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FEATURE ANALYTICS Location, Location, Location "RESILIENT WALKABLES." According to data from the institute, an estimated 15 percent of the nation's population lives in this type of area, which is characterized by "populous ur- ban or semi-urban communities well-served by local amenities." Regions considered part of the "resilient walkables" experi- enced less severe losses in home pricing and enjoyed an above- average employment complexion throughout the housing crisis. • Recovery Pace: Among the first to recover; prices will increase by 3 percent as of 2013, with an uptick in pricing of 5 per- cent between 2014 and 2017. • Rental Demand Leads the Way Examples: Boston; Philadelphia; Washington, D.C.; Denver "SLOW AND STEADY." Thirty- five percent of U.S. residents find themselves in this regional segmentation. Home pricing in "slow and steady" areas dropped by double digits but remained above the national average, and the current climate in these mar- kets is characterized by relatively affordable housing and a low proportion of foreclosure inven- tory. Additionally, the Demand Institute notes that these sectors usually exist in states without a "particularly restrictive" foreclo- sure process. • • 3 percent no later than 2014, and similar increases in home prices will be recorded during the following three years. Exhibit 5 Home Starts Not Linked with Current Economic Recovery Examples: Gaithersburg, Maryland; Charlotte, North Carolina; Dallas and Fort Worth, Texas "DAMAGED BUT HOPEFUL." Recovery Pace: Will improve more quickly than the national average; pricing will rise by Annual Housing Starts 1.8 million 1.5 1.2 0.9 0.6 0.3 '60 66 | THE M REPORT Multi- Family '65 '70 '75 '80 Source: U.S. Census Residential Construction Survey, 1960–2011; National Bureau of Economic Research '85 '90 '95 '00 '05 0.43 0.18 Single Family Recessions Stating that 30 percent of the country's population resides in areas tagged as "damaged but hopeful," the Demand Institute blames high levels of foreclo- sure inventory as the chief issue in these regions. Prices in this segment dropped on par with the national average during the crisis, and these areas are subject to more restrictive foreclosure processes, as well as mid to high unemployment rates. Annual Housing Starts 1.7 • • Recovery Pace: Will initially recover more slowly than the national average; home price ad- vancements will lag 12 months behind the rest of the country, achieving a 3 percent gain by 2016. However, due to general walkability in these regions, recovery from 2017 forward will outpace the national average. Examples: Chicago; San Diego; Stamford, Connecticut "WEIGHED DOWN." Roughly 20 percent of the U.S. is included in the distressed areas that comprise the Demand Institute's "weighed down" segmentation. Having ex- perienced failing home prices well above the national average, accru- ing large proportions of foreclosure inventory, and higher than average levels of unemployment, these '10 SECONDARY MARKET ANALYTICS SERVICING ORIGINATION