2. Grand Junction Colorado

3. Palm Springs, 1989

4. Rosamond, 2005

5. Moreno Valley, CA

6. To Get to a Peak Price
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7. You Need Sales Momentum California Sales
Peak:624,957 units in 2005
Valley:189,345 units in 1982
2012 annual sales up 4.3% from 2011
2011 annual sales up 1.4% from 2010
2010 annual sales down 12.3% from 2009
2009 annual sales up 24.5% from 2008
2008 annual sales up 30.4% from 2007
2007 annual sales down 33.4% from 2006
2006 annual sales down 23.8% from 2005
2005 annual sales up 0.8% from 2004
2004 annual sales up 3.8% from 2003
2003 annual sales up 7.6% from 2002
2002 annual sales up 14.1% from 2001
2001 annual sales down 4.7% from 2000 YTD
2000 annual sales up 1.4 from 1999
1999 sales up 7.3% over 1998
10/93: 41.0
Consumer Confidence
01/00:
03/03: 63.0
5/07: 128.4
2/09: 23.9
SERIES: Sales of Existing Single Family Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
*Sales are seasonally adjusted and annualized

8. You Need a Buyer Willing to Make Sacrifices to Own

9. You need lenders to say YES to capable and not capable buyers
Credit Score Categories
Fiscal Year
Quarter
720+
Less than 579
Missing
2008
Oct-Dec
Jan-Mar
Apr-Jun
Jul-Sep
8.9
9.5
14.7
18.5
9.7
13.0
15.8
31.0
31.7
35.7
37.7
2009
2010
0.7
2011
2014
42.4
42.0
42.1
41.4
7.7
9.1
10.4
11.2
2.3
3.0
3.5
4.3
2015
16.0
16.3
18.3
25.4
25.7
26.4
40.4
40.0
38.4
12.3
12.4
11.7
5.6
5.5
5.0

10. You need trustee sales to be nearing their lows for the cycle

11. You need construction of new homes to be strong and drive both employment & migration

12. You need an economy doing well enough to encourage household formation
Annual percent change, chain-type (2005) $
ANNUALLY
QUARTERLY
2009 Largest Annual Drop since 1938 (-3.4%)
SERIES: GDP
SOURCE: US Dept. of Commerce, Bureau of Economic Analysis

13. You need owners with lots of equity to move up
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

14. You need the mix of sales to trustee sales to be near record lows
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

15. Household Formation
Apartment sector appears to be at a mature phase in the real estate cycle
One sector where operating fundamentals and valuations are garnering attention is apartments. The apartment sector remains healthy as labor market conditions and rising household formations, which are still heavily tilted toward renter-occupied units, continue to strengthen. With young adults steadily securing full-time jobs and gradually leaving the comfort of their parents’ home, the apartment sector has more room to grow. Moreover, population projections for this age cohort by the U.S. Census Bureau also suggest demand will remain robust in the coming years.

16. SERIES: Homeownership Rates SOURCE: U.S. Census Bureau
But California rate has lagged US rate by 10+ percent for most of period
SERIES: Homeownership Rates
SOURCE: U.S. Census Bureau

17. Signs You Are Peaking in Price
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18. New home prices and existing home prices close in price

19. Affordability at Cycle Lows

20. California Median Price vs. US Median Price

21. California Median Household Income to California Media Price

22. Interest Rates