November 2015 Newsletter
This year’s annual conference in Charleston, South Carolina was fantastic! The topic was, “A Year of Change, Renewal and Re-Imagination”. Charleston was dealt a seemingly insurmountable economic blow when the Naval Shipyard’s impending closure was announced in 1993. The Shipyard employed 8,000 at its peak. Mayor Joe Riley used this ‘date with the hangman’ to successfully focus on the city’s uniqueness and authenticity. In the process he became revered for his service and unwavering commitment by the U.S. Conference of Mayors.
AARC’s Annual Conference Was a HIT!
Change, Renwal and Re-Imagination…
Charleston served us well as one of the best conference locations in years. The history, charm and warmth of this classic Southern city welcomed us with open arms providing the perfect backdrop, opportunities for exciting activities and tons of Southern Hospitality. Coupled with this unique setting, our conference speakers brought the same level of interest and enthusiasm. Our 2015 speakers offered unique insight on today’s ever changing marketplace and cutting edge trends and research. If you missed the conference you missed a tremendous opportunity to learn from those making gains in retiree recruitment and share best practices with your 
peers. Look for the upcoming announcement of our 2016 conference location!
We have posted all of the PowerPoint presentations and videos from the conference as well as numerous photos during the conference, awards and Welcome Reception. These PowerPoint presentations, photos and videos can be found online in our Member’s Only Section.
2015 Conference Resources, Members Only – Click Here
It is also important that we thank our Sponsors again, without these supporters the conference could not have been a success; Blue Ridge Printing, Center for Carolina Living, Circumference Design Group, Focus3, Hometown Mississippi Living, Mississippi Gulf Coast Retiree Partnership, RetireNC, Retire Tennessee and ideal-LIVING.
The AARC Board of Directors Report
The Board of Directors and Executive Board thank the membership for their participation in our 2016 Election of Officers. We would like to thank Marcia Crawford for her years of contributions, as she will be rotating off the board at the end of the year. We are excited to welcome the reelection of Frank Carmel (DC), Daniel Keir (NC) and Mike Notartomaso (SC) in addition we welcome Rosie Vassallo (MS) as our newest member of the Board of Directors.
The 2016/2017 Executive Board will be led by Andre´ Nabors as Chairperson, Rachel Baker as Vice-Chairperson, Kristy Peters as Secretary and Daniel Keir as Treasurer. Your entire board is excited for 2016 and we thank you for your continued support.
We would also like to thank Jeff Fleming for his contributions as our 2014/2015 Chairperson. Jeff’s passion for economic development and leadership of the Board of the Directors of the American Association of Retirement Communities will be truly missed. He will continue to serve on the Board of Directors.
Home Prices Accelerate in September, Says S&P/Case-Shiller
Lauren Ginsler, FORBES – November 24, 2015
Home prices gained steam across the country in September, according to data released Tuesday by S&P/Case-Shiller, fueling concerns about affordability for buyers.
On a national basis, single-family home prices rose 4.9%, according to the S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions. This compares to a 4.6% increase in August.
An index measuring 20 cities shows that home prices rose an annual 5.5% in September, compared to 5.1% the month before. A separate index measuring 10 major cities shows that home prices gained 5%, up from 4.7% the month before.
The cities with the highest year-over-year gains were San Francisco (11.2%), Denver (10.9%) and Portland (10.1%).
Home prices have continued to rise at more than double the rate of inflation, causing some concern about whether it’s getting increasingly difficult for those looking to buy a home. Rising rents and soft wage growth add to the challenge, starting with saving for a down payment.
“Sellers may be singing the praises of the season, but buyers could be left grumbling ‘Bah Humbug’ because the market is acting more Grinch-like for renters and others looking to buy a home right now,” said Zillow chief economist Svenja Gudell.
Eyes are also on the Fed, which could raise interest rates at its December policy meeting and impact the cost of taking out a mortgage. A first rate hike isn’t likely to push the 30-year mortgage rate above 4%, though, says David Blitzer, chairman of the index committee at S&P Dow Jones Indices.
Seasonally adjusted, the national index rose 0.8% in September from the month before, while the 20-city index and 10-city index both rose 0.6% month-over-month.
Why the Housing Rebound Hasn’t Lifted the U.S. Economy Much
Joe White, The Wall Street Journal – November 24, 2015
American homeowners are finally digging out of the hole created by the housing crisis. But their housing 
wealth is playing a much smaller role in the overall economy than it did before the downturn.
Home equity has roughly doubled to $12.1 trillion since house prices hit bottom in 2011, according to the Federal Reserve. As a result, a key gauge of housing wealth—homeowners’ equity as a share of real-estate values—is nearing the point seen a decade ago, before the downturn.
Such a level once would have offered a double-barreled boost to the economy by providing owners with more money to tap and making them feel more flush and likely to spend. But today, that newfound wealth has had little effect on behavior. While the traditional ways Americans tap their home equity—home-equity loans, lines of credit and cash-out refinances—are higher than last year, they are still depressed.
In the first half of the year, owners borrowed $43.5 billion against their homes with home-equity loans and lines of credit, according to trade publication Inside Mortgage Finance. That was 45% higher than in the first half of 2014, but scarcely a quarter of the amount seen when equity was last as high in 2007.
Meanwhile, cash-out refinances, which let homeowners take out a new mortgage and tap some of the home’s value at the same time, were up 48% in the three months ended in August from the year-earlier period, according to Black Knight Financial Services. But they remain below the level seen in the summer of 2013. The average cash-out refinance in the three months ended in August left the borrower with mortgage debt of about 68% of the home’s value—not a risky level by any stretch.
Home equity’s effect on consumer spending is at its lowest ebb since the early 1990s, according to Moody’s Analytics. The research firm estimates that every $1 rise in home equity in the fourth quarter of 2014 would translate to about two cents of extra consumer spending over the next 1 to 1½ years. That was a third of the impact home equity had before the bust, Moody’s said.
The impact is more muted now despite the fact that home equity per homeowner has roughly doubled. At the end of the second quarter, the figure was about $156,700, up from $81,100 in the second quarter of 2011, according to Moody’s Analytics chief economist Mark Zandi. Though the homeownership rate has fallen, the total number of households has increased, meaning the number of households that own hasn’t changed much since the housing bubble burst in 2006, Mr. Zandi said.
Why aren’t homeowners feeling flush again? For one thing, since rising home prices over the past few years largely have made up for ground lost during the recession, many owners might not even realize they have equity to tap.
The percentage of homeowners who were underwater, or owing more on their mortgage than the home’s value, dropped to 8.7% by mid-2015 from 21% at the end of 2011, according to CoreLogic. Yet the percentage of homeowners who thought they were underwater fell by merely one percentage point to 27%, according to housing-finance company Fannie Mae.
The bust looms large and home equity is seen as more fleeting than it used to be, said Fannie Mae chief economist Doug Duncan.
“Consumers are definitely more conservative financially than they were 10 years ago. They’ve seen that house prices can be volatile,” Mr. Duncan said.
Mortgage lenders also aren’t giving owners access to as much equity as they used to. While it was common during the boom to see loans that took out 100% or even more of a home’s value, now few will let an owner take out more than 80%.
Finally, other kinds of loans are cheaper, removing one incentive to tap home equity.
Six years ago, for example, the average five-year new-car loan had an interest rate of 6.83%, versus 5.56% for a $30,000 home-equity credit line. But in the week ended Nov. 11, the average interest rate for a five-year new-car loan was 4.3%, according to Bankrate.com, versus 4.74% for the HELOC.
Home equity as a share of real-estate values at the end of the second quarter was 56%, according to the Federal Reserve, not quite back to the level of 60% seen in the boom. That means Americans’ mortgage debt is still elevated relative to home values, which could be another factor affecting the decision of whether or not to cash out equity.
Could home equity start to flex its muscle sometime soon?
Some economists think it might. One reason: In many metro areas, home prices have overtaken or are about to overtake their boom-era peak.
About 38% of metro areas had prices above their pre-2009 peak at the end of the third quarter, up from a 30% level last year, according to Moody’s Analytics and CoreLogic. A further 13% of metros are within 5% of their prebust peak.
That’s important, because it means new home equity is being created rather than merely making up for lost ground. It also means fewer homeowners are underwater, freeing them up for a home sale and potential move-up purchase while also making home improvements and renovations seem less like throwing good money after bad.
“We’re at an inflection point,” Mr. Zandi said. “Since the crash, it’s all been about repairing homeowners’ equity but now that house prices are returning to prerecession levels, we will see homeowners’ equity driving consumer spending, home improvements and economic activity.”