q42013 template tempc c… · the recession $1,667 42% conforming loan limit** u.s. fha loan limit...

Corpus Christi AreaLocal Market Report, First Quarter 2016

Today's Market…

27.0%

Local Trend

*Note: Equity gain reflects price appreciation only

Gains in the last 3 years have extended the trend of positive price growth after

the recession$1,667

42%

Conforming Loan Limit**

U.S.

FHA Loan Limit

Price Activity$215,767$177,100

Corpus ChristiCurrent Median Home Price (2016 Q1)

$625,500Local Median to Conforming Limit Ratio

$417,000

not comparable

$48,200

$625,500

1-year (4-quarter) Appreciation (2016 Q1) 2.4%Prices are up from a year ago, but price

growth is slowing

Corpus Christi U.S.

$39,833

3-year (12-quarter) Appreciation (2016 Q1)

6.1%

$50,800

22.6%3-year (12-quarter) Housing Equity Gain*

9-year (36 quarters) Housing Equity Gain*

Most buyers in this market have access to government-backed financing

$271,050

Note: limits are current and include the changes made in November of 2012 and extended in November of 2013

$37,6007-year (28 quarters) Housing Equity Gain*

$46,700

Local Price Trends

The Corpus Christi market is part of region 10 in the NAR governance system, which includes all of Louisiana and Texas. The 2016 NAR Regional Vice President representing region 10 is Matthew Ritchie.

Local NAR Leadership

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

-10%

-5%

0%

5%

10%

15%

20%

25%

2016Q1

Q32015Q1

Q32014Q1

Q32013Q1

Q32012Q1

Q32011Q1

Q32010Q1

Q32009Q1

Q32008Q1

Q32007Q1

Median Price (Red Line) and One-year Price Growth

$53,5455-year (20-quarter)* $68,7277-year (28 quarters)* $64,606 $59,758

1-year (4-quarter)

9-year (36 quarters)* $63,252

Benefits of Ownership: Total Equity Appreciation

Price Activity CorpusChristi U.S.$7,102 $15,781

Total Equity Gained** through 2016 Q1 from quarter in which home was of purchased

Local Trend

$49,3563-year (12-quarter)* $45,151Price appreciation and principle

payments in the last 3 years have boosted total equity growth since the

recession

*Note: Equity gain reflects price and principle payments since purchase, prevailing 30-year fixed rate mortgage at time of purchase and a 10% downpayment. Downpayment is not included in total equity

$16,435

$30,059If purchase in 2005, the national price peak $81,059

$7,102

$59,538

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

2015 Q12013 Q12011 Q12009 Q12007 Q12005 Q12003 Q1

Total Equity Accrued to Owner by Year and Quarter of Purchase

Natural Resour 12.4% 24.5 Natural 5.0%

#N/A #N/A #N/A #N/A

#N/A #N/A #N/A #N/A

Manufacturing 4.6% 9.1 Manufac8.5%

Trade/Transpo 18.4% 36.4 Trade/T 18.8%

Information 1.0% 2 Informa1.9%

Financial Act 4.3% 8.6 Financi5.7%

Prof. & Busin 8.8% 17.4 Profess14.0%

Educ. & Heal 15.6% 30.9 Educat 15.8%

Leisure & Ho 13.6% 27 Leisure10.7%Other Service 4.1% 8.1 Other S3.9%

Government 17.2% 34.1 87.6% Govern15.6% 100.0%

#N/A #N/A #N/A #N/A

#N/A #N/A #N/A #N/A

Information

Financial Activities

Prof. & Business Services

Educ. & Health Services

Leisure & Hospitality

Service Providing Excluding Government Other Services

Government

1,400

NA

NA

12-month Job Change (Feb)

Year-ago Unemployment Rate

2.0%1-year (12 month) Job Growth Rate

8,300

4,500

Not Comparable

Corpus Christi's unemployment situation is worse than the national average and weighs on confidence

Not Comparable

4,400

36-month Job Change (Mar)

Texas's economy is growing, but decelerated from last month's 2.55% change and lags the rest of the nation

12-month Job Change (Mar)

Local Economic Outlook Corpus Christi U.S.

U.S.

State Economic Activity Index

Construction

0

5.0%

5.5%

2.3%

Corpus Christi Area

Goods Producing

-300 Manufacturing

800

Local employment growth is strong compared to other markets

5.6%

4.7%

Current Unemployment Rate (Mar)

3.1%

Drivers of Local Supply and Demand…

Not Comparable

12-month Employment Change by Industry in the Corpus Christi Area (Mar - 2016)

100

500

U.S.Texas

NA

Natural Resources and Mining

Natural Resources/Mining/Construction

NA

Share of Total Employment by Industry

12-month change (2016 - Mar)

36-month change (2016 - Mar)10.5%13.1%

2.5%

200

600

1,100

Employment has held up and is on an upward trend

100

Trade/Transportation/Utilities

Natural Resources/Mining/Con

struct12.4% Manufacturi

ng4.6%

Trade/Transportation/Uti

lities18.4%

Information1.0%


4.3%


8.8%

Educ. & Health

Services15.6%


13.6%

Other Services

4.1%

Government

17.2%


struct5.0%

Manufacturing

8.5%

Trade/Transportation/

Utilities18.8%

Information1.9%Financial

Activities5.7%

Professional &

Business Services14.0%

Educational & Health Services15.8%


10.7%

Other Services

3.9%

Government

15.6%

Construction continues to decline from last year

The current level of construction is 35.6% above the long-term average

While new construction is the traditional driver of supply in real estate, foreclosures and short-sales now have a strong impact on inventories, particularly at the local level. Rising inventories, through construction or distressed sales, place downward pressure on the median home prices.

Local Fundamentals

11.3%

not comparable

12-month Sum of 1-unit Building Permits through Mar 2016

1,403

Corpus Christi

not comparable

8-year average for 12-month Sum of 1-Unit Building Permits

Single-Family Housing Permits (Mar 2016) 12-month sum vs. a year ago

-1.3%

1,035 Production above trend for an

extended period of time could cause prices to moderate as inventory is built

U.S.New Housing Construction

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

State Total Foreclosure Rate vs. U.S Average(U.S. Average in Blue Dashed Line)

Source: Mortgage Bankers' Association

0

200

400

600

800

1,000

1,200

1,400

1,600

Construction: 12-month Sum of Local Housing Permits (Historical Average Shown in Red Dashed Line)

Monthly Mortgage Payment to Income

Ratio for 2016 Q1

Ratio for 2015

14.5%

Historically strong and an improvement over the fourth quarter of 2015

15.6%

2.8

Corpus Christi

Corpus Christi

Median Home Price to Income

8.9%

1.6

1.52.72.6

The price-to-income ratio eased, but could be better

Affordability

8.6%

U.S.

Ratio for 2016 Q1

Ratio for 2015

Historical Average More affordable than most markets19.5%10.5%

Affordable compared to most marketsHistorical Average 1.5

U.S.

0%

5%

10%

15%

20%

25%

30%

2015201320112009200720052003200119991997

Long-Term Trend: Ratio of Local Mortgage Servicing Cost to Income (Local Historical Average Shown in Red, U.S. Average in Green)

0%

2%

4%

6%

8%

10%

12%

2016 Q12015 Q42015 Q32015 Q22015 Q12014 Q42014 Q32014 Q2

Recent Trend - Local Mortgage Servicing Cost to Income(Historical Average Shown in Red Dashed Line)

The first quarter of 2016 was marked by paroxysms in financial, energy, and commodity markets. The uncertainty in China and the emerging-market economies, the gathering doubt about the sustainability of the modern European project, and weakness in domestic growth were the issues of the early days of 2016. With regard to the mortgage market, the year began after the FED started its tightening cycle with the first rate hike this past December. However, since the start of the year mortgage rates have dropped as the FED held off on expected rate hikes. The 30-year fixed-rate mortgages eased from 3.9 percent in the 4th quarter of 2015 to 3.7 percent in the first quarter of 2016. The 10-year Treasury fell to 1.92 percent which is the lowest rate after Q4 2012. Rates are likely to remain low through the spring as the market deals with international instability and mixed signals for the domestic economy. NAR is now forecasting fewer rate hikes by the FED in 2016 and as a result the 30-year fixed rate mortgage is now expected to average just 4.3 percent for 2016.”

The Mortgage Market

0

40

80

120

160

200

240

280

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

2016 Q1Q32015 Q1Q32014 Q1Q32013 Q1Q32012 Q1Q32011 Q1

30-year Fixed Mortgage Rate and Treasury Bond Yield

Spread (left axis) 30-Year FRM (Right axis) 10-Year Treasury Bond (Right Axis)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2015201320112009200720052003200119991997

Ratio of Local Median Home Price to Local Average Income (Local Historical Average Shown in Red, U.S. Average in Green)

Texas U.S.

2016 - Apr 3.7% 3.8%REALTORS® expect weaker price

growth in Texas than in the U.S. in the next 12 months. Their price

expectations for the local market are more modest than a year ago.Prior 12 months 3.9% 3.9%

REALTOR® Price Expectations

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

REALTOR® Price Expectations for the Next 12 Months(U.S. Average in Blue Dashed Line)

Source: NAR

More information on the OMB's geographic definitions can be found at http://www.whitehouse.gov/omb/inforeg_statpolicy/

Aransas County, Nueces County, and San Patricio County

The Corpus Christi area referred to in this report covers the geographic area of the Corpus Christi metro area as officially defined by the Office of Management and Budget of the U.S. Government. The official coverage area includes the

following counties:

Geographic Coverage for this Report

Corpus Christi AreaLocal Market Report, Fourth Quarter 2015

Today's Market…

23.3%

Local Trend



the recession$1,633

43%

Conforming Loan Limit**

U.S.

FHA Loan Limit




$417,000

not comparable

$40,300

$625,500


growth is slowing

Corpus Christi U.S.

$42,233

3-year (12-quarter) Appreciation (2015 Q4)

6.5%

$44,600



Most buyers in this market have access to government-backed financing

$271,050



$48,900

Local Price Trends

The Corpus Christi market is part of region 10 in the NAR governance system, which includes all of Louisiana and Texas. The 2016 NAR Regional Vice President representing region 10 is Matthew Ritchie.


$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

-10%

-5%

0%

5%

10%

15%

20%

25%

2015Q4

Q22014Q4

Q22013Q4

Q22012Q4

Q22011Q4

Q22010Q4

Q22009Q4

Q22008Q4

Q22007Q4

Q22006Q4


$54,7295-year (20-quarter)* $62,7647-year (28 quarters)* $57,642 $52,606

1-year (4-quarter)

9-year (36 quarters)* $65,311




Local Trend



recession

*Note: Equity gain reflects price and principle payments since purchase, prevailing 30-year fixed rate mortgage at time of purchase and a 10% downpayment. Downpayment is not included in total equity

$16,571

$11,104If purchase in 2005, the national price peak $66,525

$7,506

$54,553

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

2014 Q42012 Q42010 Q42008 Q42006 Q42004 Q42002 Q4

Total Equity Accrued to Owner by Year and Quarter of Purchase


#N/A #N/A #N/A #N/A

#N/A #N/A #N/A #N/A



Information 1.1% 2.2 Informa1.9%



Educ. & Heal 15.5% 31.1 Educat 15.8%

Leisure & Ho 12.9% 25.8 Leisure10.4%Other Service 4.1% 8.3 Other S4.0%

Government 16.8% 33.6 85.8% Govern15.5% 100.0%

#N/A #N/A #N/A #N/A

#N/A #N/A #N/A #N/A

Information



Educ. & Health Services



Government

900

NA

NA

12-month Job Change (Nov)


2.1%1-year (12 month) Job Growth Rate

13,000

2,900

Not Comparable

Corpus Christi's unemployment situation is worse than the national average and weighs on confidence

Not Comparable

3,200

36-month Job Change (Dec)

Texas's economy is growing, but decelerated from last month's 2.75% change and lags the rest of the nation



U.S.


Construction

1,400

5.0%

5.6%

1.5%

Corpus Christi Area

Goods Producing

-400 Manufacturing

-500

Local employment growth is poor and needs to improve

5.2%

4.5%

Current Unemployment Rate (Dec)

3.2%


Not Comparable

12-month Employment Change by Industry in the Corpus Christi Area (Dec - 2015)

100

-100

U.S.Texas

NA

Natural Resources and Mining

Natural Resources/Mining/Construction

NA


12-month change (2015 - Dec)

36-month change (2015 - Dec)10.6%12.9%

2.5%

100

500

800

Employment growth has eased, but remains positive

100



struct14.2% Manufacturi

ng4.8%

Trade/Transportation/Uti

lities18.3%

Information1.1%


4.3%


8.0%

Educ. & Health

Services15.5%


12.9%

Other Services

4.1%

Government

16.8%


struct4.9%

Manufacturing

8.7%


Utilities19.1%


Activities5.8%

Professional &




10.4%

Other Services

4.0%

Government

15.5%

Construction continues to decline from last year



Local Fundamentals

9.7%

not comparable

12-month Sum of 1-unit Building Permits through Dec 2015

1,390

Corpus Christi

not comparable


Single-Family Housing Permits (Dec 2015) 12-month sum vs. a year ago

-0.9%

1,030 Production above trend for an

extended period of time could cause prices to moderate as inventory is built


0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%



0

200

400

600

800

1,000

1,200

1,400

1,600



Ratio for 2015 Q4

Ratio for 2015

15.1%

Historically strong and an improvement over the third quarter of 2015

15.6%

2.8

Corpus Christi

Corpus Christi


9.3%

1.6

1.62.72.7

The price-to-income ratio eased, but could be better

Affordability

9.2%

U.S.

Ratio for 2015 Q4

Ratio for 2015

Historical Average More affordable than most markets19.5%11.0%


U.S.

0%

5%

10%

15%

20%

25%

30%

2015201320112009200720052003200119991997


0%

2%

4%

6%

8%

10%

12%

14%

2015 Q42015 Q32015 Q22015 Q12014 Q42014 Q32014 Q22014 Q1


Despite indications of economic strength early in the 4th quarter, the Federal Reserve held of its much anticipated rate increases until mid-December. However, a fresh set of weak economic numbers centered on a slowing Chinese economy, excess oil, and the potential impacts on domestic oil exploration and manufacturing softened domestic economic growth in the 4th quarter. As a result, Treasuries slumped as investors moved money into this safe haven and mortgage rates benefited. The average 30-year fixed rate mortgage eased modestly from 4.0 percent in the 3rd quarter to 3.9 percent in the 4th. The 10-year Treasury did not fall as much MBS and as a result the spread between them eased from 173 basis points to 171. While mortgage rates remained cheap, lenders were hit with the implementation of the new TILA-RESPA Integrated Disclosure rules (TRID) on October 3rd. Some lenders struggled to comply and a result roughly 10 percent of settlements were delayed by roughly 8 days on average, though few were canceled. Rates are likely to remain low through the spring as the market deals with international instability and the FED pulls back from planned rate hikes, but some lenders may continue to have issues with the new settlement procedures. NAR is now forecasting fewer rate hikes by the FED in 2016 and as a result the 30-year fixed rate mortgage is now expect to average just 4.3 percent for 2016, down from earlier estimates near 5.0 percent.

The Mortgage Market

0

40

80

120

160

200

240

280

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

2015 Q4Q22014 Q4Q22013 Q4Q22012 Q4Q22011 Q4Q22010 Q4



0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2015201320112009200720052003200119991997


Texas U.S.

2015 - Dec 3.1% 3.3%REALTORS® expect weaker price

growth in Texas than in the U.S. in the next 12 months. Their price

expectations for the local market are more modest than a year ago.Prior 12 months 3.9% 3.4%

REALTOR® Price Expectations

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

REALTOR® Price Expectations for the Next 12 Months(U.S. Average in Blue Dashed Line)

Source: NAR




following counties:


Local Price Trends

The Corpus Christi market is part of region 10 in the NAR governance system, which includes all of Louisiana and Texas. The 2014 NAR Regional Vice President representing region 10 is David McKey.


Local Trend



$38,300


growth is slowing

Corpus Christi U.S.

$27,133

3-year (12-quarter) Appreciation (2013 Q4)10.2%

$23,100



Most buyers in this market have access to government-backed financing$271,050

U.S.

FHA Loan Limit




$417,000

not comparable

-$22,400



the recession-$1,900

37%

Conforming Loan Limit** $625,500

Corpus Christi AreaLocal Market Report, Fourth Quarter 2013

Today's Market…

13.3%

$0$20,000$40,000$60,000$80,000

$100,000$120,000$140,000$160,000$180,000

-10%

-5%

0%

5%

10%

15%

20%

2013Q4

Q22012Q4

Q22011Q4

Q22010Q4

Q22009Q4

Q22008Q4

Q22007Q4

Q22006Q4

Q22005Q4

Q22004Q4





Local Trend

7-year (28 quarters)* $35,055 $9,428

1-year (4-quarter)



recession

*Note: Equity gain reflects price and principle payments since purchase, prevailing 30-year fixed rate mortgage at time of purchase and a 10% down payment. Down payment is not included in total equity

$15,042If purchase in 2005, th enational price peak $35,926

9-year (36 quarters)* $53,824 $9,859

$27,5715-year (20-quarter)* $26,921

$10,485

$25,476

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

$100,000

2012 Q42010 Q42008 Q42006 Q42004 Q42002 Q42000 Q4

Total Equity Accrued to Owner by Year and Quarter of PurŎhase


#N/A #N/A #N/A #N/A

#N/A #Nt/A #N/A



Information 1.0% 1.9 Informa1.9%



Educ. & Heal 16.6% 32.3 Educat 15.6%

Leisure & Ho 12.1% 23.5 Leisure10.2%Other Service 4.1% 8 Other S4.0%

Government 17.3% 33.6 85.3% Govern16.0% 100.0%#N/A #N/A #N/A #N/A#N/A #N/A #N/A #N/A

Information Financial Activities Prof. & Business Services Educ. & Health Services



Government


-10000

800


Texas

NA Natural Resources and Mining Natural Resources/Mining/Construction

NA

12-month change (2013 - Dec)

36-month change (2013 - Dec)8.9%11.7%

3.0%

18,700

6,800 Employment growth has eased, but remains positive

Not Comparable


12-month Employment Change by Industry in the Corpus Christi Area (Dec - 2013)

100

200

U.S.

U.S.


Construction

3,900

6.7%

7.9%3.6%

Corpus Christi Area

Goods Producing

-200 Manufacturing

800

Local employment growth is strong compared to other markets1.7%1-year (12 month) Job Growth Rate

5.4%

5.7%

Current Unemployment Rate (Dec)


Not Comparable

Unemployment in Corpus Christi is better than the national average and

improving

Not Comparable

6,800


Texas' economy is growing, but decelerated from last month's 3.15% change and lags the rest of the nation


3.1%


1,300

NA

NA

12-month Job Change (Nov)


struct14.7%

Manufacturing

5.0%

Trade/Transportation/U

tilities17.5%

Information1.0%


4.0%


7.8%

Educ. & Health

Services16.6%


12.1%

Other Services

4.1%

Government

17.3%


struct4.7%

Manufacturing

8.8%


Utilities19.2%


Activities5.8%

Professional &




10.2%

Other Services

4.0%

Government

16.0%

34.3%

1,080

Single-Family Housing Permits (Dec 2013) 12-month sum vs. a year ago

Production above trend for an extended period of time could cause

prices to moderate as inventory is built


20.2%

not comparable

12-month Sum of 1-unit Building Permits through Dec 2013 1,338

Corpus Christi

not comparable


Local Fundamentals



Construction is on the rise relative to last year, suggesting that the local

inventory has stabilized

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%



0200400600800

1,0001,2001,4001,6001,8002,000



Historical Average

U.S.1.41.4

2.72.5

More affordable than most markets20.3%10.0%

The price-to-income ratio has fallen and is below the historical average


8.2%

U.S.

Ratio for 2013 Q4

Ratio for 2013


7.9%

Ratio for 2013 Q4Ratio for 2013

15.1%Historically strong and an improvement

over the third quarter of 2013

Affordability

14.9%

2.6

Corpus Christi

Corpus Christi

0%

5%

10%

15%

20%

25%

30%

2013201120092007200520032001199919971995


0%

2%

4%

6%

8%

10%

12%

2013 Q42013 Q32013 Q22013 Q12012 Q42012 Q32012 Q22012 Q1


Mortgages rates eased through the end of September and early October following Ben Bernanke’s announcement in late September that the Federal Reserve would not taper its purchases of mortgage backed securities and US Treasuries. The downward trend reached a low of 4.10% for the average 30-year fixed rate mortgage, but was briefly interrupted by the debt ceiling debate which pushed up modestly on rates in mid-October. However, following a spate of positive economic news releases in November including stronger than expected retails sales and a surprise jump in new employment as well as positive revisions to the measure for employment gains in September and October, the chairman of the Federal Reserve board voted to begin the taper in December. As a result, mortgage rates rose steadily in December and ended the year at 4.48%. The Fed has since continued its taper despite softening economic and employment data. The taper is likely priced in but the weak economic news is holding back higher rates. A stronger economy, be it robust or modest in nature, is inevitable so rates will rise later this year. NAR is forecasting an average 30-year fixed rate of 5.0% for 2014.

The Mortgage Market

0

40

80

120

160

200

240

280

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

2013 Q4Q22012 Q4Q22011 Q4Q22010 Q4Q22009 Q4Q22008 Q4



0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2013201120092007200520032001199919971995





following counties:


q42013 template tempc c… · the recession $1,667 42% conforming loan limit** u.s. fha loan limit...

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