2006 Land Market Estimate.


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Nitty gritty data on the home offering procedure at the buyer level. ... When You Started Using The Internet As Part Of Your Home Buying Process ...
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2006 Real Estate Market Forecast Leslie Appleton-Young Vice President and Chief Economist

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Economic Conditions

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Recent Economic Headlines US occupations up 243,000 in February; reexamined additions of 170,000 in January and 145,000 in December Strong yet not blasting Rebound in wages Expect benchmark Fed Funds rate to go from 4.5% to 5.0% Strong efficiency increases Softer lodging segment

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Gross Domestic Product 2004: 4.2% 2005 3.5% 2006 3.5% ANNUAL PERCENT CHANGE, CHAIN-TYPE (2000) $

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Gross Domestic Product 2005 Q4: +1.1% QUARTERLY PERCENT CHANGE, ANNUAL RATE

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Employment Growth, California versus U.S. YEAR TO YEAR % CHANGE

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Nonfarm Employment By Region SOURCE: CA Employment Development Division

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Consumer Confidence Index January 2006: 106.3 INDEX, 100=1985

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Consumer Spending 2005 Q4 1.1% QUARTERLY PERCENT CHANGE

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U.S. Deals and Median Price ANNUAL RATE

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Mortgage Origination Refinance versus Buy ORIGINATION (BIL $) 30-YR FIXED RATE MORTGAGE SOURCE: Mortgage Bankers Association

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The "Riches" Effect Higher land values changed over into money through: Trading "down"; Cash-out refi\'s; Home value advances Housing "cash" made (Source: Federal Reserve Board): Year Money % Disposable Income 2000 $204 B 2.8% 2001 $262B 3.5% 2002 $398 B 5.1% 2003 $439 B 5.4% 2004 $599 B 6.9% at the end of the day, this getting has energized buyer spending and it will moderate as lodging value increases moderate.

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Longer Tenure in Home? Property holders may stay in their present homes longer since they have: Cashed out and spent their exchange up value Concerned about "property charge stun" Love their low-rate contract But keep in mind that "Boomers" are acquiring riches from their folks and are keen on land for: Kids Parents Retirement/Investment

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Consumer Price Index January 2006: All Items 4.0% Y-T-Y; Core 2.1% Y-T-Y PERCENT CHANGE FROM A YEAR AGO, 100=1982-1984

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Fed Funds and Mortgage Rates 2000-2006: 15 Fed increments since June 2004 SOURCE: Federal Home Loan Mortgage Corp.

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Mortgage Rates SOURCE: FHLMC

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Treasury Yield Curve

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Why are Rates so Low? Greenspan: It\'s a "Problem" Deflationary Structural Forces Global Competition: Wal-Mart Effect Increased customer Awareness: Internet Effect Productivity increases/Greater proficiency Global Labor power – off-shoring Foreign Central Banks and Pension reserves holding more $\'s

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ARMs as a Percent of All Mortgages Why isn\'t this lower? Source: Federal Housing Finance Board Source: Federal Housing Finance Board

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New Loan Products and Risk Types of instruments Zero up front installment Interest-just Stated wage Option-ARM\'s Concerns Ability to assimilate rate modification Slower value development ahead

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National Economy Economic development in 2006 a moderate 3.5% The "Goldilocks Economy"? Joined by … Modest occupation development – strong yet not remarkable Inflation in line – Fed Priority Continued quality in Business Investment Consumer Spending level Growing Fiscal Stimulus: Katrina Strong Housing Market somewhat off 2005 pinnacle

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California Real Estate Market

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California\'s Housing Cycles and Membership 1970-2006 THOUSANDS

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Sales of Existing Detached Homes and Pacific West Consumer Confidence California, January 2006 Sales: 500,474 Units, Down 24.1% Y-T-D, Down 24.1% Y-T-Y UNITS INDEX SOURCE: California Association of REALTORS®; The Conference Board

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Median Price of Existing Detached Homes California, January 2006: $551,300, Up 13.8% Y-T-Y SOURCE: California Association of REALTORS®

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Unsold Inventory Index California, January 2006: 6.0 MONTHS Average Since 1/88: 6.4 months SOURCE: California Association of REALTORS®

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Median Time on the Market California Single-Family Homes, January 2006: 48.5 DAYS ON MARKET SOURCE: California Association of REALTORS®

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California\'s Million-Dollar Home Sales Increased 47% in 2005 YEAR Source: DataQuick Information Systems NUMBER OF HOMES

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Why are Home Prices Rising? Econ 101 Strong Demand Low Mortgage Rates Demographics: Baby Boomers Flight from option venture decisions Speculation? Confined Supply Constraints on new development Low stock of homes available to be purchased

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Is There a Housing Bubble? Yes Virginia, there is an air pocket – a rise in the quantity of articles about the lodging bubble.

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BUBBLE? NO! Delicate LANDING? YES

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What is a Bubble? NASDAQ 1987-2005 MONTHLY AVERAGE

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Median Price, Annual Percentage Change California versus U.S. Yearly PERCENTAGE CHANGE

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California Median Price 1970-2005 Annual Percentage Change ANNUAL PERCENTAGE CHANGE

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Southern California Region

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Nonfarm Employment SOURCE: California Economic Development Dept.

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Nonfarm Employment Los Angeles County, January 2006: Up 1.3% Y-T Y-T-Y PERCENT CHANGE SOURCE: CA Employment Development Division

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Taxable Sales Los Angeles County ANNUAL PERCENT CHANGE SOURCE: CA State Board of Equalization

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Sales of Existing Detached Homes and Pacific West Consumer Confidence Southern California January 2006 Sales: 8,823 Units, Down 19.5% Y-T-D, Down 19.5% Y-T-Y UNITS INDEX SOURCE: California Association of REALTORS®; The Conference Board

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Sales of Existing Detached Homes SOURCE: California Association of REALTORS®

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Home Sales in Southern California Regions SOURCE: California Association of REALTORS®

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Median Price of Existing Detached Homes Southern California, January 2006: $531,043 Up 12.2%% Y-T-Y SOURCE: California Association of REALTORS®

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Median Price of Existing Detached Homes Southern California Regions SOURCE: California Association of REALTORS®

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Orange County

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Sales of Existing Detached Homes and Pacific West Consumer Confidence Orange County, January 2006: 1,195 Units, Down 24.2% Y-T-D, Down 24.2% Y-T-Y UNITS INDEX SOURCE: California Association of REALTORS ® ; The Conference Board

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Median Price of Existing Detached Homes Orange County, January 2006: $699,070, Up 10.2% Y-T-Y SOURCE: California Association of REALTORS ®

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Unsold Inventory Index Orange County, January 2006 : 8.9 MONTHS SOURCE: California Association of REALTORS®

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Median Time on the Market Orange County - Single-Family Homes, 2005 Q4: 37.3 days SOURCE: California Association of REALTORS ®

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New Housing Permits Orange County, January 2006: 1,137 Units, Up 298.9% Y-T-D SOURCE: Construction Industry Research Board

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Sources of Population Growth Orange County (1981-2004) SOURCE: CA Department of Finance THOUSANDS

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Top 10 Home Buyer Surnames Orange County (2005) SOURCE: DataQuick Information Systems

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Where are new OC families originating from? Los Angeles (19,522) Riverside (4,477) San Diego (3,336) San Bernardino (2,698) Santa Clara (970) Total approaching for 2004: 51,803 Total active for 2004: 58,935 Source: NAR Relocation Report 2004 – IRS Data; Item 187-06037

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2006 Forecast

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U.S. Financial Forecast SOURCE: California Association of REALTORS® e-expected, f-estimate

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U.S. Lodging Market Forecast SOURCE: National Association of REALTORS® **Existing home offers of single-family homes and townhouse/coops

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California Economic Forecast SOURCE: California Association of REALTORS®

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California Housing Market Forecast SOURCE: California Association of REALTORS®

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2006 Forecast Risks Interest Rate Risk: Higher rates from: Unexpectedly high expansion Budget deficiency keep running up in rates Sell off of U.S. obligation by outside financial specialists and national banks Consumer Spending Risk: Weaker than anticipated, thwarting development and employment development Refi blast moderates; less value to tap

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2006 Market Opportunities Baby boomers – resigning and differentiating Singles – biggest offer of homebuyers Multi-social and foreigner purchasers – Latinos are quickest developing gathering of purchasers Condos/Infill in metro territories – driven by reasonableness or personal satisfaction issues Continued quality in section and mid-range

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County Economic Profiles Ultimate Information Source Based on information from: • C.A.R. Research and Surveys • U.S. Evaluation Bureau • California Department of Finance • Federal Home Loan Mortgage Corporation • Construction Industry Research Board • Dataquick Information Services The most recent financial information, lodging market patterns and demographic measurements from the California Association of REALTORS® Valuable Sales Tool Contains more than 20 simple to-peruse graphs covering: • Home resale movement and shopper certainty • Median home costs and home loan rates • Housing reasonableness list • Current monetary pointers • Foreclosure rates . . . what\'s more, significantly more! Accessible in 12-month membership or on a one-time premise. Conveyed by means of email in PowerPoint presentation position. For more data : cep@car.org www.rebs.com 213.739.8217

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C.A.R. Research Products INTERNET versus Conventional BUYER From web use to purchaser fulfillment, an exhaustive examination of the home purchasing process. Part USE OF TECHNOLOGY SURVEY Highlights current innovation patterns and instruments connected to REALTORS ® achievement. Review OF CALIFORNIA HOME SELLERS Detailed data on the home offering process at the shopper level.

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C.A.R. Research Products STATE OF THE CALIFORNIA HOUSING MARKET Strategic promoting data created every year. All reports are likewise profit

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