ARE YOU READY FOR 2013?

The London Group Realty AdvisorsConsultants to the Development, Legal, Investment and Estate Planning Industries

(619 417-1817 alan@londongroup.com

Alan Nevin

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450

950

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1950

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AZ

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TX

CA

VA

NM

CO

MD

NC

AV

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AG

E

NY

MA

SC

NJ

TN

MN

CT

AL

WI

KY

MO

AR IL NE

KS

PA IN OK IA

MS

WV

OH MI

LA

ECONOMIC STRENGTHHIGHER INDICATOR VALUE = STRONGER ECONOMIC STRENGTH FACTORS

Cyclical Downturn Systemic Downturn

Economic Strength Ratings by StateTHE FUTURE OF AMERICA

Top Ten % change Bottom Ten % change

Arizona 20.9% Illinois -2.2%Nevada 14.2% Connecticut -0.5%California 11.1% New Jersey -0.5%Utah 10.1% Pennsylvania -0.1%Florida 7.9% Wisconsin -0.1%South Carolina 7.8% Iowa -0.6%Colorado 7.7% Kentucky 1.3%New York 6.9% Oklahoma 1.5%District of Columbia 6.6% Arkansas 1.6%Oregon 6.4% Missouri 1.6%

Average 10.0% Average 0.2%

source: CoreLogic

Median Home Sales Price Change by State (1)Top 10 Highest and Lowest

2011-2012

(1) states with more than 2.0 million population and median home prices over $100,000

Top 15 States Bottom 15 States0%

10%

20%

30%

40%

50%

60%

70%

80%

76%

47 million

3%

Population Change – U.S. – 1980-2010 – 62 Million People

Demography is our Destiny

United States This past year, 1.15 million households were formed in

the United States. 6.5 million persons doubled up.

San Diego County: 2/3s of all households had no one living at home under

age 18 25% of all households were occupied by one person Only 1 in 7 households has a mom, dad and two kids.

NEVIN ECONOMICS 101:

Basic Jobs, by Number

Military (in uniform) 110,000 Tourism 150,000 Manufacturing 90,000 Import/Export 25,000 High Tech 94,000

Universities 35,000 Federal and State 60,000

Government (civilian)

Total 564,000

Rank Metropolitan AreaPercent Change

1 San Francisco 3.5%2 Houston 3.2%3 Denver 3.0%

4 San Diego 2.9%4 Phoenix 2.9%4 Seattle 2.9%7 Cincinnati 2.8%8 Riverside 2.3%9 Portland 2.2%9 Boston 2.2%

United States 1.4%

Source: Bureau of Labor StatisticsLondon Group Realty Advisors 9.2012

Large Metropolitan Area Job GrowthPercent Change in No. of Jobs

July 2011 - July 2012

3470034943

3518635431

3567435916

3616136404

3664736892

3713537377

3762237865

3810838353

3859638838

3908339326

3956939814

4005740299

4054440787

410300

500

1,000

1,500

2,000

2,500

San Diego CountyMonthly Building Permits Issued

1995 - July 2012

Multi-Family

Single-Family

Source: Real Estate Center at Texas A&M University

Notices of Default Down 50% since last year

(879 out of an inventory of 730,000 homes)

SAN DIEGO COUNTY FORECLOSURESForeclosures by Loan Origination Date

Q1 '04

Q2 '04

Q3 '04

Q4 '04

Q1 '05

Q2 '05

Q3 '05

Q4 '05

Q1 '06

Q2 '06

Q3 '06

Q4 '06

Q1 '07

Q2 '07

Q3 '07

Q4 '07

Q1 '08

Q2 '08

Q3 '08

Q4 '08

0

20

40

60

80

100

120

140

160

180

200Notice of DefaultNotice of Sale

The pig is almost through the snakeSource: The London Group Realty Advisors, Foreclosureradar.com

Investor Owned Homes – San Diego County

% owned by Investors

Single Family Detached 21% Condominiums 43%

Source: County Assessor

A definite shortage of inventory

Months

Normal 6.0

Non-Distressed 2.0Short Sales 0.4Bank REO 0.6

Months of InventoryResale Housing Market

San Diego CountyAs of Year End 2012

Source: The London Group Realty Advisors, San Diego Association of Realtors

Year 2006 2013

Square Feet 3,000 4,000 Price 900,000$ 900,000$

Down Payment 20% 20%Mortgage 720,000$ 720,000$

Interest Rate (30-yr. fixed) 6.5% 3.5%Monthly Payment 4,550$ 3,233$

Wonderful Homebuying Opportunities in 2013Get 1/3 more house with 1/3 less monthly payments

Category San Diego Ranking

Buy RecommendationsApartments 6

Office 8Retail 6Hotel 6

Industrial 10

For-Sale Homebuilding Prospects 13

2013 Emerging Trends in Real Estate: Economic RankingsUrban Land Institute

Source: Urban Land Institute

Nevin’s 2013 Economic Forecast

“ I can calculate the movement of stars but not the madness of man.

Isaac Newton

San Diego County- 2013 Economic Forecast

• Population growth will continue at 25,000+• New jobs will total more than 20,000 • New home sales will improve slightly: 2,500-3,000

units (1/3rd of normal)• Few new lots will be manufactured• The resale housing market will at least match 2012 with

more than 35,000 homes and condominiums sold• Foreclosures and short sales will diminish substantially• Interest rates will remain low• Home prices will increase 8-10%, same as in 2012

www.londongroup.com

The London Group Realty Advisors

Alan N. Nevin(619) 417-1817

alan@londongroup.com

We help people make prudent decisions on real estate matters, big and small.