3/18/2012 RESIDENTIAL MARKET UPDATE 2012 Van Rose, MIRM President, Rose and Womble New Homes 15 Year Closing Hampton Roads Residential Inventory New Construction & Resale History 2007 to 2012 15,000 14,000 13,000 12,000 11,000 10,000 9,000 8,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source : 2007 2008 2009 2010 2011 2012 Source: Analysis by: Hampton Roads FORECLOSURES GOING DOWN….. 2011 Average Closing Price 700 45.0% 642 40.0% 600 35.0% Existing Homes: 500 30.0% $208,409 ▼ 9.6% 400 25.0% 454 20.0% 300 15.0% 200 New Homes: 10.0% $309,221 ▼ 3.3% 100 36 5.0% 0 0.0% Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Total Short Sale/ Foreclosure Closings % Market Share Source: Analysis by: Source: Analysis by: 1
3/18/2012 Hampton Roads The Return to Detached…. Average Closing Price History $450,000 #1 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $- 00 01 02 03 04 05 06 07 08 09 10 11 Existing Homes New Construction Source: Average Size New Construction Closing Mix New Construction Single Family Detached 2003 $105 per sq ft 90% 80% 2,559 SF 70% 60% 50% 2007 $154 per sq ft 40% 2,746 SF 30% 20% 10% 2011 $125 per sq ft 0% 2,484 SF 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Detached TH/Plex Condo Source: Source: Existing Home Average Closing Price Returning to a Balanced Market Versus Standard Appreciation Source: Analysis by: 2
3/18/2012 Returning to a Balanced Market Returning to a Balanced Market New Construction Existing Homes Months to Absorb Current Inventory Months to Absorb Current Inventory 18.0 18.0 16.0 16.0 14.0 14.0 12.0 12.0 10.0 10.0 8.0 8.0 6.0 6.0 4.0 4.0 2.0 2.0 0.0 0.0 Detached Attached Detached Attached Source: Analysis by: Source: Analysis by: Hampton Roads Net Migration Hampton Roads 2011 Top 5 Builders Hampton Norfolk Isle of Wight Source: Source: Internal Revenue Service Analysis by: # 5 # 4 79 104 3
3/18/2012 # 2 # 3 106 155 # 1 178 Consumer Confidence Index 100 90 80 70 60 50 40 30 20 10 0 Source: Bloomberg 4
3/18/2012 Builder Confidence Index Builder Financial Improvements 100 25% 90 20.8% 20% 80 17.4% 70 15.3% 14.7% 14.4% 15% 60 13.1% 50 10% 7.7% 40 30 5% 20 0.5% 10 0% Gross Profit Margin Operating Expenses Net Profit Margin 0 ‐ 3.0% ‐ 5% 2006 2008 2010 Source: Bloomberg Source: NAHB The Housing Cycle has Bottomed Inventory is Going Down Building Permits 15,000 1984 ‐ 2011 with 2015 Forecast 14,000 16000 13,000 14000 12,000 12000 11,000 10000 10,000 8000 9,000 6000 8,000 4000 7,000 6,000 2000 5,000 0 Jan ‐ 07 Apr ‐ 07 Jul ‐ 07 Oct ‐ 07 Jan ‐ 08 Apr ‐ 08 Jul ‐ 08 Oct ‐ 08 Jan ‐ 09 Apr ‐ 09 Jul ‐ 09 Oct ‐ 09 Jan ‐ 10 Apr ‐ 10 Jul ‐ 10 Oct ‐ 10 Jan ‐ 11 Apr ‐ 11 Jul ‐ 11 Oct ‐ 11 Jan ‐ 12 Source: Analysis by: Interest Rates are LOW! 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 30 ‐ Yr Fixed Rate Source: Freddie Mac 5
3/18/2012 Short Sales Construction Lending Existing Homes Current Inventory 9% Regular Listings 19% Short Sale 72% Bank/ Govt Source: Analysis by: LOCAL MARKET Ever Changing Buyer Profile IMPROVEMENT INDICATORS Resale Inventory 21% New Homes Inventory 14% Price Changes 26% Foreclosure Sales 26% Building Permits 37% Interest Rate 0.25% Home Affordability Index 70% approx Capture Ratio 1:11 (was 1:25) 2012? Cautiously Optimistic 6
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