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2012 California Real Estate Market Forecast
Real Estate Education CenterApril 20, 2012
Oscar WeiSenior Research AnalystCalifornia Association of REALTORS®
Overview
US and California Economies
California Housing Market
Local Housing Market
Buyers and Sellers
Market Forecast
Market Opportunities
www.car.org/marketdata Speeches
Speeches & Presentations
US and California Economic Conditions
Gross Domestic Product
-8%-7%-6%
-5%-4%-3%
-2%-1%
0%1%2%
3%4%5%
6%7%
8%
19
70
19
72
19
74
19
76
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
----
Q2
-10
Q4
-10
Q2
-11
Q4
-11
2011: 1.7%; 2011 Q4: 3.0%
ANNUAL PERCENT CHANGE, CHAIN-TYPE (2005) $
ANNUAL QTRLY
2009 Largest Annual Drop since 1938 (-3.4%)
Unemployment: Heading Lower U.S. at 3 year low
California vs. United States
0%
2%
4%
6%
8%
10%
12%
14%
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CA US
SOURCE: CA Employment Development Division
-1,000,000
-800,000
-600,000
-400,000
-200,000
0
200,000
400,000
600,000
Ja
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Oc
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Oc
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1
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U.S. Non-farm Job Growth
SOURCE: US Dept of Labor, Bureau of Labor Statistics
Month-to-Month Changes
Recession Job Losses: 8.8 millionSince Jan’10: +3.4 million
-160000
-140000
-120000
-100000
-80000
-60000
-40000
-20000
0
20000
40000
60000
80000
100000
Ja
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Ma
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8
Ma
y-0
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Ju
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Se
p-0
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No
v-0
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Ja
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9
Ma
r-0
9
Ma
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9
Ju
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9
Se
p-0
9
No
v-0
9
Ja
n-1
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Ma
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Ma
y-1
0
Ju
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0
Se
p-1
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No
v-1
0
Ja
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1
Ma
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1
Ma
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1
Ju
l-1
1
Se
p-1
1
No
v-1
1
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2
California Non-farm Job Growth
SOURCE: CA Employment Development Division
Month-to-Month Changes
Recession Job Losses: 1.3 millionSince Jan’10: +308,200
Where are California’s Jobs? Employment Trends:
Construction & Financial Sectors Biggest Losers
SOURCE: California Association of REALTORS®
Industry 2005 Jul-11Year to
Date
Mining and Logging 23,600 27,600 4,000
Construction 905,300 567,300 -338,000
Manufacturing 1,502,600 1,257,600 -245,000
Trade, Transportation & Utilities 2,822,100 2,641,500 -180,600
Information 473,600 455,400 -18,200
Financial Activities 920,300 755,800 -164,500
Professional & Business Services 2,160,700 2,136,200 -24,500
Educational & Health Services 1,593,400 1,837,000 243,600
Leisure & Hospitality 1,475,200 1,531,600 56,400
Other Services 505,500 484,500 -21,000
Government 2,420,200 2,380,200 -40,000
TOTAL 14,802,500 14,074,700 -727,800
INDEX, 100=1985
Consumer Confidence IndexMarch 2012: 70.2
20
40
60
80
100
120
140
160
Ja
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Consumer Price IndexMarch 2012: All Items +2.6% YTY; Core +2.2% YTY
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
Ja
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0J
an
-81
Ja
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2J
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-83
Ja
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4J
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-85
Ja
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6J
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-87
Ja
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8J
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-89
Ja
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0J
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-91
Ja
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2J
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-93
Ja
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4J
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-95
Ja
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6J
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-97
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-99
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-01
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-03
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-05
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-07
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-09
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All Items
Core
PERCENT CHANGE FROM A YEAR AGO, 100=1982-1984
Performance Targets for National Economy
Current Target
2011
Unemployment 6% 9.0%
US GDP 3% or higher 1.8%
Nonfarm Job Growth
3%+ or 400K+/mo
1.0%
CPI 2.5% 3.2%
SOURCE: California Association of REALTORS®
U.S. Economic Outlook
2005 2006 2007 2008 2009 2010 2011 2012f
US GDP 3.1% 3.1% 1.9% -0.3% -3.5% 3.0% 1.7% 2.0%
Nonfarm Job Growth
1.7% 1.8% 1.1% -0.6% -4.4% -0.7% 1.2% 0.9%
Unemployment 5.1% 4.6% 4.6% 5.8% 9.3% 9.6% 9.0% 8.9%
CPI 3.4% 3.2% 2.8% 3.8% -0.4% 1.6% 3.2% 2.3%
Real Disposable Income, % Change
1.3% 4.0% 2.2% 0.5% 0.9% 1.8% 1.3% 1.5%
SOURCE: California Association of REALTORS®
Revised Date: March 2012
California Economic Outlook
2005 2006 2007 2008 2009 2010 2011 2012f
Nonfarm Job Growth
1.8% 1.7% 0.8% -1.3% -6.0% -1.1% 0.9% 2.1%
Unemployment Rate
5.4% 4.9% 5.4% 7.2% 11.3% 12.4% 11.7% 11.2%
Population Growth
0.7% 0.7% 0.8% 0.8% 0.6% 0.7% 0.7% 0.9%
Real Disposable Income, % Change
1.2% 4.4% 1.3% 1.0% -3.1% 1.8% 1.5% 2.0%
SOURCE: California Association of REALTORS®
Revised Date: March 2012
Economic Snapshot
Recession over, slow recovery expected
Engine of growth must come from consumers
Labor market: job growth remained slow
Inflation in check through 2012-12
Monetary policy: No rate hikes until 2013
Fiscal policy: politics = paralysis
California Housing Market
Sales of Existing Detached Homes and Pacific West Consumer ConfidenceCalifornia, March 2012 Sales: 505,360 Units, Down 0.9% YTD, Down 2.3% YTY
Jan-0
0
Jan-0
1
Jan-0
2
Jan-0
3
Jan-0
4
Jan-0
5
Jan-0
6
Jan-0
7
Jan-0
8
Jan-0
9
Jan-1
0
Jan-1
1
Jan-1
20
100,000
200,000
300,000
400,000
500,000
600,000
700,000
0
20
40
60
80
100
120
140
160
Sales Consumer ConfidenceUNITS INDEX
SOURCE: California Association of REALTORS®; The Conference Board
*Sales are seasonally adjusted and annualized
Median Price of Existing Detached HomesCalifornia, March 2012: $291,080, Up 1.6% YTY
Jan-0
0
Jan-0
1
Jan-0
2
Jan-0
3
Jan-0
4
Jan-0
5
Jan-0
6
Jan-0
7
Jan-0
8
Jan-0
9
Jan-1
0
Jan-1
1
Jan-1
2 $-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000 P: May-07$594,530
T: Feb-09$245,230-59% frompeak
SOURCE: California Association of REALTORS®
Unsold Inventory IndexCalifornia, March 2012: 4.1 Months
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Jan-8
8
Jan-8
9
Jan-9
0
Jan-9
1
Jan-9
2
Jan-9
3
Jan-9
4
Jan-9
5
Jan-9
6
Jan-9
7
Jan-9
8
Jan-9
9
Jan-0
0
Jan-0
1
Jan-0
2
Jan-0
3
Jan-0
4
Jan-0
5
Jan-0
6
Jan-0
7
Jan-0
8
Jan-0
9
Jan-1
0
Jan-1
1
Jan-1
20
2
4
6
8
10
12
14
16
18
20
MONTHS
Note: “Unsold Inventory Index” represents the number of months it would take to sell the remaining inventory for the month in question. The remaining inventory for the month is defined as the number of properties that were “Active”, “Pending”, and “Contingent” (when
available) and divide the sum by the number of “Sold” properties for the month in question.
Price Range (Thousand) Mar-11 Feb-12 Mar-12
$1,000K+ 9.0 12.1 7.7$750-1000K 6.4 7.6 5.5$500-750K 5.6 6.1 4.4$300-500K 5.3 5.2 3.9$0-300K 5.0 4.6 3.6
Higher Price = Higher Inventory Unsold Inventory Index
(Months of Supply)
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Note: “Unsold Inventory Index” represents the number of months it would take to sell the remaining inventory for the month in question. The remaining inventory for the month is defined as the number of properties that were “Active”, “Pending”, and “Contingent” (when
available) and divide the sum by the number of “Sold” properties for the month in question.
Unsold Inventory By Price RangeJanuary 2005 – March 2012
Jan-0
5
Jul-0
5
Jan-0
6
Jul-0
6
Jan-0
7
Jul-0
7
Jan-0
8
Jul-0
8
Jan-0
9
Jul-0
9
Jan-1
0
Jul-1
0
Jan-1
1
Jul-1
1
Jan-1
20
5
10
15
20
25
30
$0 - 300K
$300-500K
$500-750K
$750-1000K
$1,000K+-
MONTHS
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Note: “Unsold Inventory Index” represents the number of months it would take to sell the remaining inventory for the month in question. The remaining inventory for the month is defined as the number of properties that were “Active”, “Pending”, and “Contingent” (when
available) and divide the sum by the number of “Sold” properties for the month in question.
REOs; 25.2%
Short Sales; 23.0%
Other Distressed Sales (Not Specified); 0.7%
Equity Sales; 51.1%
Feb-12
Share of Distressed Sales to Total Sales
SOURCE: California Association of REALTORS®
SOURCE: California Association of REALTORS®
Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-120%
10%
20%
30%
40%
50%
60%
51.1%
23.0%
25.2%
Equity Sales Short Sale REO
Share of Equity Sales Edged Up Following Two Months of Decline
Median Price by Sale TypeREO, Short-Sale, Non-Distressed
SOURCE: C.A.R.
Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
Equity Sales Short Sale REOMedian Price
Tight Supply of Inventory for REO Sales
Equity Sales REO Sales Short Sales0
1
2
3
4
5
6
7
8 6.5
2.5
7.4
Feb-12Unsold In-ventory In-dex (Months)
SOURCE: California Association of REALTORS®
Short Sale Inventory Without Contingent Sales
Equity Sales REO Sales Short Sales0
1
2
3
4
5
6
7
8 6.5
2.5
4.5
Feb-12Unsold In-ventory In-dex (Months)
SOURCE: California Association of REALTORS®
California Foreclosure Inventory, March 2012
SOURCE: ForeclosureRadar.com
California Foreclosure Timeframes- March 2012
SOURCE: ForeclosureRadar.com
More Buyers Purchasing Investments & Second/ Vacation Homes
0%
5%
10%
15%
20%
25%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
17%
7%
Investment/Rental Property Vacation/Second Home
Share of First-Time Buyers Fell Below Average
Q. Was the buyer a first-time buyer?
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110.0%
10.0%
20.0%
30.0%
40.0%
50.0%
34%
39%
% First-Time Home Buyers Long Run Average
All Cash Buyers More Than Doubled Since 2007
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110%
5%
10%
15%
20%
25%
30%
13%
27%
% of All Cash Sales
FHA Loans Gained Popularity in Last 4 Years (First Mortgage)
Q. Please indicate the type of mortgage
27.7%
5.0%
0%
5%
10%
15%
20%
25%
30%
35%
40%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
FHA VA
0%
20%
40%
60%
80%
100%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
FRM ARM Other
Types Of New First Mortgages
Q. Please indicate the type of mortgage
CA New Housing Permits2011: 47,015 units, +5.0% YTY; Jan 2012: -18.4% YTD
0
50,000
100,000
150,000
200,000
250,000
300,0001
98
8
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
Single Family Multi-Family
SOURCE: CBIA
Household Growth: 220,000-250,000/yr
Local/Regional Markets
Bay Area
Nonfarm EmploymentBay Area Region
Feb 2011 Feb 2012 Change % Change
San Francisco 936.5 958.3 21.8 2.3%
Oakland 940.9 953.3 12.4 1.3%
San Jose 864.9 891.8 26.9 3.1%
Napa/Solano 115.9 120.1 4.2 3.6%
Sonoma 167.4 168.2 0.8 0.5%
Bay Area Total 3,025.6 3,091.7 66.1 2.2%
Nonfarm Employment (Thousands)
SOURCE: California Economic Development Dept.
Sales of Existing Detached Homes and Pacific West Consumer Confidence
Bay Area, March 2012: 3,808 Units, Up 5.8% YTD, Up 0.7% YTY
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
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20
40
60
80
100
120
140
160Sales Consumer Confidence
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®; The Conference Board
INDEXUNITS
Alameda 606 383 560 46.2% -7.6% 2.6%Contra-Costa (Central County) 339 240 359 49.6% 5.9% 4.9%Marin 177 121 181 49.6% 2.3% 13.4%Napa 109 90 121 34.4% 11.0% 10.6%San Francisco 288 222 280 26.1% -2.8% 0.9%San Mateo 392 280 458 63.6% 16.8% 9.7%Santa Clara 1,013 710 967 36.2% -4.5% -2.9%Solano 464 382 469 22.8% 1.1% 14.6%Sonoma 393 343 412 20.1% 4.8% 18.8%
Y-t-DY-t-YCounty Mar-11 Feb-12 Mar-12 M-t-M
Sales of Existing Detached HomesBay Area Counties
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Median Price of Existing Detached HomesBay Area Counties
Alameda $480,250 $402,880 $425,000 5.5% -11.5%Contra Costa (Central County) $567,310 $515,620 $582,070 12.9% 2.6%Marin $826,700 $732,140 $672,620 -8.1% -18.6%Napa $332,610 $348,000 $351,470 1.0% 5.7%San Francisco $679,780 $592,950 $649,390 9.5% -4.5%San Mateo $666,950 $582,500 $677,900 16.4% 1.6%Santa Clara $550,250 $530,000 $575,250 8.5% 4.5%Solano $193,480 $179,020 $194,310 8.5% 0.4%Sonoma $325,910 $324,710 $317,650 -2.2% -2.5%
Mar-12 M-t-M Y-t-YCounty Mar-11 Feb-12
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
March 2011
February 2012
March2012
Median Time on the Market56.0 Days 62.7 Days 53.2 Days
Unsold Inventory Index4.4 Mos. 4.2 Mos. 3.5 Mos.
Supply IndicatorsBay Area
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Note: The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration. Inventory includes listings with “Active”, “Pending”, and “Contingent” (when available) statuses.
County Mar-11 Feb-12 Mar-12
Alameda 4.1 5.0 3.3Contra-Costa (Central County) 4.9 5.0 3.4Marin 5.1 4.0 4.6Napa 6.4 6.4 5.9San Francisco 5.1 4.8 3.9San Mateo 4.3 4.0 2.4Santa Clara 3.6 3.5 2.5Solano 4.5 3.7 4.0Sonoma 5.0 4.5 4.9S. F. Bay Area 4.4 4.2 3.5
Unsold Inventory Index (Months)
Bay Area
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Notices of Default – Bay AreaHouses and Condos
County/Region 2010-Q4 2011-Q3 2011-Q4QTQ%Chg
YTY%Chg
San Francisco 435 472 409 -13.3% -6.0%Alameda 2,660 2,654 2,117 -20.2% -20.4%Contra Costa 2,931 3,022 2,398 -20.6% -18.2%Santa Clara 2,325 2,176 1,847 -15.1% -20.6%San Mateo 820 908 712 -21.6% -13.2%Marin 276 295 263 -10.8% -4.7%Solano 1,441 1,406 1,245 -11.5% -13.6%Sonoma 884 896 815 -9.0% -7.8%Napa 226 263 206 -21.7% -8.8%Bay Area 11,998 12,092 10,012 -17.2% -16.6%
SOURCE: DataQuick Information Systems
Foreclosures (Trustee Deeds Recorded) – Bay AreaHouses and Condos
County/Region 2010-Q4 2011-Q3 2011-Q4QTQ%Chg
YTY%Chg
San Francisco 156 162 162 0.0% 3.8%Alameda 1,362 1,357 1,038 -23.5% -23.8%Contra Costa 1,559 1,708 1,354 -20.7% -13.1%Santa Clara 901 915 718 -21.5% -20.3%San Mateo 302 352 290 -17.6% -4.0%Marin 129 131 96 -26.7% -25.6%Solano 786 910 697 -23.4% -11.3%Sonoma 443 493 391 -20.7% -11.7%Napa 126 114 85 -25.4% -32.5%Bay Area 5,764 6,142 4,831 -21.3% -16.2%
SOURCE: Data Quick Information Systems
Buyers and Sellers
2011 California Buyer Survey
The Buying Experience
• Considered buying for over 4 months & investigated homes/neighborhoods for 2.5 months, on average, before contacting an agent
• Viewed 12 homes in 8 weeks with agent• 49% owned previous home• Motivated by price decreases & mortgage interest and
property tax deductions• 80% found home through agent• 76% didn’t close escrow on time
How Buyers Found Home- 2011 -
Q. How did you find the home your purcahsed?
Why Buyers Chose their Agent
1. Most responsive (28%)
2. Worked with agent before (18%)
3. First to respond (17%)
4. Most aggressive (16%)
5. Most knowledgeable (6%)
Q. What was the single most important reason for selecting the agent that you used in your recent home purchase?
Satisfaction Ratings
Category Rating
Information on housing market conditions provided by agent 3.27
Agent’s negotiating skills 3.20
Assistance provided by agent in searching for a home 3.39
Professional referrals from agent provided (i.e. lender, inspector, etc.) 3.12
Value received for what you paid the agent 3.61
Overall process of finding a home 3.56
Overall satisfaction with agent 3.44
Q. Please rate your degree of satisfaction with these aspects of your home buying experience (aspects shown in the table above).
Reasons for Satisfaction With Agent
1. Worked hard on my behalf (55%)
2. Helped find the best home for me (55%)
3. Always quick to respond (31%)
4. Negotiated good deal on my behalf (29%)
5. Listened to what we needed (20%)
Q. Why do you have that level of satisfaction with your agent?
Reasons for Dissatisfaction With Agent
1. Slow to respond (51%)
2. Communication problems (19%)
3. Didn’t communicate effectively during transaction (14%)
4. Didn’t negotiate aggressively on my behalf (12%)
5. Wasted time with homes I’m not likely to buy (3%)
Q. Why do you have that level of satisfaction with your agent?
Q. What was the typical response time you expected from your agent to return any form of communication to you?
Over 1/3 of Buyers ExpectInstant Response from Agent
- Up 50% in Recent Years -
2011 California Seller Survey
First-time Sellers
2008 2009 2010 20110%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
33%
44%47% 48%
Q: Was this your first experience in selling a house?
Top 5 Reasons for Selling
Reason Percent of Sellers1. Could not afford mortgage 22%2. Job/income uncertainty 13%3. Loss of household income 12%4. Low prices allowed upgrade 7%5. Mortgage is too expensive 7%
Q: Why did you sell your home?
Most Sellers Did Not Consider Strategic Default
35%
65%
YesNo
Q: As you may be aware, some home owners decided to stop paying their mortgages because their home value was lower than the balance on their loan. This is known as strategic default. Did you consider a strategic default?
Reason Seller Selected Agent
Reason Percentage of Sellers
1. First to respond 21%
2. Seemed most responsive 21%
3. Seemed most aggressive 19%
4. Worked with agent before 11%
5. Understanding of distressed properties 8%
Q: What was the single most important reason for selecting the agent you used in your recent home sale?
Agent / Seller Communication Gap
Text message
Instant messaging
TelephoneFacebook
In-person
69%64%
26%18%
6%5%
73%
1%
47%
3%
Preferred Actual
Q: What was the actual method of communication used most frequently with your agent?
Q: What was your preferred method of communication with your agent?
Agent Satisfaction Ratings
Category Mean Rating
Marketing the home 3.58
Setting the price 3.39
Assuring the buyer is qualified 3.13
Time on market before going into escrow 3.12
Preparing the home for sale 3.11
Value received for what you paid your real estate agent 3.07
Negotiating the transaction 3.04
Escrow closing on time 2.99
Overall satisfaction with the real estate agent 2.82
Communications with your agent 2.72
Overall satisfaction with the home selling process 2.63
Q: Please rate your degree of satisfaction with your agent for each of the following aspects on a scale of 1 to 5, where 1 is least satisfied and 5 is most satisfied.
Response Time is of the Essence
Instantly Within 30 Minutes
Within 1 Hour
Within 2 Hours
Within 4 Hours
Same day 1 business day
0%5%
10%15%20%25%30%35%40%45%
Actual Expected
Q: On average, what was the ACTUAL time of your agent to return any form of communication to you?
Q: What was the typical response time you EXPECTED from your agent to return any form of communication with you?
Direction of Home Prices- Sellers Skeptical, Buyers More Hopeful -
Sellers Buyers0%
10%20%30%40%50%60%70%80%90%
100%
0.62
26%
26%
13% 21%
53%
Down Flat Unsure Up
Q: Do you think home prices in your neighborhood will go up, down or stay flat in one year?
Market Opportunities
Mortgage Rates
0%
1%
2%
3%
4%
5%
6%
7%
8%
20
09
/01
20
09
/04
20
09
/07
20
09
/10
20
10
/01
20
10
/04
20
10
/07
20
10
/10
20
11
/01
20
11
/04
20
11
/07
20
11
/10
20
12
/01
02
.23
.12
03
.15
.12
04
.05
.12
FRM ARM
`
WEEKLYMONTHLY
SOURCE: Federal Home Loan Mortgage Corporation
Mortgage Rates
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
Ja
n-9
1
Ja
n-9
2
Ja
n-9
3
Ja
n-9
4
Ja
n-9
5
Ja
n-9
6
Ja
n-9
7
Ja
n-9
8
Ja
n-9
9
Ja
n-0
0
Ja
n-0
1
Ja
n-0
2
Ja
n-0
3
Ja
n-0
4
Ja
n-0
5
Ja
n-0
6
Ja
n-0
7
Ja
n-0
8
Ja
n-0
9
Ja
n-1
0
Ja
n-1
1
Ja
n-1
2
FRM
ARM
Federal Funds
Median Price to Median HH Income RatioCalifornia
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
0
1
2
3
4
5
6
7
8
9
10
11
4.3
10.2
4.5
SOURCE: California Association of REALTORS®
Average Over Years Shown: 6:1 Ratio
Housing Affordability IndexCalifornia Vs. U.S.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q1
20
00
Q3
20
00
Q1
20
01
Q3
20
01
Q1
20
02
Q3
20
02
Q1
20
03
Q3
20
03
Q1
20
04
Q3
20
04
Q1
20
05
Q3
20
05
Q1
20
06
Q3
20
06
Q1
20
07
Q3
20
07
Q1
20
08
Q3
20
08
Q1
20
09
Q3
20
09
Q1
20
10
Q3
20
10
Q1
20
11
Q3
20
11
CA US
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
% OF HOUSEHOLDS THAT CAN BUY
8 in 10 Americans Agree Buying a Home is the Best Investment One Can Make
SOURCE: Pew Research Center’s “Home Sweet Home. Still. Five Years After the Bubble Burst”
8 in 10 Renters Would Like to Buy in the Future
“…renters are hardly immune to the allure of
homeownership, even in the face of the five-year decline in prices. Asked if they rent
out of choice or because they cannot afford to buy a
home, just 24% say they rent out of
choice.”
SOURCE: Pew Research Center’s “Home Sweet Home. Still. Five Years After the Bubble Burst”
California Housing Market Forecast
California Housing Market Outlook
2005 2006 2007 2008 2009 2010 2011 2012f
SFH Resales (000s)
625.0 477.5 346.9 441.8 546.9 492.3 497.9 502.8
% Change 0.03% -23.6% -27.3% 27.3% 23.8% -10.0% 1.1% 1.0%Median Price ($000s)
$522.7 $556.4 $560.3 $348.5 $275.0 $305.0 $286.0 $290.9
% Change 16.0% 6.5% 0.7% -37.8% -21.1% 10.9% -6.2% 1.7%
30-Yr FRM 5.9% 6.4% 6.3% 6.0% 5.1% 4.7% 4.5% 4.7%
1-Yr ARM 4.5% 5.5% 5.6% 5.2% 4.7% 3.5% 3.0% 3.1%
Source: CALIFORNIA ASSOCIATION OF REALTORS®
Forecast Date: February 2012
Dollar Volume of Sales Down 5% in 2011, Up 3% in 2012
$129 $132
$181
$224
$282
$327
$266
$194
$154$142 $146$150$150
26%
16%
-27%
-21%
3%
-19%
0%-2%
-5%
2%
37%
24%
$0.0
$50.0
$100.0
$150.0
$200.0
$250.0
$300.0
$350.0
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
F
-35%
-25%
-15%
-5%
5%
15%
25%
35%
$ Volume of Sales Percent Change% Change$ in Billion
SOURCE: California Association of REALTORS®
-54%
Summary
Economy: Recession over, slow recovery expected Labor market: mixed signals, job growth slow
Housing: Slow improvement Continued but decreasing numbers of distressed sales Prices – stabilizing in 2012
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