1. JP Soltesz August 19th, 2014 Ft. Worth, TX
APSP Industry Summit
JP Soltesz
August 19th, 2014
Ft. Worth, TX

2. Prices rising….well, they were rising…
Case Shiller National
+ 9% y-o-y
+ 27% from trough !! (Q1 ‘12)
Sources: Case Shiller, Haver Analytics

3. Home ownership a luxury purchase?
Sources: Federal Housing Finance Agency, Haver Analytics

4. Rates up, then flat, now down
Up recently, but like prices, they have plateaued.

5. Markets can withstand rise
Source: Freddie Mac

6. Driving housing prices is…
…The yin to demand’s yang

7. That monster lurking in the shadows is not as scary as we had expected
‘02-’05 between 4 and 5 months visible. 2 months shadow
Source: Core Logic

8. Fewer foreclosures
12 month total (In 000)
Source: Core Logic

9. “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”
“no comment” – 2013, 2014

10. Same old story…

11. Improving equity positions
Driven by prices rising, but also by lower interest rates
Discuss here plan for TARP housing dollars – check numbers.
=Market Value-Mortgages
Source: US Federal Reserve

12. Household Formation ‘91-’07, 1.3m Under 400k 09-10.
Why arent HH’s forming? People living at home longer, not getting married, not getting jobs.

13. Dateline: June 22, 2014
“It’s Official: The Boomerang Kids Won’t Leave”

14. Common Thread: B.A. Degrees
14 profiles
Age range 22-30
Total Debt: $636,000
($45, Average per profile)
Common Thread: B.A. Degrees

15. In 2005 40% of all student loan debt was held by people under 30
Source: Federal Reserve Bank of New York

16. By 2012 only 33% of all student loan debt was held by people under 30
Source: Federal Reserve Bank of New York

17. For Millennials, love and marriage don’t go together like a horse and carriage
% married at age 18-32
Source: Pew Research Center

18. Youth employment: beast of burden
Through July
Sources: US Bureau of Labor Statistics

21. Will you still need me, will you still feed me…c y a n e c t p x e E f L i
Source: CDC

22. If demand ever kicks in, watch out!
Housing Starts, 10 year averages
Room To Grow 60%+
Che
On track for just over 1million in 2014
SAAR
Sources: US Census Bureau, Haver Analytics

23. Still below average and slowing
Permits, completions also down
893
SAAR
Sources: US Census Bureau, Haver Analytics

24. Freddie Mac Monthly Average Commitment Rate July – 4.13%
Under-rated
Freddie Mac Monthly Average Commitment Rate July – 4.13%
Active Loan Count Share
Up to 4%
4-4.5%
4.5-5%
5-5.5%
5.5-6%
6-6.5%
6.5-7%
7.5+%

25. Put TARP back to work 500 450 400 350 Housing 300 Credit Billion 250
Banks
200
Auto
150
AIG
100 50
Obligated
Disbursed
Cash Back

26. Remodeling still growing, less strong

27. Something’s fishy
Sources: National Association of Home Builders/Wells Fargo Housing Market Index; US Census Bureau

28. It’s time we go our separate ways
Sources: National Association of Home Builders/Wells Fargo Housing Market Index; US Census Bureau

29. US Economy

30. US - Components of GDP 2.3% 2.2% 1.6%
Source: Bureau of Economic Analysis

31. Don’t know much about his-toe-ree
Govt expenditures
Source: Bureau of Economic Analysis

32. What happened next to overall GDP
1937
1955
1993
Contraction in ‘38
2% Growth ’56-57; Contraction in ’58
Contraction in ‘74-75
Growth into tech bubble
???
Source: Bureau of Economic Analysis

33. Employment

34. 6.2 is bad. For an earthquake.
Sources: Haver Analytics, Bureau of Labor Statistics

35. But….(there’s always a but)
Non-institutional Population
Participation Rate =
Labor Force /
(Those employed +
Those seeking work)
(16+)

36. Participation rate

37. 6 consecutive months of 200,000+ jobs added to payrolls
for the first time since
1997
Source: Bureau of Labor Statistics

38. Source: Bureau of Labor Statistics
46 consecutive months of
growth in payrolls.
Since 1939 only a 48 month stretch from 1986–1990 saw a longer period of payroll growth.
Source: Bureau of Labor Statistics

39. Still haven’t found what they’re looking for

40. Coke, Pepsi, or……JOLT?

41. Show me the money

42. The Chart that Could Have Saved The World

43. Home Ownership Rate

44. Home Ownership Rate

45. Home Ownership Rate
64.8 in Q1