Real Estate

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Real Estate
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Residential Market
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Real Estate Wealth
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Home Ownership
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Homes
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Sacramento Foreclosures
Homes
12,000
10,000
8,000
6,000
4,000
2,000
0
1994
1996
1998
2000
2002
2004
2006
2008
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Making Home Affordable

• Refinance Program
• - 4 to 5 million home owners
• - Relaxes 80 LTV
• - Allows for refinancing
• 2) Good but not helpful

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Making Home Affordable

• Modification Program
• - 3 to 4 million home owners
• - 75 billion
• - Reduce interest
• 2) Principal problem

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Making Home Affordable

• Support low interest rates
• - Additional 200 billion
• - Increase portfolio
• - Increase debt
• 2) Is this wise?

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New Data

• New York Fed
• January 2009
• Alt-A loans (90)
• Subprime Loans (47)
• Owner occupied

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California Owner Occupied
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California Owner Occupied Delinquencies
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Sacramento Commercial Real Estate
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Sacramento Commercial Real Estate

• Deteriorating
• Vacancy rates increasing
• Lease rates declining
• Construction slowing

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Forecast
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Existing Single-Family Median
Price
Change
10
0
-10
-20
-30
-40
Q 1
Q 2
Q 3
Q 4
Q 1
Q 2
Q 3
Q 4
Q 1
Q 2
Q 3
Q 4
2007
2008
2009
U.S.
CA
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Existing Single-Family Home
Sales
Q-o-Q Change
30
20
10
0
-10
-20
Q 1
Q 2
Q 3
Q 4
Q 1
Q 2
Q 3
Q 4
Q 1
Q 2
Q 3
Q 4
2007
2008
2009
U.S.
CA
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Notices of Default
California - (thousands of homes)
114.3
107.1
94.2
83.7
80.4
77.1
75.2
73.5
68.5
68.2
51.3
44.1
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
2007
2008
2009
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Foreclosures
California - (thousands of homes)
79.5
63.2
48.7
47.7
46.8
46.2
43.7
42.6
31.6
24.2
17.6
11.2
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
2007
2008
2009
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U.S. Housing Permits
(000s)
500
400
300
200
100
0
Q 1
Q 2
Q 3
Q 4
Q 1
Q 2
Q 3
Q 4
Q 1
Q 2
Q 3
Q 4
2007
2008
2009
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California Housing Permits
(000s)
35
30
25
20
15
10
5
0
Q 1
Q 2
Q 3
Q 4
Q 1
Q 2
Q 3
Q 4
Q 1
Q 2
Q 3
Q 4
2007
2008
2009
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Summary

• Principal problem
• Sales and prices remain weak
• Foreclosures remain elevated
• Limited new construction
• Weak commercial market

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Thank You

• Visit us at
• www.ucsb-efp.com