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2013 Governor’s Housing Conference

2013 Governor’s Housing Conference. The Future of Homeownership Making Homeownership Affordability September 27, 2013. Daniel Whitehurst of Clark Turner Homes. Introduction. Clark Turner Homes (www.clarkturner.com) Small-Mid sized builder headquartered in Harford County

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2013 Governor’s Housing Conference

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  1. 2013 Governor’s Housing Conference The Future of Homeownership Making Homeownership Affordability September 27, 2013 Daniel Whitehurst of Clark Turner Homes

  2. Introduction Clark Turner Homes (www.clarkturner.com) Small-Mid sized builder headquartered in Harford County Townhomes to Large Luxury Customs Land Developers General Contractor Daniel Whitehurst President of Clark Turner Companies Mount St Mary’s University – Business Johns Hopkins University – Masters in Real Estate President of HBAM – Harford and Cecil County

  3. Outline I’ve been asked to talk about: • The Housing Recovery • Who are the buyers today • What do buyers want today • My take on the housing outlook

  4. The Recovery… Nationally • Jobs… Jobs… Jobs… • Mortgage Interest Rates • Realization of values • Frugal Fatigue • Stock Market

  5. % of Job Losses during Recession RECOVERY

  6. # of New Home Sales RECOVERY

  7. Leading Indicator: Auto Sales RECOVERY

  8. RECOVERY

  9. Who are the buyers? • Who is left to buy? • Move Up Buyers ?

  10. Move ups: Functionally Obsolete

  11. Sellers 90% Mortgage Negative Equity or “Underwater” Proceeds form Sale available to payoff mortgage.

  12. Negative Equity or “Underwater” – much better after 6 years of payments

  13. Who are the buyers? • Who is left to buy? • Move Up Buyers – Many are stuck • Empty Nesters

  14. Rate Locked and Anchored Why make the move?

  15. Who are the buyers? • Who is left to buy? • Move Up Buyers – Many are stuck • Empty Nesters – Interest Rate Anchor • Own vs. Rent -

  16. Affordability: Home Price Decline in Home Value: 22.5%

  17. Affordability: Payment Decline in Home Payment: 39.7%

  18. Own vs. Rent New Local Apartment Complex $600.00!! Payment: Average 3 Bedroom Townhome Harford County

  19. New Apts = Tough Competition Monroe Street Apartments - A Bozzuto Project

  20. Who are the buyers? • Who is left to buy? • Move Up Buyers – Many are stuck • Empty Nesters – Interest Rate Anchor • Own vs. Rent – Very competitive • Relocated Workers ? • First Time Buyers ?

  21. Who are the first time buyers? • Gen y “Millennials” • Age today: 14-32 • In 5 Years: 19-37

  22. A 36 Year old Gen Y was 29 years old in 2006 when market was hot. They are prime candidates to be underwater on their homes. Baby Boomers GEN X GEN Y GEN Z

  23. Buyers Considerations

  24. Finance • Considerations: • Monthly Payments (Price and Interest Rate) • Property Taxes • Down payment Requirement

  25. Case Schiller Home Price Index 3% Growth TODAY

  26. Median Income & Current Interest Rate Index $67,974 3.41% TODAY $39,939 6.83%

  27. Product Single Family or Townhome Large lot or small lot

  28. Product Size vs. quality

  29. Hot Trend: Living Triangle

  30. Hot Trend: Large Islands

  31. Hot Trend:Drop Zones Eliminating the Living Room

  32. Hot Trend: Outdoor Living

  33. Hot Trend: Exposed Wood Beams

  34. Hot Trend: Large Showers Eliminating the Tub

  35. Location & Community • Urban or Suburban • Location vs Dream House • Schools • Amenities (Walking Trails, Pools, Fitness, etc) • Wine Clubs • Overall Quality of Life

  36. The uncertain recovery • Interest Rates • Student Loans

  37. % of Households with Student Debt

  38. Total Student Debt

  39. The uncertain recovery • Interest Rates • Student Loans • New Const. Regulation • Sequestration • Mortgage Tax Deduction

  40. Any Questions? To end with positive news… • New Car Sales UP! • Stock Market UP! • Home Pricing UP! (slowly) • Unemployment Rate DOWN!

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