Single-family home sales United States

Transcription

1 Single-family home sales United States Millions, SAAR 6.5 Millions, SAAR New homes (R) Existing homes (L) Sources: U.S. Census, National Association of Realtors, Moody s Economy.com.

2 Median existing single-family home price United States US$ thousands Sources: National Association of Realtors, Moody s Economy.com.

3 Median existing single-family home price United States Percent change, year ago Sources: National Association of Realtors, Moody s Economy.com.

4 Fastest declining home prices Ranked by 5-yr percent change Home price, US$ thous. Rank Metro Area 2002q4 2007q4 5-yr percent change 1 Saginaw-Saginaw Township North, MI $94 $ % 2 Detroit-Warren-Livonia, MI $165 $ % 3 Youngstown-Warren-Boardman, OH-PA $84 $ % 4 Lansing-East Lansing, MI $127 $ % 5 Greeley, CO $158 $ % 6 Jonesboro, AR $87 $ % 7 Burlington, NC $129 $ % 8 Cleveland-Elyria-Mentor, OH $134 $ % 9 Owensboro, KY $95 $ % 10 Jackson, TN $101 $92-8.9% Sources: National Association of Realtors, Moody s Economy.com.

5 Fastest declining home prices Ranked by 1-yr percent change Home price, US$ thous. Rank Metro Area 2006q4 2007q4 1-yr percent change 1 Merced, CA $343 $ % 2 Saginaw-Saginaw Township North, MI $96 $ % 3 Modesto, CA $264 $ % 4 Stockton, CA $417 $ % 5 Lansing-East Lansing, MI $135 $ % 6 Sacramento--Arden-Arcade--Roseville, CA $369 $ % 7 Port St. Lucie, FL $245 $ % 8 Vallejo-Fairfield, CA $533 $ % 9 Riverside-San Bernardino-Ontario, CA $409 $ % 10 Punta Gorda, FL $212 $ % Sources: National Association of Realtors, Moody s Economy.com.

6 Top 10 most expensive metro s Ranked by median home price in 2007Q4 Home price, US$ thous. Rank Metro Area 2006q4 2007q4 1-yr percent change 1 San Jose-Sunnyvale-Santa Clara, CA $782 $ % 2 Santa Cruz-Watsonville, CA $756 $ % 3 San Francisco-Oakland-Fremont, CA $756 $ % 4 Salinas, CA $685 $ % 5 Honolulu, HI $626 $ % 6 Santa Rosa-Petaluma, CA $673 $ % 7 San Diego-Carlsbad-San Marcos, CA $592 $ % 8 Los Angeles-Long Beach-Santa Ana, CA $583 $ % 9 Bridgeport-Stamford-Norwalk, CT $463 $ % 10 Santa Barbara-Santa Maria-Goleta, CA $568 $ % Sources: National Association of Realtors, Moody s Economy.com.

7 Single-family housing starts United States Percent change, year ago Sources: U.S. Census Bureau, Global Insight.

8 Homes sit longer on the market United States Millions 4.0 Months Homes available for sale (L) Months supply (R) Sources: National Association of Realtors, Moody s Economy.com.

9 Household properties with foreclosure activity United States, 2007 Thousands Sources: Realty Trac, Wikipedia. Q1 Q2 Q3 Q4

10 Mortgage rates United States Percent yr fixed yr ARM Sources: Mortgage Banker s Association, Moody s Economy.com.

11 Mortgage originations United States US$ trillions, SAAR Total originations Refinance originations Sources: Federal Reserve Board, Moody s Economy.com.

12 Subprime originations United States US$ Billions Value (L) Growth (R) Percent Change, Year Ago Sources: Inside Mortgage Finance, Credit Suisse.

13 Subprime mortgages As share of all loans serviced Percent Sources: Mortgage Banker s Association, Moody s Economy.com

14 Growing share of subprime loans in foreclosure United States Millions of loans Loans serviced (L) Percent in foreclosure (R) Percent Source: Mortgage Bankers Association.

15 Estimated dollar purchase originations 2002 vs Subprime 6% Government 13% Prime-Jumbo 15% Prime- Conforming 66% Alt-A 20% 2006 Government 3% Prime- Conforming 45% Subprime 20% Sources: Inside Mortgage Finance, MBA, FHA, FHFB, Credit Suisse. Prime-Jumbo 12%

16 Percent change in delinquency rate of subprime ARM loans Between 2005Q2 and 2007Q2 Less than 60% 60%-110% 110%-180% More than 180% Sources: Mortgage Bankers Association, Milken Institute.

17 ARM share of mortgages United States Percent Share of all applications Share of all loans Sources: U.S. Federal Housing Finance Board, Freddie Mac, Moody s Economy.com.

18 Percent of ARM loans past due 90 days Percent 7 6 Prime loans Subprime loans Sources: Mortgage Banker s Association, Moody s Economy.com.

19 Percent of refinances resulting in lower loan amount Percent Sources: Freddie Mac, Moody s Economy.com.

20 Net equity extraction United States US$ billions, SAAR Sources: Federal Reserve Board, Moody s Economy.com.

21 Consumer credit debt United States US$ billions Sources: Federal Reserve Board, Moody s Economy.com.

22 Market absorption of unfurnished apartments rented within 3 months Percent Median asking rent Absorption rate Sources: U.S. Census Bureau, Moody s Economy.com.

23 Office vacancy rates United States Percent Suburban 12 Metropolitan 10 8 Downtown Sources: CB Commercial, Moody s Economy.com.

24 Office rents in 10 largest cities Annual rent per sq. ft. for class A space in CBD* Metro Rent (sq.ft.) % change, year ago New York $ Wash. D.C. $ Los Angeles $ Boston $ Miami $ Chicago $ Philadelphia $ Houston $ Atlanta $ Dallas $ Sources: BusinessWeek (April 14, 2008), CB Commercial. *CBD= central business district

25 Commercial and industrial loans Commercial bank assets US$ billions Sources: Federal Reserved Board, Moody s Economy.com, Milken Institute.

26 Delinquency rates At all commercial banks Percent Residential real estate loans Commercial loans Sources: Federal Reserved Board, Moody s Economy.com.

27 Real commercial property price index By property sector Index (2000Q4=100) Apartment Industrial Office Retail Source: Moody s Economy.com.

28 Flow of commercial mortgages All sectors US$ billions, SAAR Sources: Federal Reserve, Global Insight.

29 Flow of commercial mortgages: asset-backed securities US$ billions, SAAR Sources: Federal Reserve, Global Insight.

30 Flow of commercial mortgages: REITs US$ billions, SAAR Sources: Federal Reserve, Global Insight.

31 NCREIF property index Rates of return Percent Sources: NCREIF, Moody s Economy.com.

32 NCREIF property index* Rates of return, by property sector Percent *2-quarter moving average applied Apartment Retail Office Industrial Sources: NCREIF, Moody s Economy.com.

33 Liquidity vs. Valuations United States US$ billions, SAAR NCREIF index, % - (R) Percent Flow of commercial mortgages, US$ - (L) Sources: NCREIF, Moody s Economy.com.

34 Mortgage loan frauds reported United States Thousands Source: Financial Crimes Enforcement Network

35 Subprime crisis overview December current S&P 500 Index Dec. 06 Ownit Mortgage, a subprime lender, files for bankruptcy Feb. 07 HSBC says it set aside $10.6b for bad loans, incl. subprime 12/06 Apr. 07 New Century, a mortgage broker, files for bankruptcy Jul. 07 Two Bear Stearns hedge funds file for bankruptcy Aug. 07 Fed cuts discount rate to 5.75% Sources: BusinessWeek (March 31, 2008), Standard & Poor s, Global Insight. Jan. 11, 08 BofA agrees to buy Countrywide Oct. 07 Merrill announces $7.9b in subprime write-downs, surpassing Citi s $6.5b Jan. 30, 08 Fed cuts discount rate to 3.5% 07Q1 07Q2 07Q3 07Q4 Mar. 11, 08 Fed offers troubled banks as much as $200b Mar. 16, 08 JP Morgan offers to buy Bear Mar. 18, 08 Fed cuts discount rate to 2.4%; Fed funds rate to 2.25% 08Q1

36 Subprime write-downs MBS and CDOs Note: As of April 21, 2008, financial institutions had recognized subprimerelated losses or write-downs exceeding U.S. $245 billion. Sources: The Banker (March 2008), Wikipedia. Loss Rank Company (US$ billions) 1 Citigroup $ UBS $ Merrill Lynch $29.1 4HSBC $ Morgan Stanley $11.5 6AIG $ Bank of America $8.0 8 Deutsche Bank $7.0 9 JP Morgan Chase $ Wachovia $5.0

37 Bond insurance losses Stemming from subprime debt US$ billions 20 $19.0* $2.5 $ *Projected, Source: Bloomberg Markets (March 2008).

38 Real gross domestic growth United States, 2000 prices Compound annual growth rate Sources: BEA, Global Insight.

39 Consumer sentiment University of Michigan, diffusion index Index (1966Q1=100) Sources: University of Michigan, Federal Reserve Bank of St. Louis.

40 Real consumer spending United States Percent change, year ago Sources: BEA, Global Insight.

41 Retail sales Excluding motor vehicles Percent change, year ago Sources: U.S. Census, Global Insight.

42 Crude oil spot price West Texas Intermediate Dollars per barrel Sources: Wall Street Journal, Global Insight.

43 Corporate profits Profits before tax (without IVA and CCadj.) Percent change, year ago Sources: BEA, Global Insight.

44 Corporate spread Moody s corporate Aaa minus 10-yr treasury bond Percentage Points Sources: Federal Reserve, Moody s Economy.com, Milken Institute.

45 Interest rates Fed funds rate vs. rate of long-term government bonds Percent Government bonds Fed funds rate Sources: Federal Reserve, Global Insight.

46 Yield curve 10-year government bond minus fed funds rate Percent Sources: Federal Reserve, Milken Institute.

47 Foreign purchases of U.S. securities Net foreign purchases US$ billions Sources: BEA, Global Insight.

48 Real estate investment trusts (REIT) sector Net acquisition of financial assets US$ billions Sources: Federal Reserve, Milken Institute.

49 Employment picture United States Percent Unemployment rate (L) Percent change, year ago Employment change (R) Sources: BLS, Global Insight.

50 Construction vs. total non-farm employment United States Percent change, year ago Construction Total non-farm Sources: U.S. Census, Moody s Economy.com.

51 Wages and unemployment United States Percent Unemployment rate (L) Percent change, year ago Real wages (R) Sources: BLS, Global Insight.

52 Construction-put-in-place United States Percent change, year ago 30 Non-residential Residential Sources: U.S. Census, Moody s Economy.com.

53 Housing affordability index United States Base= Sources: NAR, Global Insight.

54 Consumer inflation rate Consumer prices and wages Percent change, year ago Real wages Core CPI Sources: BLS, Global Insight.

55 Dollar at record lows Major currencies index (in real terms) Index (March 1973=100) Sources: Federal Reserve, Moody s Economy.com.

56 Housing Starts -From Peak to Trough in Starts Source: Reuters Ecowin Pro, BNP Paribas.

57 Ratio of Mortgages to NGDP & Residential Investment Source: Reuters Ecowin Pro, BNP Paribas.

58 S&P Case-Shiller Composite- 10 & New Home Sales Median Price Source: Reuters Ecowin Pro, BNP Paribas.

59 Household Affordability Rising as Home Prices Fall Source: Reuters Ecowin Pro, BNP Paribas.

60 Institutional Holdings of Mortgages and Mortgage Backed Securities Source: Reuters Ecowin Pro, BNP Paribas.

61 Fannie Mae Financing Rises Sharply Source: Reuters Ecowin Pro, BNP Paribas.

62 Starts for Sale vs. New Home Sales Source: Reuters Ecowin Pro, BNP Paribas.

63 Inventories Remain Near Their Peaks Source: Reuters Ecowin Pro, BNP Paribas.

64 MBA Mortgage Delinquency Rates Climbing Source: Reuters Ecowin Pro, BNP Paribas.

65 Mortgage Rates Haven t Benefited Much from Fed Ease Source: Reuters Ecowin Pro, BNP Paribas.

66 Financial Losses (Actual & Potential) Source: Reuters Ecowin Pro, BNP Paribas.

67 Credit Lending Standards Tightening Source: Reuters Ecowin Pro, BNP Paribas.

68 Net Demand for Com. Real Estate Loans Leads Business Investment in Structures (% y/y) Source: Reuters Ecowin Pro, BNP Paribas.

69 Real Income and Real Spending Falling Faster then Payrolls Source: Reuters Ecowin Pro, BNP Paribas.

70 Payrolls Decline During Recessions Source: Reuters Ecowin Pro, BNP Paribas.

71 10 Year Fixed CMBS Spreads June April 24, 2008 Source: Bloomberg

72 US Sales Volume Q vs. Q (Transactions >$25mm) $140.0 $120.0 $116.0 $100.0 $ Billions $80.0 $60.0 $71.8 $40.0 $20.0 $0.0 $7.2 $18.7 $11.9 $7.9 $2.9 $5.0 $3.6 $5.7 $1.6 $20.3 Office Retail Multifamily Hotel Industrial Total (All Q Q Properties) 17.5% of 2007 Source: Real Source Analytics

73 US CMBS Issuance $70 $60.9 $60 $ Billions $50 $40 $30 $20 $5.1 $10 $0 Q Q Source: Commercial Mortgage Alert

74 Commercial Mortgages Outstanding (Excluding HUD / Gov't) at 12/31/07, Total: $3.0 Trillion Agency & GSE $135,998 4% Life Co's, $299,107 10% Finance Co's $59,116 2% REIT's, $44,073 1% All Other, $92,200 3% CMBS $776,510 25% Commercial & Savings Banks $1,687,363 55% Source: Mortgage Bankers Association

75 Net Increase in Commercial Mortgages in 2007 ($296 Billion Total) Life Co's 6% $17.6 billion All Other 2% $4.9 billion Commercial Banks/Savings Banks 40% $117.6 billion CMBS, 52% $157.5 billion Source: Mortgage Bankers Association

76 CMBS Default By Year of Occurrence 1.40% 1.20% 1.30% 1.00% 0.80% 0.60% 0.40% 0.46% 0.87% 0.85% 0.68% 0.38% 0.20% 0.23% 0.00% Source: Commercial Mortgage Alert

77 US CMBS Issuance Source: Commercial Mortgage Alert

78 Typical CMBS Conduit Pool % of Pool - 70% LTV 100.0% 90.0% 80.0% AA 62% LTV BBB 67% LTV A 65% LTV 70.0% 60.0% 50.0% 40.0% AAA, 86.0% of Total Loan 60% LTV 30.0% 20.0% 10.0% 0.0% CMBS Conduit Loan

79 2007 Large Loan CMBS Deals 100.0% 90.0% 80.0% 70.0% 60.0% 50.0% Bridge Equity / Equity, 100% LTV Pref. Equity, 90% LTV Mezz, 85% LTV B-Note, 65% LTV 40.0% 30.0% 20.0% A-Note, 45% LTV 10.0% 0.0% Loan Breakout

80 Typical CRE CMBS / CDO Structure

81 CMBS Deal Subordination Levels Have Fallen Substantially Source: Bloomberg

82 CMBS Fixed Rate Transactions I/O Loans Source: Wachovia Capital Markets, Intex Solutions

83 US REITS Historical Annual Compounded Returns Index 5 1/31/07 2/1/07 Today MSCI US REIT (RMS) 26.55% (14.06%) MSCI Emerging Markets EAFE Russell 1000 Value High Yield DJIA S & P % 16.85% 11.32% 9.95% 7.31% 6.82% 22.05% 4.19% (5.86%) (0.46%) 3.02% (1.73%)