty about which way the market is going. (8,38 single-family building permits in 213, 11th 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 Heavy traffic in the fourth quarter of last year and the first quarter of this year has led to a cooling off in the market in the second quarter, but I think things may pick up in the second half. Buyer traffic fell further below agents expectations in June, with our hitting 2 from 38 in May. Agents indicated that low inventories, and high prices have kept buyers out of the market. Despite those conditions, there is little sense of urgency to buy before potential further price gains. Prices continued to increase despite the lower demand, as our came in at 7, not quite as high as 88 in May, but still above a neutral reading of 5. We think prices may see more appreciation as inventories fell further, as did the time to sell, though traffic remains a risk. Incentive Point Change (17.5) (17.5) (15.) How Do the Recent 3 Days Compare to the Prior 3 Days Slide 3

31 Richmond, VA Less Active Military, but Affordability Drives Demand a Bit Higher There are fewer military moves. (3,577 single-family building permits in 213, 37th 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 We have some buyers that are looking now so they can close before the start of the new school year. Low rates, low inventories, slowly rising prices. Traffic has remained volatile over the past few months in Richmond, as our traffic index rebounded slightly to 4 from 3 in May (and 5 in April), but still coming in short of expectations. Agents noted that the military, which is integral to the area s demand has seen fewer moves. However, stillattractive affordability has helped drive traffic. Prices were flat in June for the first time since January, as our index came in at 5 from 8 in May. We expect price appreciation to remain moderate, given an increased time to sell and higher inventories. Incentive Point Change 1. (3.) (1.) (2.) (3.) How Do the Recent 3 Days Compare to the Prior 3 Days Slide 31

32 Sacramento, CA Lending Requirements Take a Toll on Demand (3,567 single-family building permits in 213, 38th 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 Many buyers are tired of the processes demanded by banks to get the loans they want. Higher interest rates and higher prices for a limited inventory. Inventory is too low and lending requirements are high. Prices and lending requirements are acting as obstacles. There is also a lack of jobs. Buyer traffic remained well short of agents expectations in June, as our fell to 22 from 25 in May. Agents indicated that lending requirements remain too strict for buyers and that inventory is too low to bring out others. A lack of confidence in employment prospects has also weighed on the potential demand. Prices continued to rise in June, despite lower traffic, as our came in at 67, up from 63 in May. We expect price appreciation to slow, as agents pointed to an increased time to sell and higher inventories. Incentive Point Change (2.8) 4.2 (6.3) 12.5 (7.9) 67% 11% 22% How Do the Recent 3 Days Compare to the Prior 3 Days... 56% 22% 22% 38% 63% 56% 33% 11% Slide 32

33 San Antonio, TX Local Economy Picking Up Demand, but More Inventory Needed There are good jobs. (5,841 single-family building permits in 213, 24th 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 There is low inventory and high demand that is built based on a much better economy. There is a continued response to oil field activity and construction related to the activity as the population grows the need for housing, restaurants, and all that goes is growing too. Inventory a little short. Less existing and less new. Traffic improved slightly in June, but still came in just short of agents expectations for this time of year with our Traffic hitting 44 for June from 4 in May. Agents indicated that demand has improved due to the better local economy that is being driven by the local oil and gas industry. Though some agents would like to see more inventory for buyers. Agents pointed to higher prices, though gains were less broadbased with our price index hitting 67 in June from 83 in May. Prices should continue to rise, as inventories were slightly lower and the time to sell decreased, both positives for prices. Incentive Point Change 3.8 (16.7) 5.6 (1.4) (7.8) 25% 12% 63% How Do the Recent 3 Days Compare to the Prior 3 Days... 67% 56% 56% 44% 33% 33% 11% Slide 33

34 San Diego, CA Buyers Feel that Prices are Too High, Can t Qualify Even if They Want to Buy (2,565 single-family building permits in 213, 53rd 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 Prices may have risen too fast. Buyers are having difficulties qualifying for loans. The FHA MI is knocking a lot of first time buyers out. First time buyers are priced out of the market. Mortgages are difficult to obtain. Buyer apathy, seller overreach Foot traffic and online viewings are down. Buyers simply seem indecisive. Others are less financially qualified and are having trouble getting approved. Sold pricing is holding firm over May 214, but I don t expectation any gains. Buyer traffic remained well short of agents expectations in June, as our came in at 23, unchanged from May. Agents indicated that buyers are facing a challenging loan qualification process, especially first-time buyers, and that prices are too high for buyers right now. Home prices were about flat in June, as our came in at 54, unchanged from May s. We think prices may face pressure, however, as agents pointed to an increased time to sell and inventories, in addition to the slow traffic levels. Incentive Point Change.. (12.5) (11.5) (23.1) 61% 8% 31% How Do the Recent 3 Days Compare to the Prior 3 Days... 46% 31% 33% 23% 58% 8% 62% 38% Slide 34