The purpose of this video is to provide an overview of the recent events and trends that have transpired in the residential housing environment, and to provide an overview of the home-price level for a select group of cities that make up the Adkins 60-City Home Price Index. This analysis is for the second quarter of 2015.

1. Adkins Capital Management
Overview of U.S. Residential Housing Market
Adkins 60-City Home Price Index
Second Quarter, 2015

2. CONTENTS
 The purpose of this presentation is to provide an overview and assessment of:
 The events and trends that have transpired in the residential housing market
for the second quarter of 2015; and
 The home price level for a select group of cities that make up the Adkins 60-
City Home Price Index.
 This presentation provides an overview and assessment of:
 Adkins Capital Management
 U.S. Housing Events
 U.S. Housing Trends
 ARĤVA Analytics Home Price-level Analytical Methodology
 Application of the ARĤVAAnalytical Methodology
 Top Five Overpriced Cities in the U.S.
 Top Five Underpriced Cities in the U.S.
 Conclusion
 Contact Information
1Adkins Capital Management, LLC.

3. Adkins Capital Management
 Privately owned and independently operated company.
 Exclusive focus on residential real estate.
 Company not affiliated with any parties associated with
the residential housing industry.
 Our mission is to bridge the gap in the residential
housing market, where deficiencies in public policy,
regulation, product structure, and personnel have
created an environment where prospective home buyers
need objective information and useful analytical tools to
make a prudent home purchase decision.
Adkins Capital Management, LLC. 2
 More than 15 years of real estate analysis experience, more than 10 years of
institutional investment consulting experience, and more than seven years of
freelance financial writing experience.
 Author of more than 20 published articles, including publications by Forbes,
Investor’s Business Daily, Yahoo, Investopedia, Financial Edge, and more than
230 news organizations worldwide.

4. Adkins Capital Management, LLC. 3
 Our Goal: Offer prospective home buyers a comprehensive, accurate, automated,
user-friendly and affordable residential real estate analysis software application,
while providing contemporary information about the trends and events that are
taking place in the residential housing market, in an economical, efficient, and
effective manner.
 Our Commitment: Make Adkins Capital Management, the ARĤVA Residential
Real Estate Analysis Software Application, and our residential real estate
research, the premier analytical source for prospective home buyers to use in order
to make a prudent home purchase decision.
Adkins Capital Management
 Our Product and Service: Developer of
an Internet-based residential real estate
analysis software application.
 Adkins Residential Home Valuation
Analyzer (ARĤVA).
 ARĤVA ANALYTICS - finance-
based and expense-based analytical
methodologies.

5. OVERVIEW OF U.S. HOUSING EVENTS FOR THE QUARTER
 For the second quarter of this year, the impact of foreclosures throughout the U.S. residential
housing market was the primary topic of discussion.
 According to a report produced by CoreLogic:
 A recovering economy and healthier housing market has pushed the number of
seriously delinquent mortgages (90 days ore more past due) to the lowest level
since May 2008.
 At approximately 41,000 completed foreclosures, the monthly total has
fallen by nearly two-thirds since peaking in September 2010.
 Completed foreclosures averaged just 21,000 per month nationwide
between 2000 and 2006.
 Florida had the most completed foreclosures (110,000) in the country over the
past year, followed by Michigan (50,000), Texas (34,000), Georgia (28,000), and
Ohio (28,000).
 Since September 2008, 5.6 million homes have been lost to foreclosure.
4Adkins Capital Management, LLC.

6. OVERVIEW OF U.S. HOUSING EVENTS FOR THE QUARTER
 A comprehensive Stateline analysis produced by the American Sociological Review titled
“Neighborhood Foreclosures, Racial/Ethnic Transitions, and Residential Segregation,” provided a
host of key foreclosure findings:
 The U.S. housing crisis of the late 2000s was one of the most profound residential disasters
of the past century.
 Between 2005 and 2012, there were 9.3 million unique foreclosures. Since 2008, roughly 1
out of 12 household have begun the foreclosure process.
 33 million moves occurred between 2009 and 2010, up from 30.5 million between
2007 and 2008. The dramatic increase in moves has been attributed to the increase in
foreclosures.
 According to a Federal Reserve study in 2011, among foreclosed movers, the vast
majority (90%) relocated within their current metropolitan area.
 The burden of the foreclosure crisis was not evenly distributed, with African Americans and
Latino Households much more likely to face foreclosure than Caucasians and Asians.
 The foreclosure crisis represents arguably the most substantial migration event of the past
several decades, exceeding the Great Migration (1910 – 1970) and the Dust Bowl exodus
(1930s).
5Adkins Capital Management, LLC.

7.  The foreclosure crisis that hit the U.S. in 2007 was precipitated by a pernicious combination of
unsustainable lending practices, irresponsible borrowing, and unrealistic expectations about the
appreciation of real estate.
 Federal policy played an important role in setting the stage for the foreclosure crisis, most notably
in the form of banking deregulation that facilitated the use of high-risk lending and underwriting
strategies, as well as federal efforts to preempt laws intended to protect consumers against
predatory lenders.
 Foreclosures will likely have a profound impact on neighborhood distress and instability, leading to
a density of vacant, neglected, and abandoned properties, heightening the appearance of
neighborhood deterioration, driving up crime, and increasing the likelihood of racial transition.
6Adkins Capital Management, LLC.
OVERVIEW OF U.S. HOUSING EVENTS FOR THE QUARTER

8. ASSESSMENT OF U.S. HOUSING TRENDS FOR THE QUARTER
 According to Bankrate.com, the national average mortgage loan interest rate for a 30-year fully-
amortized fixed-rate loan began the quarter at 3.88% and ended the quarter at 4.19%. Since June of
2011, the national average mortgage loan interest rate for a 30-year fixed-rate loan has been less than
4.61%.
 Most financial pundits expected the national average mortgage loan interest rate for a 30-year
fixed-rate loan to increase slightly over the quarter.
 Recent comments made by the chairman of the Federal Reserve has led most financial pundits to
believe that an increase in the key Federal Funds rate will take place by the end of this year.
This in turn will likely cause upward pressure on mortgage loan interest rates in the future.
 The future level of mortgage loan interest rates will also likely be dependent upon the operating
status of the Government Sponsored Enterprises, and their future role in the housing market.
 Prospective home buyers should closely follow the level of mortgage loan interest rates in
their community.
 A mortgage loan interest rate of approximately 5.3% will require home owners to repay to
the lender twice the amount of their mortgage loan if they make their scheduled
repayments and carry their loan to maturity.
 This fact illustrates the high cost of interest expense for borrowers over time, and
illustrates why the Federal Reserve’s interest rate policy may have a very negative
impact on the price-level of residential housing in the future.
7Adkins Capital Management, LLC.

9. ADKINS RESIDENTIAL HOME VALUATION ANALYZER
HOME PRICE-LEVEL ANALYTICAL METHODOLOGY
ARĤVA ANALYTICS
 JUSTIFIED MORTGAGE LOAN INTEREST RATE
 Represents the cost of debt for a 30-year fully-amortized fixed-rate mortgage loan that
equates the median home price level for a city with the median household income
level for the city.
 Based on the assumption that 28% of household income is the largest amount of
money that should be spent in order to repay the principal and interest costs for a 30-
year fully-amortized fixed-rate mortgage loan.
8
 JUSTIFIED PERCENTAGE OF HOUSEHOLD INCOME
 Represents the percentage of pre-tax household income that would have to be spent by
the people that live in a city in order to justify the relationship between the median
household income level for the city and the median home price level for the city.
 Based on the month-ending national average mortgage loan interest rate for a 30-year
fully-amortized fixed-rate mortgage loan.
Adkins Capital Management, LLC.

10. APPLICATION OF THE ARĤVA ANALYTICAL METHODOLOGY
 According to the U.S. Census Bureau, median household income was $52,250 in 2013 and $30,056 in 1989.
In comparison, the median new home price was $265,092 in 2013 and $120,383 in 1989.
 At first observation of the chart above, it appears that there is a significant problem in the housing market, as
the new home price level has inflated at a much higher rate than household income (120% v 74%).
 However, the dramatic difference in the national average mortgage loan interest rate for a 30-year fixed-rate
mortgage loan in 2013 (3.98%) versus 1989 (10.32%) raises some key points to consider:
 In 2013, 29% of household income would have to be spent in order to justify the median home price
level, or the national average mortgage loan interest rate would have to be 3.7%. The spread between
29% and 28% and 3.98% and 3.7% represents the degree of overpricing of new homes.
 In 1989, 44% of household income would have to be spent in order to justify the median home price
level, or the national average mortgage loan interest rate would have to be 5.75%. The spread
between 44% and 28% and 10.32% and 5.75% represents the degree of overpricing of new homes.
 Therefore, in 1989 (2013), based on the justified percentage of household income amount, and the justified
mortgage loan interest rate amount, the median home price level for new homes was significantly (only
slightly) overpriced nationwide.
9
$0
$200,000
$400,000
Median Household Income Median Home Price
2013
1989
Adkins Capital Management, LLC.

11. ARĤVA ANALYTICS - TOP FIVE OVERPRICED CITIES IN THE U.S.
 26 cities that make up the Adkins 60-City Home Price Index were classified as overpriced.
 It is not possible to justify the home price level for the top five overpriced cities by reducing the mortgage loan interest rate
from 4.19% to 0.0%.
 In order to classify the homes in the top five overpriced cities as underpriced, it would need to be deemed prudent by
prospective home buyers to spend more than the justified percentage of household income in order to repay the costs of a
mortgage loan.
 In order to justify the median home price level for each city, the median required household income level would need to
increase to the respective range of $88,295 and $156,010.
 Based on the median household income level, the quarter ending national average mortgage loan interest rate, and the
assumption that no more than 28% of pre-tax household income should be spent in order to repay the principal and interest
costs of a mortgage loan, the justified home price level for the top five overpriced cities fell within the respective range of
$168,810 and $333,498.
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Adkins 60-City
Home Price
Index
Median
Household
Income Level
Median
Home Price
Level
Justified
Mortgage
Loan
Interest
Rate
Justified
Percentage
of Household
Income
Required
Median
Household
Income
Level
Justified
Home Price
Level
Bridgeport, CT $35,379 $421,300 None 70% $88,295 $168,810
Honolulu $57,479 $677,600 None 70% $142,010 $274,260
New York City $49,461 $549,000 None 66% $115,059 $236,002
San Francisco $69,894 $744,400 None 63% $156,010 $333,498
Los Angeles $46,148 $481,900 None 62% $100,996 $220,194
Adkins Capital Management, LLC.

12. ARĤVA ANALYTICS - TOP FIVE UNDERPRICED CITIES IN THE U.S.
 34 cities that make up the Adkins 60-City Home Price Index were classified as underpriced.
 In order to classify homes in the top five underpriced cities as overpriced:
 The national average mortgage loan interest rate would have to increase from 4.19% to more
than the justified mortgage loan interest rate for each city; or
 It would have to be deemed imprudent by prospective home buyers to spend as much as the
justified percentage of household income in order to repay the costs of a mortgage loan.
11
Adkins 60-City
Home Price
Index
Median
Household
Income Level
Median Home
Price Level
Justified
Mortgage Loan
Interest Rate
Justified
Percentage of
Household
Income
Detroit, MI $25,193 $31,450 19.7% 8%
Wichita, KS $44,184 $128,900 8.95% 18%
Sioux Falls, SD $50,470 $162,400 7.9% 19%
Little Rock, AR $40,976 $135,600 7.6% 20%
Wilmington, DE $38,325 $130,200 7.3% 20%
Adkins Capital Management, LLC.

13. CONCLUSION
Given the events that have transpired in the residential housing market this century, and taking
into account the fact that buying a home will likely be the largest single financial transaction that
prospective home buyers will ever make, and the bulk of their net worth will likely be tied up in
their home, prospective home buyers should subscribe to use the ARĤVA Residential Real
Estate Analysis Software Application in order to accurately assess:
 the level of underpricing or overpricing of homes in their community;
 the largest amount of money they should spend in order to purchase a home;
 the amount of money they would need to earn on an annual basis in order to be able to
afford to purchase a specific home;
 total home ownership costs expressed as a percentage of household income; and
 how much a home would need to appreciate in value each year in order to offset the
costs associated with owning the home.
By analyzing residential real estate from these perspectives, prospective home buyers should be
able to make a prudent home purchase decision.
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14. residentialrealestateanalysis.com
 REVIEW THE ADKINS 60-CITY HOME PRICE INDEX
 ACCESS THE ADKINS RESIDENTIAL REAL ESTATE
ANALYSIS SOFTWARE APPLICATION
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CONTACT INFORMATION

15. HAPPY
INDEPENDENCE DAY!
Adkins Capital Management
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