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Is There Trouble With The Bubble?

Is There Trouble With The Bubble?. Presented by: Gregory H. Leisch, CRE November 14, 2005. Prices Are Way Up. 70%. 69%. 68%. 67%. 66%. 65%. Homeownership Rate. 64%. 63%. 62%. 61%. 60%. 75. 76. 77. 78. 79. 80. 81. 82. 83. 84. 85. 86. 87. 88. 89. 90. 91. 92. 93.

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Is There Trouble With The Bubble?

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  1. Is There Trouble With The Bubble? Presented by: Gregory H. Leisch, CRE November 14, 2005

  2. Prices Are Way Up

  3. 70% 69% 68% 67% 66% 65% Homeownership Rate 64% 63% 62% 61% 60% 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 U.S. Is Experiencing Record Homeownership Sources: U.S. Census Bureau; Economy.com; Delta Associates;11/14/05.

  4. And Investor Purchases Are Up % Home Purchases by Investors Sources: LoanPerformance and HMDA; Delta Associates; 11/14/05.

  5. Speculators & Investors End Users And In Some Markets, Way Up Condo Purchases in Select Markets 15% 20% 30% 70% 85% 80% South Florida Las Vegas Washington, D.C. Sources: Multifamilyexecutive.com; Delta Associates; 11/14/05.

  6. Real Estate Returns vs.Investment AlternativesAs of Mid-Year 2005 Real Estate Alternatives Total Return/Year Source: NAREIT, NCREIF, Vanguard, Delta Associates; November 2005.

  7. And Second Home Purchases Are Up % of Mortgages for Second Homes Sources: LoanPerformance and HMDA; Delta Associates, 11/14/05.

  8. Annual Increase Existing Home ValuesAs of June 2005 Annual House Price Increase U.S. Average 13.4% Sources: OFHEO; Delta Associates; 11/14/05.

  9. Are Prices Sustainable?

  10. Trend In RatioMedian Home Price to Median Household Income1981-2005 Ratio 02 05 Sources: Freddie Mac; Delta Associates; 11/14/05.

  11. U.S. 4.3 RatioMedian Home Price to Median Household Incomeat June 2005Major Metro Areas Ratio Sources: NAR; Economy.com; Delta Associates; 11/14/05.

  12. Types of Mortgages(Second Half of 2004) % Second Half 2004 Originations Sources: MBA; Delta Associates; 11/14/05.

  13. Are Certain Cities at Risk?

  14. Payroll Job GrowthLarge Metro Areas12 Months Ending September 2005 Thousands of New Jobs Sources: BLS, Delta Associates; 11/14/05.

  15. Average Annual Building Permits2000-2002 Number of Units Sources: US Census Bureau; Delta Associates; 11/14/05.

  16. Barriers to Entry Sources: Delta Associates; 11/14/05.

  17. Percent of Apartment Sales to Condo ConvertersApril 2004-March 2005 Sources: Real Capital Analytics; Delta Associates; 11/14/05.

  18. Over production of housing Prerequisite to a Burst: • Trauma to the local economy Source: Delta Associates; 11/14/05.

  19. Supply will begin to outstrip demand Price appreciation will decline severely Instead of one day sell outs and waiting lines, concessions will appear Since owners will not be able to sell units as quickly as before, they will offer them for rent Softer Markets Will Begin To Experience: Source: Delta Associates; 11/14/05.

  20. Is There Trouble With The Bubble? Presented by: Gregory H. Leisch, CRE November 14, 2005

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