2017 Q2-Residential housing market review

Adkins Capital Management
“Helping Prospective Home Buyers Make A Prudent Home Purchase Decision”
U.S. Residential Housing Market Review
Adkins 60-City Home Price Index Analysis
Second Quarter, 2017

PRESENTATION CONTENTS
 The purpose of this presentation is for Adkins Capital Management (ACM) to provide an overview
and assessment of:
 The events and trends that have transpired in the U.S. residential housing market for the
second quarter of 2017:
 “Addressing the Housing Finance Conundrum” Report by BlackRock Investment
Management Company;
 “The Sate of the Nation’s Housing” Report by The Joint Center for Housing Studies of
Harvard University; and
 Actions and implications of the Monetary Policy set forth by the Federal Reserve.
 The home price level for a select group of cities that make up the Adkins 60-City Home Price
Index.
 Top Five Overpriced Cities in the U.S.
 Top Five Underpriced Cities in the U.S.
 Conclusion
 Resources for Prospective Home Buyers
 Important Disclosures
1Adkins Capital Management LLC. 2017 Q2 - Residential Real Estate Analysis

 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 education,
public policy, regulation, product structure, and
personnel have created an environment where
prospective home buyers need objective information
and useful analytical tools in order 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 eight years of
freelance financial writing experience.
 Author of more than 25 published articles, including publications by Forbes,
Investor’s Business Daily, Yahoo, Investopedia, Financial Edge, and more than
230 news organizations worldwide.
2017 Q2 - Residential Real Estate Analysis
OVERVIEW OF ACM FOUNDER AND CORPORATION

 For the second quarter of 2017, a comprehensive research ViewPoint by BlackRock Investment
Management Company titled “Addressing the Housing Finance Conundrum” was the primary topic of
discussion.
 The BlackRock ViewPoint was written with the best interests of investors in mind. In contrast, the
recommendations set forth in this presentation by Adkins Capital Management are written with the best
interests of prospective home buyers in mind.
 From the standpoint of Adkins Capital Management (ACM), the primary benefits of the BlackRock
ViewPoint are threefold, as it provides:
 a helpful overview of the state of the nation’s housing;
 an excellent overview of the six policy proposals that have been set forth for the ongoing operation
of the government sponsored enterprises (i.e., Fannie Mae and Freddie Mac); and
 valuable housing policy insight from the perspective of one of the largest fixed income investment
managers in the world.
OVERVIW OF THE BLACKROCK VIEWPOINT REPORT
 The ViewPoint of the BlackRock report is that the U.S. needs a comprehensive approach to its housing
finance policy. According to the Blackrock ViewPoint, there is a need for a clearly defined governmental
role, transparency at all levels, and a framework to attract private capital.
 According to the BlackRock ViewPoint, housing prices in most markets have largely recovered from the
historic lows associated with the housing crisis.
 As outlined in the BlackRock ViewPoint , many constituencies are pushing for a timely change in the
structure and operation of the Government Sponsored Enterprises (GSEs).
OVERVIEW OF THE BLACKROCK VIEWPOINT

OVERVIEW OF THE TRULIA RESEARCH
 In contrast to the BlackRock ViewPoint, a recent report by Trulia found that when comparing the nominal
value of each home in the U.S. as of March 1, 2017 to the nominal peak value of that home prior to the
onset of the Great Recession (Dec. 1, 2007), just 34.2% of homes nationally have seen their value surpass
their pre-recession peak.
 We won’t see 100% of homes reach their pre-recession peak home price level until approximately
September 2025;
 Most ZIP codes in the “flyover states” have seen at least half of their homes recover to their pre-
recession peak;
 Outside of the major metros, the interior of the country has a higher share of recovered homes than
coastal ones.
 Given the Trulia research, Adkins Capital Management has reached the following analytical conclusions:
 An evolution in U.S. housing policy needs to move at a slow and steady pace until an accurate
assessment of the state of the nation’s housing can be determined.
 Given the uncertainty in U.S. housing policy, prospective home buyers need to study the long term
implications of owning a home, and take into account that the financial implications of owning a
home may be detrimental to many if not most peoples’ long-term net worth.
 In essence, the financial benefit of owning a home may only be experienced by home owners that
have a long-term time horizon. This finding has been confirmed many times by using the Adkins
Residential Home Valuation Analyzer.
OVERVIEW OF THE TRULIA RESEARCH

OVERVIEW OF THE ZILLOW ZESTIMATE
 According to numerous people in the residential housing industry, identified problems in the accuracy of
the highly popular Zillow “Zestimate” raises a host of issues that need to be addressed by prospective
home buyers and existing home owners in terms of evaluating the price-level of homes in their
community.
 A Zillow competition marketed as “Zillow® Prize” has been launched in order to find a person or a team
who can most improve the Zestimate® algorithm, which is Zillow's proprietary home valuation tool, and
is used to generate automated home valuations for 110 million homes across the U.S.
 The winner of the “Zillow® Prize” competition will be awarded $1 million dollars.
 Given the findings associated with the Zillow “Zestimate,” Adkins Capital Management has reached the
following analytical conclusions:
 Automated valuation processes (i.e., Zestimate) offered by digital companies will never generate
an accurate home valuation analysis for prospective home buyers to use in order to make a prudent
home purchase decision, because they do not take into account all of the analytical factors that are
required to make a prudent home purchase decision.
 Automated valuation processes can be useful in terms of helping the seller set the initial offering
price for a home that is to be sold on the market.
 In light of the problems with the Zillow “Zestimate” prospective home buyers will need to use an
independent residential real estate analysis software application, such as the Adkins Residential Home
Valuation Analyzer, in order to help make a prudent home purchase decision.
OVERVIEW OF THE ZILLOW “ZESTIMATE”

 Based on the housing information provided in the BlackRock ViewPoint , the conflicting housing recovery
data associated with the BlackRock ViewPoint versus the Trulia research, and the identified problem with the
Zestimate, Adkins Capital Management recommends that prospective home buyers take into account the
following points-of-view when they evaluate their home purchase opportunities:
 An analytical distinction needs to be made between the price and the value of a home.
 The philosophy that price does not equal value needs to be understood and embraced. An
understanding of this principle is required in order to have the ability to make a prudent home
purchase decision.
 Individual decisions based on an understanding between price and value will help maintain a
stable housing environment for society as a whole.
 Traditional valuation approaches that use market comparables are only useful for helping a seller
set the initial offering price-level for a home that he or she is trying to sell.
 Digital companies using automated analytical systems to amalgamate information provide limited
value in making a prudent home purchase decision, because such valuation processes do not
utilize the specific prospective home buyer information that is required in order to conduct an
accurate residential real estate analysis.
 There are no short cuts to conducting a comprehensive residential real estate analysis. Companies
that provide quick and easy valuation solutions offer virtually no value for making a prudent
home purchase decision.
 Prospective home buyers need to use the proprietary finance-based analytical methodology in
conjunction with the proprietary expense-based analytical methodology developed by Adkins
Capital Management in order to be able to make a prudent home purchase decision.
ADKINS CAPITAL MANAGEMENT ANALYTICAL CONCLUSIONS

 The BlackRock report provides a great overview of both the Government Sponsored Enterprise’s (GSE)
role and the Federal Reserve’s (Fed) role in the U.S. housing market.
 According to the BlackRock ViewPoint, Fannie Mae and Freddie Mac have paid more than $68 billion
dollars of their cumulative draw following their placement into conservatorship and are currently
generating positive pre-tax income each quarter.
 According to research conducted by Adkins Capital Management, in 2016, Fannie Mae and Freddie Mac
purchased approximately $941 billion dollars of single-family mortgages. The total loan market value
of single family mortgages is $2 trillion dollars. In addition, the mortgage-backed securities issued by
Fannie and Freddie accounted for 65 percent of all mortgage securities backed by single-family loans.
 As of January 2009, the Federal Reserve held $1.8 trillion dollars on it balance sheet as result of its
quantitative easing policies (i.e. QE1, QE2, and QE3).
 The following charts illustrate the exorbitant role that the U.S. government plays in the U.S. residential
housing market.
7Adkins Capital Management LLC.
GSE AND FED INFLUENCE ON THE U.S. HOUSING MARKET

 Based on the information in the BlackRock ViewPoint, Adkins Capital Management has reached the following
policy conclusions:
 The role of the U.S. government’s housing policy via the GSEs and the Federal Reserve are too
extensive to be funded by the private capital market in a material way.
 It is clear that future U.S. housing policy pertaining to the GSEs will have to be designed according to
the way things are, rather than to the way things should be. Given the fact that the GSEs will be running
on zero capital by the first part of 2017, it is highly likely that housing policy will be high on President
Trump’s administrative policy agenda in the near future.
 The Federal Reserve will have to unwind its MBS holdings on its balance sheet over a long period of
time in order for private capital to take a leading role in U.S. housing policy administration.
 The Fed’s policy to unwind its exposure to MBS holdings will have to take place in concert with its
tightening monetary policy (i.e., upward trend in the federal funds rate). With this in mind, mortgage
loan interests are trending down, which is counterintuitive to the historical relationship between the
federal funds rate and mortgage loan interest rates. A better understanding of this financial anomaly will
need to be evaluated in order to understand this phenomenon and its impact on future housing policy.
 Adkins Capital Management has published a wealth of analytical information about the role of the GSEs and
the Federal Reserve’s role in the U.S. housing market in its quarterly residential housing reviews. For more
information, please watch the following movie presentations:
 Q2 2014 Home Price Index report: https://www.youtube.com/watch?v=c8N02sGXgEU
 Q4 2014 Home Price Index report: https://www.youtube.com/watch?v=Z2FjhUtlXjI
 Q2 2016 Home Price Index report: https://www.youtube.com/watch?v=bK8h9MDGeQE&t=1s
 Q4 2016 Home Price Index report: https://www.youtube.com/watch?v=KMNCxJtiDeU&t=2s

 The BlackRock report outlines the six policy recommendations for the future operation of the Government
Sponsored Enterprises (GSEs) known as Fannie Mae and Freddie Mac, and it provides a clear and concise
summary of their opinion for each of the proposed policies. Adkins Capital Management (ACM) has
provided its analytical assessment of each of the six policy proposals independent of the recommendations set
forth in the BlackRock ViewPoint.
 PATH Act
 Policy: Would eliminate Fannie Mae and Freddie Mac over a five-year period, accelerate the reduction
of their portfolio, and seek to attract private capital to the mortgage lending industry.
 ACM: Policy is based on the way the housing industry should operate (i.e, private capital market) but is
not a feasible solution due to the fact that it is virtually impossible to unwind the exorbitant role that the
U.S. government currently plays in the housing market without having a dramatic impact on society.
 Policy would dramatically change the concept of the “American Dream” by significantly
reducing the amount of mortgage lending capital available to prospective home buyers. This in
turn would reduce the number of home owners nationwide.
 Policy would increase the cost of mortgage lending capital, as interest rates on mortgage loans
would have to increase dramatically in order to attract private capital to the mortgage lending
industry to a level that meets current demand as defined by annual home buyers.
 Policy would curtail the demand for home purchases which would push home prices down.
 Policy would cause the housing industry to decrease dramatically (e.g. homebuilders).
 Policy would shift U.S. housing policy from home owners to renters.
 Policy would likely be contested by parties that earn a living from the housing industry (e.g.,
home builders, real estate agents, accountants, attorneys).
HOUSING FINANCE POLICY PROPOSALS

 Johnson-Crapo Bill
 Policy: Would eliminate Fannie Mae and Freddie Mac, establish the Federal Mortgage Insurance
corporation, and provide an explicit full-faith-and-credit guarantee on covered MBSs, following a
10% first-loss credit support provision from private capital. The bill also calls for guarantors with a
regulator, and standardized polices, practices, and documentation for MBS utilizing a common
securitization platform.
 Bill is not supported by key democratic leadership including Senator Schumer and Senator Warren.
 ACM: A policy that is based on the establishment of a new governmental agency is not a solution to
the future operation for the state of the nation’s housing. Such legislation should not be endorsed.
 The U.S. government should not provide an explicit guarantee for GSE MBS.
 The establishment of a new governmental agency will simply promote more of the same bad
housing policies that will ultimately lead to another housing debacle.
 The U.S. housing industry does not need more regulation.
 A common securitization platform is a valid provision for the GSEs.
 Promising Road Proposal
 Policy: Would move GSEs into a single wholly owned government corporation known as the
National Mortgage Reinsurance Corporation. The proposal would provide an explicit government
guarantee and calls for laying off a portion of the credit risk to taxpayers in the capital markets.
 ACM: A policy review of the Promising Road proposal led to the same conclusion as reached for the
Johnson-Crapo Bill.
 Private capital should be used to fund the housing industry.
 Credit risk should be covered by private capital investors instead of tax payers.
HOUSING FINANCE POLICY PROPOSALS CONTINUED

 MBA Proposal
 Policy: Convert GSEs into privately owned regulated utilities with regulated rates of return that
issue MBS with explicit guarantees.
 ACM: Government regulation is ineffective because regulators typically come from the industry
that they are supposed to regulate and have the same warped viewpoints that necessitate regulation,
they tend to form biased relationships with those that they are supposed to regulate, and they tend
to adopt the views of those they regulate over time. This in turn makes the regulation of the
financial services industry uneconomical, inefficient, and ineffective.
 E.g., how effective was U.S. regulation in thwarting off the recent housing debacle, the
Madoff Ponzi Scheme, or the Savings and Loan crisis.
 The U.S. government should not provide an explicit guarantee of GSE MBS.
 Milken Institute Proposal
 Policy: Would convert the GSEs into cooperatively owned front-end credit enhancers. Proposal
would guarantee MBS. Proposal promotes the use of the Ginnie Mae operational model.
 ACM: More information about cooperatively owned front-end credit enhancers needs to be
disclosed. Typically, when policy solutions utilize unclear terminology or complex ideas that are
not clear and concise and easy to understand in terms of purpose, process and anticipated outcome,
they are not feasible long-term solutions.
 Elimination of an implicit or explicit governmental guarantee is recommended.
 Promotion of the Ginnie Mae model is acceptable.
 Policy will be evaluated in greater detail if it gains transaction with policy makers.

 Recap and Release Proposal
 Policy: Policy calls for a suspension of dividend payments to the Treasury, allowing the GSEs
to build sufficient capital to eventually be released from conservatorship. The future state of
GSEs would keep private shareholder-owned entities with an implicit government guarantee.
 ACM: Most realistic option given the size of the role that the U.S. government plays in the
U.S. housing market. Best solution given the state of the nation’s housing. Best solution given
the CURRENT concept of the “American Dream.”
 Elimination of the implicit government guarantee associated with GSE MBSs is
recommended.
 Suspension of dividend payments to the Treasury allowing GSEs to recapitalize is
appropriate.
 The Recap and Release policy should only be a temporary solution for U.S. housing
policy until an evolution to the PATH Act is achieved.

ADKINS CAPITAL MANAGEMENT HOUSING POLICY PROPOSAL
The following overview is a summary of the housing policy proposal that is supported by Adkins Capital
Management:
 ACM believes that an evolution needs to take place from one end of the policy spectrum to the other as a
transition takes place in housing policy from exorbitant government involvement to minimal government
involvement over time.
 ACM recommends the temporary adoption of the “Recap and Release” policy.
 ACM recommends a policy initiative that promotes a feasible evolution from the Recap and Release
policy to the policies outlined in the PATH Act.
 ACM recommends the elimination of the implicit government guarantee for GSE MBS and does not
recommend a policy that puts in place an explicit governmental guarantee.
 ACM recommends that investors ignore the ratings agencies, because they are paid by the companies
that they rate.
 ACM recommends the promotion of policies that require investors in GSE MBS to determine the risk of
investing in a GSE MBS before making a capital investment.
 (i.e., place the investment risk on GSE MBS investors in order to eliminate the need for an
implicit or explicit governmental guarantee).
 ACM recommends providing access via the GSE websites to all of the underlying mortgage loan
information that make up every loan in a GSE MBS so that investors have the ability to conduct a
thorough investment analysis.
 Mortgagor confidentiality issues will need to be addressed.
 ACM recommends GSE MBS be prohibited from including low credit quality mortgages (e.g. no doc
loans, stated income loans, minimal down payment loans, loans with teaser rates, or piggy back loans).
 ACM recommends that equity investors in the GSEs, prior to their placement in conservatorship, lose
100% of their equity investment. ACM recommends that equity investors in the GSEs following their
placement in conservatorship maintain their equity position at a non-diluted value.
 ACM recommends the use of guarantee fees to be held by the GSEs to increase their capital reserves.

OVERVIEW OF ANNUAL HARVARD UNIVERSITY HOUSING STUDY
 For the second quarter of 2017, the annual release (since 1988) of “The State of The Nation’s
Housing” report by the Joint Center for Housing Studies (JCHS) of Harvard University provided a
wealth of information pertaining to the residential housing environment.
 The general theme of the JCHS report is that the U.S. housing market has overcome the worst effects
of the housing bust.
 Nominal house prices have regained previous peaks;
 Construction volumes are nearing their long-term averages;
 Household growth is becoming more balanced between the owner and renter markets; and
 The need for additional housing supply should be an important stimulus for economic growth.
 According to researchers at the JCHS, “attending to the nation’s critical housing challenges should
have primacy in the debates over public spending, tax policy, and regulatory regimes.”
 Here is a summary of the key findings for 2016 that are most pertinent to prospective home buyers
and existing home owners:
 In 2016, U.S. home prices finally surpassed the high reached nearly a decade earlier.
 On an inflation adjusted basis, national home prices remained nearly 15 percent below their
previous high.
 More than 6 million homes were sold.
 The national homeownership rate dipped again for the 12th consecutive year to 63.4 percent.
 The median sales price for existing homes was $233,800 dollars.

OVERVIEW OF ANNUAL HARVARD UNIVERSITY HOUSING STUDY
The following information is a summary of more key findings from “The State of The Nation’s Housing”
report:
 The rebound in home prices differs sharply across neighborhoods by income.
 Markets along the East and West coasts have seen inflation-adjusted home values increase, while metros
in large swaths of the Midwest and South have experienced declines.
 In 2016, the number of homeowners underwater on their mortgage loans was 3.2 million.
 In 2011, 12.1 million homeowners were underwater on their mortgage loans.
 Foreclosure inventory was 585,000 properties.
 In 2016, Construction of single-family homes was 781,600.
 Construction levels have been below one million units every year since 2008.
 Until the housing crash, the below one million level was only posted five times since 1976.
 Single-family construction remains skewed towards larger, more expensive homes.
 Small single family homes (under 1,800 square feet) represented 21 percent of all completions.
 With a steady increase in demand, and the low rate of new construction, the gross vacancy rate is at its
lowest level since 2000.
 the lack of inventory is evident in both the new and existing housing stock.
 Homeownership declines are moderating while rental demand is strong.
 Affordability pressure is widespread.
 In the future, it is anticipated that minorities will drive most future household growth.
 Buyers will tend to be younger, have children, and be of Asian or Hispanic decent.

 Based on the housing information provided in “The State of The Nation’s Housing” report by the Joint Center for
Housing Studies (JCHS) of Harvard University, Adkins Capital Management recommends that prospective home
buyers take into account the following points-of-view when they evaluate their home purchase opportunities:
 Its easy to find conflicting information about the state of the nation’s housing today. While the
Harvard report paints a positive outlook for the home price recovery of homes across the U.S., a
recent Trulia report paints a much more negative picture.
 Given the length of time it has taken home prices to recover from the housing calamity, the millions of
people that have lost their homes to foreclosure, the millions of people that are still underwater on
their mortgage loan, and the number of people that are financially constrained by the costs associated
with owning a home, prospective home buyers should analyze home ownership very thoroughly.
 The Federal Housing Administration (FHA) continues to play a central role in serving first-time
homebuyers. Unfortunately, the reason why FHA loans are so popular is because the FHA program
only requires a 3.5 percent down payment amount. While FHA loans help spur the housing
environment and help people that work in the housing industry, such policies are very bad from the
financial perspective of prospective home buyers.
 The overall outlook of the information provided in the JCHS State of the Nation’s Housing report
clearly confirms that prospective home buyers need assistance with making a prudent home purchase
decision.
 Prospective home should realize that housing policy is created by our policy makers in order to help
spur the housing environment. Housing policy is not created with the best financial interests of
prospective home buyers in mind.
 Prospective home buyers need to use an independent and objective residential real estate analysis
software application, like the Adkins Residential Home Valuation Analyzer, in order to help them
make a prudent home purchase decision.

 For the second quarter of 2017, the national average mortgage loan interest rate for a 30-year
fully-amortized fixed-rate loan began the quarter at 4.19% and ended the quarter at 4.07%.
 Since June of 2011, the national average mortgage loan interest rate for a 30-year fixed-rate loan
has been less than 4.61%.
 In order to better assess the current mortgage loan interest rate environment, prospective home
buyers should remember that the national average mortgage loan interest rate for a 30-year fully-
amortized fixed rate loan reached an all-time low of 3.31% in November of 2012, and it reached
an all-time high of 18.63% in October of 1981.
 In view of realized and expected labor market conditions and inflation, the Federal Reserve
elected to raise the target Federal Funds Rate from (0.75% - 1.00%) to (1.00% - 1.25%)
during their Q2 2017 Federal Open Market Committee meeting.
 Prospective home buyers should closely follow the level of mortgage loan interest rates in their
community, because a rising cost of debt will increase the amount of interest expense that
prospective home buyers will need to pay for their mortgage loan. This in turn will place
downward pressure on the price-level of residential housing in their community.
 Prospective home buyers should use the Adkins Residential Home Valuation Analyzer in order to
assess the impact of a changing interest rate environment.
IMPLICATIONS OF THE FEDERAL RESERVE’S MONETARY POLICY

ADKINS RESIDENTIAL HOME VALUATION ANALYZER
HOME PRICE-LEVEL ANALYTICAL METHODOLOGY
 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.
18
 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. 2017 Q2 - Residential Real Estate Analysis
FINANCED-BASED ANALYSIS

TOP FIVE OVERPRICED CITIES IN THE U.S.
 16 cities that make up the Adkins 60-City Home Price Index were classified as overpriced for the quarter.
 It is not possible to justify the home price level for the top five overpriced cities by reducing the 30-year
fixed rate mortgage loan interest rate from 4.07% 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
amount.
 In order to justify the median home price level for each city, the median required household income level
would need to increase to a level within the respective range of $93,556 and $227,252.
 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 $271,993 and $408,853
19
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
San Francisco $84,160 $1,104,000 None 76% $227,252 $408,853
New York City $58,878 $586,400 None 58% $120,707 $286,032
San Diego $63,400 $540,500 None 50% $111,259 $308,000
Seattle $71,273 $592,200 None 48% $121,901 $346,248
Los Angeles $55,988 $454,500 None 47% $93,556 $271,993

TOP FIVE UNDERPRICED CITIES IN THE U.S.
 44 cities that make up the Adkins 60-City Home Price Index were classified as underpriced for the
quarter.
 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 4.07% to more
than the justified mortgage loan interest rate amount 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 amount in order to repay the costs of a mortgage loan.
20
Adkins 60-City
Home Price Index
Median
Household Income
Level
Median Home
Price Level
Justified
Mortgage Loan
Interest Rate
Justified
Percentage of
Household Income
Buffalo $66,100 $94,000 19.65% 9%
Detroit $25,980 $42,600 16.95% 10%
Milwaukee $53,164 $99,500 14.80% 11%
Memphis $36,817 $76,200 13.25% 12%
Huntington $44,520 $96,800 12.60% 13%

CONCLUSION
 Given the events that have transpired in the residential housing market, 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 Adkins Residential Home Valuation
Analyzer 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.

 ACCESS THE ADKINS RESIDENTIAL
HOME VALUATION ANALYZER
 REVIEW THE ADKINS 60-CITY HOME
PRICE INDEX
 ACCESS THE STRATEGIC RETIREMENT
PLAN SAVINGS CALCULATOR
RESOURCES FOR PROSPECTIVE HOME BUYERS
 WATCH OUR MOVIE CATALOG OF QUARTERLY RESIDENTIAL HOUSING
REVIEWS
 WATCH OUR COMPREHENSIVE HOUSING VALUATION METHDOLOGY
MOVIE PRESENTATIONS
 WATCH OUR STRATEGIC RETIREMENT PLAN SAVINGS METHODOLOGY
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Adkins Capital Management LLC. 23 2017 Q2 - Residential Real Estate Analysis
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2017 Q2-Residential housing market review

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