1. Michael Orr Director Center for Real Estate Theory and Practice April 28, 2015 Michael Orr Director Center for Real Estate Theory and Practice April 28, 2015 Greater Phoenix Housing Market

2. Euphoria Denial Despair Hope Skepticism Optimism Enthusiasm Exhilaration Unease Pessimism Panic Capitulation Relief Optimism Enthusiasm The Market Cycle

3. Euphoria Denial Despair Hope Skepticism Optimism Enthusiasm Exhilaration Unease Pessimism Panic Capitulation Relief Optimism Enthusiasm The Market Cycle 2005 2008 2010 2015 2007 2012 2003

5. normal inflation (CPI) $134

6. Dec 2004 Apr 2008 Another +39% to reach the peak! +73%

7. Most Home Prices Have Been Flat for More than One Year But Outlook for 2Q-4Q 2015 – Positive Already See 5% Increase During 2Q

8. range bound Dec 2013 – Feb 2015 $115-$116 throughout single family non-distressed under $500K

9. 2014 vs. 2013

10. 2015 vs. 2014 1Q YTD 2015 vs. 2014 1Q YTD

11. In 2014 Demand for Homes to Buy Was Weak While Demand for Homes to Rent Was Very Strong In 2014 Demand for Homes to Buy Was Weak While Demand for Homes to Rent Was Very Strong

12. In 2014 Demand for Homes to Buy Was Weak While Demand for Homes to Rent Was Very Strong In 2014 Demand for Homes to Buy Was Weak While Demand for Homes to Rent Was Very Strong In 2015 Demand for Homes to Buy Is Back to Normal Demand for Homes to Rent Remains Strong In 2015 Demand for Homes to Buy Is Back to Normal Demand for Homes to Rent Remains Strong

13. Prediction Is Very Difficult, Especially About the Future - Neils Bohr (1885-1962) Prediction Is Very Difficult, Especially About the Future - Neils Bohr (1885-1962)

15. Balanced Market Seller’s Market Buyer’s Market

16. Long term average Next data released July 28

18. +18%

19. -1%

20. +25%

21. +40%

22. +25%

23. +17%

24. +0%

27. Priced Under $200,000 5,824 25,153

28. Priced Over $500,000 5,051 3,623

29. Priced $200,000 to $500,000 9,717 7,716

32. Situation Summary – April 2015 Supply is well below normal (79% of normal) Demand is normal & growing (102% of normal) AZ loan delinquency below normal at 4.4% Foreclosures well below long term average Lending rules starting to loosen a bit Mid range market heating up Very high end market also strong Economy and jobs continue to improve Time to change from relief to optimism Supply is well below normal (79% of normal) Demand is normal & growing (102% of normal) AZ loan delinquency below normal at 4.4% Foreclosures well below long term average Lending rules starting to loosen a bit Mid range market heating up Very high end market also strong Economy and jobs continue to improve Time to change from relief to optimism

33. Michael Orr Director Center for Real Estate Theory and Practice Michael Orr Director Center for Real Estate Theory and Practice