October 7, 2009<br />Leslie Appleton-Young<br />C.A.R. Vice President and Chief Economist<br />2010 California Real Estate...
US and California Economic Conditions<br />
Historic Fiscal Stimulus<br />Fiscal Policy: “Spend Now – Worry Later”<br />	 To date: $3 trillion in government spending<...
SOURCE: Federal Home Loan Mortgage Corporation<br />Mortgage Rates and Monetary Policy“Whatever it Takes”<br />
SOURCE: Federal Home Loan Mortgage Corporation – 30-yr FRM<br />Federal Reserve Board – 10-Year T-Bond<br />30-Year FRM vs...
Consumer Price Index<br />August 2009: All Items -1.4% YTY; Core 1.5% YTY<br />PERCENT CHANGE FROM A YEAR AGO, 100=1982-19...
Gross Domestic Product<br />2008: +0.4%;  2009P -2.6%;  Q2: -0.7%<br />ANNUAL PERCENT CHANGE, CHAIN-TYPE (2005) $<br />ANN...
QUARTERLY PERCENT CHANGE<br />Personal Consumption<br />2009 Q2: -0.87%<br />SOURCE:  US  Dept of Commerce, <br />Bureau o...
U.S. Savings Rate: 1960 – 2009Is increase Permanent or Temporary?<br />SOURCES: BEA S&P 500<br />
Consumer Behavior: Permanent Change or Temporary Hiatus From Spending?<br />“Credit impaired lower income consumers can’t ...
INDEX, 100=1985<br />Consumer Confidence Index: Better…Sort Of<br />August 2009: 54.5    September 2009: 53.1<br />
DJI<br />Monthly Avg.<br />Dow Jones Stock Price and Consumer Confidence<br />30 Industrial Index vs. Consumer Confidence ...
PERCENT CHANGE  FROM A YEAR AGO<br />Retail Sales<br />2009 August - 6.0% YTY<br />
Unemployment Rate<br />California (8/09 12.2%) vs. United States (9/09 9.8%)<br />SOURCE: CA Employment Development Divisi...
Employment Growth, California vs. U.S. 8/09 CA: -4-9% YTY  9/09 US: -4.2% YTY<br />YEAR TO YEAR % CHANGE<br />SOURCE: CA E...
Nonfarm Employment By Region<br />SOURCE: CA Employment Development Division<br />
Employment by Sector<br />YTY % Changes in California 2008-2010<br />% Change<br />SOURCE: CA EDD, LAEDC<br />
New Housing Permits<br />California, 1988-2009: Down 48.8% YTD<br />SOURCE: Construction Industry Research Board<br />
Distressed Commercial RE Growing<br />Distressed properties include those that are in bankruptcy, foreclosures, those that...
Commercial Debt Crisis Ahead<br />billions<br />
Commercial MBS Market<br />billions<br />
California Real Estate Market<br />
California’s Housing Cycles and Membership1970-2009<br />THOUSANDS<br />
Sales Hit Bottom in 2007, Up in 2008 & 2009<br />UNITS/MEDIAN PRICE $<br />-44%<br />-25%<br />California Sales of Existin...
Dollar Volume of Sales Peaked in ’05Down 55% Thru ‘09<br />% Change<br />$ in Billion<br />-55%<br />SOURCE: California As...
Sales of Existing Detached Homes and Pacific West Consumer Confidence<br />California, August 2009 Sales: 526,970 Units, U...
Median Price of Existing Detached Homes<br />California, August 2009: $292,960, Down 16.9% YTY<br />SOURCE: California Ass...
Sales By Price RangeOctober 2004 – present<br />Credit Freeze: 8/2007<br />SOURCE: Mortgage Bankers Association, C.A.R.<br />
California vs U.S. Median Prices 1970-2009<br />     1970: CA $24,640   US $23,000<br />2009: CA $271,000   US $172,600<br...
Peak vs Current Price - August 2009<br />SOURCE: California Association of REALTORS®<br />
Unsold Inventory Index<br />California, August 2009: 4.3 Months<br />MONTHS<br />SOURCE: California Association of REALTOR...
Unsold Inventory Index (Months)<br />SOURCE: California Association of REALTORS®<br />
Unsold Inventory Index: Over & Under $500K<br />SOURCE: California Association of REALTORS®<br />SOURCE: California Associ...
Regional Markets<br />
Home Sales in Northern California<br />SOURCE: California Association of REALTORS®<br />SOURCE: California Association of ...
Median Price of Existing Detached Homes<br />SOURCE: California Association of REALTORS®<br />Northern California<br />SOU...
Home Sales in Northern Wine Country<br />SOURCE: California Association of REALTORS®<br />
Median Price of Existing Detached Homes<br />Northern Wine Country<br />SOURCE: California Association of REALTORS®<br />
Home Sales in Bay Area Counties<br />SOURCE: California Association of REALTORS®<br />
Median Price of Existing Detached Homes<br />Bay Area Counties<br />SOURCE: California Association of REALTORS®<br />
Home Sales in Central Valley Region<br />SOURCE: California Association of REALTORS®<br />
Median Price of Existing Detached Homes<br />Central Valley Regions<br />SOURCE: California Association of REALTORS®<br />
Home Sales in Central Coast Region<br />SOURCE: California Association of REALTORS®<br />SOURCE: California Association of...
Median Price of Existing Detached Homes<br />SOURCE: California Association of REALTORS®<br />SOURCE: California Associati...
Home Sales in Southern California Regions<br />SOURCE: California Association of REALTORS®<br />
Median Price of Existing Detached Homes<br />Southern California Regions<br />SOURCE: California Association of REALTORS®<...
A Tale of Two Markets:San Mateo & Hayward<br />San Mateo, Sep 2009:<br />      Median Price: $698,000 Down 15% YTY<br />  ...
A Tale of Two Markets:Pleasanton & Brentwood<br />Brentwood, Sep 2009:<br />      Median Price: $283,600 Down 19% YTY<br /...
A Tale of Two Markets:Walnut Creek & Concord<br />Concord, Sep 2009:<br />      Median Price: $290,000, Down 16% YTY<br />...
A Tale of Two Markets:Laguna Beach & Temecula<br />Laguna Beach, Sep 2009:<br /> Median Price: $1,370,000, -20% YTY<br /> ...
A Tale of Two Markets:Santa Barbara & Santa Maria<br />Santa Barbara, Sep 2009:<br /> Median Price: $760,200, Down 26% YTY...
Year-to-Year Percent Change in Sales<br />By Price Interval<br />SOURCE: California Association of REALTORS®<br />SOURCE: ...
Year-to-Year Percent Change in Median Price<br />Within Price Interval<br />SOURCE: California Association of REALTORS®<br...
Distressed Sales to Total Sales Ratio<br />(Aug 2009)<br />SOURCE: California Association of REALTORS®<br />
Distressed Sales to Total Sales Ratio<br />SOURCE: California Association of REALTORS®<br />
Distressed Sales vs. Non Distressed Sales<br />Source: C.A.R. 2009 Housing Market Survey<br />
Percent of Distressed Properties <br />Q. Was the property purchased/sold as a foreclosure, REO, short sale, or none of th...
2009 Housing Market Survey<br />
Median Price Discount And <br />Weeks On Market<br />4.6%, 6.4 weeks<br />Q. What was the original list sales price of the...
Percent with Price Discount<br />Selling price below listing price<br />Long Run Average = 68%<br />Q. What was the origin...
Median Net Cash To Sellers<br />2005: $220K   2009: $50K<br />$50,000<br />Q. What was the net cash gain or net loss to th...
Sellers Reporting a Net Cash LossPercent of All Sellers<br />Long Run Average = 9.3%<br />Q. What was the net cash gain or...
Proportion of Home Sellers Planning to Repurchase<br />Q. Is the seller planning on purchasing another home?<br />
Proportion of First-Time HomebuyersCalifornia<br />Q. Was the buyer a first-time buyer?<br />
FHA and VA Mortgages<br />(First Mortgage)<br />Q. Please indicate the type of mortgage<br />
FHA vs. Conventional(New First Mortgages)<br />
Multiple Offers:<br />Over 1/2 homes sold 2009 had multiple offers<br />
Percent of Buyers with Zero Down Payment<br />First-Time Buyers vs. Repeat Buyers<br />5.0%<br />3.7%<br />2.8%<br />
Percent of All Cash Sales<br />
Buyer Use of Property<br />(All Homes)<br />
Buyer Use of Property<br />(Single-Family Detached Homes)<br />
Buyer Use of Property<br />(Condos/Townhomes)<br />
Sellers Are Reacting to Financial Stress<br />The Role of Market Conditions In the Decision to Sell<br />Signs of Distress...
While Buyers See Opportunities …<br />The Role Of Market ConditionsIn The Decision To Buy<br />SOURCE: C.A.R. 2009 Survey ...
The Bottom Line: Great Time to be a First Time Buyer<br />
First-time Buyer Housing Affordability Index<br />California Vs. U.S. 2000-2009<br />% OF HOUSEHOLDS THAT CAN BUY<br />SOU...
Federal First-Time Buyer Tax Credit<br /><ul><li>Legislation Passed February 2009
Retroactive to January 1, 2009
Extended/modified version of 2008 Tax Credit</li></ul>Current expiration November 30, 2009<br />6 month extension under de...
California Results – 39% of first-timers would not have bought in 2009 w/o tax credit (C.A.R. Survey)</li></li></ul><li>Bo...
Level of Difficulty to Obtain Financing(All Buyers)<br />Mean = 8.1  Median = 9<br />Scale: “1” = very easy, “10” = very d...
Reasons Why Property Fell Out of EscrowAll Homes<br />Q. Do you know why the property fell out of escrow previously?<br />
Buyers Who Know the Terms of Their Loan<br />Q. Do you know the term of your loan?<br />
FHA Loans in CA<br /># of Total Loans in CA & US<br />CA Endorsements<br />US Endorsements<br />CA Tops All States with a ...
CA Mortgage Foreclosure & Delinquency Rates<br />California: Q2-2009, NSA<br />Delinquencies: Long Run Average: 4.1%<br />...
California Subprime & Alt A Loans<br />As of May 2009<br />SOURCE: FirstAmerican CoreLogic, LoanPerformance Data, U.S. Cen...
NODs & Trustees Deeds Filed in California<br />2005 - 2009<br />No. of Defaults or TDs<br />Source: DataQuick Information ...
California Foreclosure Activity 09/06 - present<br />Government Intervention<br />SOURCE: ForeclosureRadar.com<br />
California Foreclosure Activity 2008 - present<br />September 18, 2008:<br /> Paulson asks For TARP Funds<br />September 2...
2010 Forecast<br />
Wild Cards<br /><ul><li>First-time Buyer Tax Credit
Additional Stimulus – Job Creation Prerequisite to Sustainable Growth
Foreclosure Pipeline
Commercial Defaults – Impact on Credit Market
Inflation - Will Fed monetize the deficit?
H1N1 (Stock tip: Purell)</li></li></ul><li>U.S. Economy<br />Forecast Date: October 2009<br />SOURCE: California Associati...
California Economy<br />Forecast Date: October 2009<br />SOURCE: California Association of REALTORS®<br />
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2010 Real Estate Forecast

  1. 1. October 7, 2009<br />Leslie Appleton-Young<br />C.A.R. Vice President and Chief Economist<br />2010 California Real Estate Market ForecastCalifornia REALTOR® EXPO<br />
  2. 2. US and California Economic Conditions<br />
  3. 3.
  4. 4. Historic Fiscal Stimulus<br />Fiscal Policy: “Spend Now – Worry Later”<br /> To date: $3 trillion in government spending<br />MBS purchases ($693 billion)<br />TARP ($372 billion) <br />Obama stimulus package ($304 billion)<br /> Cash for Clunkers<br /> First-time Buyer Tax Credit<br /> Extension of Unemployment Benefits<br /> Tax Cuts<br />Result: Federal budget deficit will reach 1.6 trillion this year <br />
  5. 5. SOURCE: Federal Home Loan Mortgage Corporation<br />Mortgage Rates and Monetary Policy“Whatever it Takes”<br />
  6. 6. SOURCE: Federal Home Loan Mortgage Corporation – 30-yr FRM<br />Federal Reserve Board – 10-Year T-Bond<br />30-Year FRM vs. 10-Year T-Bond <br /> Above-Average Risk Premiums Associated With Mortgage Loans<br />Lower spread in 2009 - FED purchases<br />from Fannie and Freddie<br />Average. Risk Premium: 1.6%<br />
  7. 7. Consumer Price Index<br />August 2009: All Items -1.4% YTY; Core 1.5% YTY<br />PERCENT CHANGE FROM A YEAR AGO, 100=1982-1984<br />
  8. 8. Gross Domestic Product<br />2008: +0.4%; 2009P -2.6%; Q2: -0.7%<br />ANNUAL PERCENT CHANGE, CHAIN-TYPE (2005) $<br />ANNUAL<br />QTRLY<br />
  9. 9. QUARTERLY PERCENT CHANGE<br />Personal Consumption<br />2009 Q2: -0.87%<br />SOURCE: US Dept of Commerce, <br />Bureau of Economic Analysis<br />
  10. 10. U.S. Savings Rate: 1960 – 2009Is increase Permanent or Temporary?<br />SOURCES: BEA S&P 500<br />
  11. 11. Consumer Behavior: Permanent Change or Temporary Hiatus From Spending?<br />“Credit impaired lower income consumers can’t spend the way they used to and wealth impaired affluent consumers won’t.”<br />UCLA Forecast 9/09<br />
  12. 12. INDEX, 100=1985<br />Consumer Confidence Index: Better…Sort Of<br />August 2009: 54.5 September 2009: 53.1<br />
  13. 13. DJI<br />Monthly Avg.<br />Dow Jones Stock Price and Consumer Confidence<br />30 Industrial Index vs. Consumer Confidence Index 1987-2009<br />Cons.<br /> Conf.<br />
  14. 14. PERCENT CHANGE FROM A YEAR AGO<br />Retail Sales<br />2009 August - 6.0% YTY<br />
  15. 15. Unemployment Rate<br />California (8/09 12.2%) vs. United States (9/09 9.8%)<br />SOURCE: CA Employment Development Division<br />
  16. 16. Employment Growth, California vs. U.S. 8/09 CA: -4-9% YTY 9/09 US: -4.2% YTY<br />YEAR TO YEAR % CHANGE<br />SOURCE: CA Employment Development Division<br />
  17. 17. Nonfarm Employment By Region<br />SOURCE: CA Employment Development Division<br />
  18. 18. Employment by Sector<br />YTY % Changes in California 2008-2010<br />% Change<br />SOURCE: CA EDD, LAEDC<br />
  19. 19. New Housing Permits<br />California, 1988-2009: Down 48.8% YTD<br />SOURCE: Construction Industry Research Board<br />
  20. 20. Distressed Commercial RE Growing<br />Distressed properties include those that are in bankruptcy, foreclosures, those that have received lender forbearance, or lender REO.<br />billions<br />
  21. 21. Commercial Debt Crisis Ahead<br />billions<br />
  22. 22. Commercial MBS Market<br />billions<br />
  23. 23. California Real Estate Market<br />
  24. 24. California’s Housing Cycles and Membership1970-2009<br />THOUSANDS<br />
  25. 25. Sales Hit Bottom in 2007, Up in 2008 & 2009<br />UNITS/MEDIAN PRICE $<br />-44%<br />-25%<br />California Sales of Existing Homes and Median Price<br />-61%<br />SOURCE: California Association of REALTORS®<br />
  26. 26. Dollar Volume of Sales Peaked in ’05Down 55% Thru ‘09<br />% Change<br />$ in Billion<br />-55%<br />SOURCE: California Association of REALTORS®<br />
  27. 27. Sales of Existing Detached Homes and Pacific West Consumer Confidence<br />California, August 2009 Sales: 526,970 Units, Up 38.2% YTD, Up 9.0% YTY<br />INDEX<br />UNITS<br />SOURCE: California Association of REALTORS®; The Conference Board<br />*Sales are seasonally adjusted and annualized <br />
  28. 28. Median Price of Existing Detached Homes<br />California, August 2009: $292,960, Down 16.9% YTY<br />SOURCE: California Association of REALTORS®<br />
  29. 29. Sales By Price RangeOctober 2004 – present<br />Credit Freeze: 8/2007<br />SOURCE: Mortgage Bankers Association, C.A.R.<br />
  30. 30. California vs U.S. Median Prices 1970-2009<br /> 1970: CA $24,640 US $23,000<br />2009: CA $271,000 US $172,600<br />SOURCE: California Association of REALTORS®<br />SOURCE: California Association of REALTORS®<br />
  31. 31. Peak vs Current Price - August 2009<br />SOURCE: California Association of REALTORS®<br />
  32. 32. Unsold Inventory Index<br />California, August 2009: 4.3 Months<br />MONTHS<br />SOURCE: California Association of REALTORS®<br />
  33. 33. Unsold Inventory Index (Months)<br />SOURCE: California Association of REALTORS®<br />
  34. 34. Unsold Inventory Index: Over & Under $500K<br />SOURCE: California Association of REALTORS®<br />SOURCE: California Association of REALTORS®<br />
  35. 35. Regional Markets<br />
  36. 36. Home Sales in Northern California<br />SOURCE: California Association of REALTORS®<br />SOURCE: California Association of REALTORS®<br />
  37. 37. Median Price of Existing Detached Homes<br />SOURCE: California Association of REALTORS®<br />Northern California<br />SOURCE: California Association of REALTORS®<br />
  38. 38. Home Sales in Northern Wine Country<br />SOURCE: California Association of REALTORS®<br />
  39. 39. Median Price of Existing Detached Homes<br />Northern Wine Country<br />SOURCE: California Association of REALTORS®<br />
  40. 40. Home Sales in Bay Area Counties<br />SOURCE: California Association of REALTORS®<br />
  41. 41. Median Price of Existing Detached Homes<br />Bay Area Counties<br />SOURCE: California Association of REALTORS®<br />
  42. 42. Home Sales in Central Valley Region<br />SOURCE: California Association of REALTORS®<br />
  43. 43. Median Price of Existing Detached Homes<br />Central Valley Regions<br />SOURCE: California Association of REALTORS®<br />
  44. 44. Home Sales in Central Coast Region<br />SOURCE: California Association of REALTORS®<br />SOURCE: California Association of REALTORS®<br />
  45. 45. Median Price of Existing Detached Homes<br />SOURCE: California Association of REALTORS®<br />SOURCE: California Association of REALTORS®<br />
  46. 46. Home Sales in Southern California Regions<br />SOURCE: California Association of REALTORS®<br />
  47. 47. Median Price of Existing Detached Homes<br />Southern California Regions<br />SOURCE: California Association of REALTORS®<br />
  48. 48.
  49. 49. A Tale of Two Markets:San Mateo & Hayward<br />San Mateo, Sep 2009:<br /> Median Price: $698,000 Down 15% YTY<br /> 54 SF Det Units Sold, Up 26% YTY<br /> 2.0 Months of Supply, Down 45% YTY<br /> 206 Properties For Sale, Down 20% YTY<br /> 173 NODs, 119 Foreclosures, 42 REOS<br />Hayward, Sep 2009:<br /> Median Price: $280,000 Down 12% YTY<br /> 116 SF Det Units Sold, Down 13% YTY<br /> 1.0 Month of Supply, Down 77% YTY<br /> 391 Properties For Sale, Down 65% YTY<br /> 895 NODs, 811 Foreclosures, 324 REOS<br />Source: ForeclosureRadar.com, C.A.R.<br />
  50. 50. A Tale of Two Markets:Pleasanton & Brentwood<br />Brentwood, Sep 2009:<br /> Median Price: $283,600 Down 19% YTY<br /> 70 SF Det Units Sold, Down 33% YTY<br /> 1.2 Months of Supply, Down 74% YTY<br /> 322 Properties For Sale, Down 46% YTY<br /> 476 NODs, 424 Foreclosures, 190 REOS<br />Pleasanton, Sep 2009:<br /> Median Price: $685,000, Down 13% YTY<br /> 63 SF Det Units Sold, Up 91% YTY<br /> 3.0 Months of Supply, Down 55% YTY<br /> 239 Properties For Sale, Down 34% YTY<br /> 165 NODs, 97 Foreclosures, 29 REOS<br />Source: ForeclosureRadar.com, C.A.R.<br />
  51. 51. A Tale of Two Markets:Walnut Creek & Concord<br />Concord, Sep 2009:<br /> Median Price: $290,000, Down 16% YTY<br /> 66 SF Det Units Sold, Down 35% YTY<br /> 1.0 Month of Supply, Down 72% YTY<br /> 283 Properties For Sale, Down 52% YTY<br /> 605 NODs, 413 Foreclosures, 239 REOS<br />Walnut Creek, Sep 2009:<br /> Median Price: $650,000 Down 13% YTY<br /> 39 SF Det Units Sold, Up 18% YTY<br /> 3.0 Months of Supply, Down 34% YTY<br /> 216 Properties For Sale, Down 19% YTY<br /> 207 NODs, 132 Foreclosures, 59 REOS<br />Source: ForeclosureRadar.com, C.A.R.<br />
  52. 52. A Tale of Two Markets:Laguna Beach & Temecula<br />Laguna Beach, Sep 2009:<br /> Median Price: $1,370,000, -20% YTY<br /> 29 SF Det Units Sold, Up 142% YTY<br /> 12.0 Months of Supply, Down 48% YTY<br /> 388 Properties For Sale, Up 2% YTY<br />75 NODs, 52 Foreclosures, 14 REOS<br />Temecula, Sep 2009:<br /> Median Price: $270,000 Down 7% YTY<br /> 153 SF Det Units Sold, Down 19% YTY<br /> 1.0 Months of Supply, Down 80% YTY<br /> 667 Properties For Sale, Down 56% YTY<br />845 NODs, 821 Foreclosures, 276 REOS<br />Source: ForeclosureRadar.com, C.A.R.<br />
  53. 53. A Tale of Two Markets:Santa Barbara & Santa Maria<br />Santa Barbara, Sep 2009:<br /> Median Price: $760,200, Down 26% YTY<br /> 54 SF Det Units Sold, Down 4% YTY<br /> 7.0 Months of Supply, Down 36% YTY<br /> 463 Properties For Sale, Down 4% YTY<br />147 NODs, 139 Foreclosures, 48 REOS<br />Santa Maria, Sep 2009:<br /> Median Price: $262,750 Up 2% YTY<br /> 64 SF Det Units Sold, Down 36% YTY<br /> 2.0 Months of Supply, Down 69% YTY<br /> 2208 Properties For Sale, Down 65% YTY<br /> 432 NODs, 432 Foreclosures, 180 REOS<br />Source: ForeclosureRadar.com, C.A.R.<br />
  54. 54. Year-to-Year Percent Change in Sales<br />By Price Interval<br />SOURCE: California Association of REALTORS®<br />SOURCE: Mortgage Bankers Association, C.A.R.<br />
  55. 55. Year-to-Year Percent Change in Median Price<br />Within Price Interval<br />SOURCE: California Association of REALTORS®<br />SOURCE: Mortgage Bankers Association, C.A.R.<br />
  56. 56. Distressed Sales to Total Sales Ratio<br />(Aug 2009)<br />SOURCE: California Association of REALTORS®<br />
  57. 57. Distressed Sales to Total Sales Ratio<br />SOURCE: California Association of REALTORS®<br />
  58. 58. Distressed Sales vs. Non Distressed Sales<br />Source: C.A.R. 2009 Housing Market Survey<br />
  59. 59. Percent of Distressed Properties <br />Q. Was the property purchased/sold as a foreclosure, REO, short sale, or none of the above?<br />Source: C.A.R. 2009 Housing Market Survey<br />
  60. 60. 2009 Housing Market Survey<br />
  61. 61. Median Price Discount And <br />Weeks On Market<br />4.6%, 6.4 weeks<br />Q. What was the original list sales price of the property? What was the final sales price of the property? How many weeks did the property remain on the MLS?<br />
  62. 62. Percent with Price Discount<br />Selling price below listing price<br />Long Run Average = 68%<br />Q. What was the original list sales price of the property? What was the final sales price of the property? <br />
  63. 63. Median Net Cash To Sellers<br />2005: $220K 2009: $50K<br />$50,000<br />Q. What was the net cash gain or net loss to the seller as a result of this sale?<br />
  64. 64. Sellers Reporting a Net Cash LossPercent of All Sellers<br />Long Run Average = 9.3%<br />Q. What was the net cash gain or net loss to the seller as a result of this sale?<br />
  65. 65. Proportion of Home Sellers Planning to Repurchase<br />Q. Is the seller planning on purchasing another home?<br />
  66. 66. Proportion of First-Time HomebuyersCalifornia<br />Q. Was the buyer a first-time buyer?<br />
  67. 67. FHA and VA Mortgages<br />(First Mortgage)<br />Q. Please indicate the type of mortgage<br />
  68. 68. FHA vs. Conventional(New First Mortgages)<br />
  69. 69. Multiple Offers:<br />Over 1/2 homes sold 2009 had multiple offers<br />
  70. 70. Percent of Buyers with Zero Down Payment<br />First-Time Buyers vs. Repeat Buyers<br />5.0%<br />3.7%<br />2.8%<br />
  71. 71. Percent of All Cash Sales<br />
  72. 72. Buyer Use of Property<br />(All Homes)<br />
  73. 73. Buyer Use of Property<br />(Single-Family Detached Homes)<br />
  74. 74. Buyer Use of Property<br />(Condos/Townhomes)<br />
  75. 75. Sellers Are Reacting to Financial Stress<br />The Role of Market Conditions In the Decision to Sell<br />Signs of Distress in 2008-2009<br />SOURCE: C.A.R. 2009 Survey of Home Sellers<br />
  76. 76. While Buyers See Opportunities …<br />The Role Of Market ConditionsIn The Decision To Buy<br />SOURCE: C.A.R. 2009 Survey of Home Buyers<br />
  77. 77. The Bottom Line: Great Time to be a First Time Buyer<br />
  78. 78. First-time Buyer Housing Affordability Index<br />California Vs. U.S. 2000-2009<br />% OF HOUSEHOLDS THAT CAN BUY<br />SOURCE: California Association of REALTORS®<br />
  79. 79. Federal First-Time Buyer Tax Credit<br /><ul><li>Legislation Passed February 2009
  80. 80. Retroactive to January 1, 2009
  81. 81. Extended/modified version of 2008 Tax Credit</li></ul>Current expiration November 30, 2009<br />6 month extension under deliberation<br /><ul><li>National Impact – 1.4 million families in US (IRS)
  82. 82. California Results – 39% of first-timers would not have bought in 2009 w/o tax credit (C.A.R. Survey)</li></li></ul><li>Bought Home Regardless of Federal First-Time Home Buyer Tax Credit?<br />Q. Would you have bought a home if there were not a Federal First-Time Home Buyer Tax Credit, or if you knew you did not qualify for the credit? CAR Telephone Survey 2009<br />
  83. 83. Level of Difficulty to Obtain Financing(All Buyers)<br />Mean = 8.1 Median = 9<br />Scale: “1” = very easy, “10” = very difficult<br />Q. Please rate how easy of difficult it was to obtain financing on a scale of 1 to 10, with 1 being very easy and 10 being very difficult. <br />
  84. 84. Reasons Why Property Fell Out of EscrowAll Homes<br />Q. Do you know why the property fell out of escrow previously?<br />
  85. 85. Buyers Who Know the Terms of Their Loan<br />Q. Do you know the term of your loan?<br />
  86. 86. FHA Loans in CA<br /># of Total Loans in CA & US<br />CA Endorsements<br />US Endorsements<br />CA Tops All States with a 10% Market Share of all FHA Lending in US <br />(Source: Inside FHA Lending)<br />Source: HUD <br />
  87. 87. CA Mortgage Foreclosure & Delinquency Rates<br />California: Q2-2009, NSA<br />Delinquencies: Long Run Average: 4.1%<br />Foreclosure Rate: Long Run Average: 1.0%<br />SOURCE: Mortgage Bankers Association<br />
  88. 88. California Subprime & Alt A Loans<br />As of May 2009<br />SOURCE: FirstAmerican CoreLogic, LoanPerformance Data, U.S. Census Bureau, and Federal Reserve Bank of New York, compiled by C.A.R.<br />
  89. 89. NODs & Trustees Deeds Filed in California<br />2005 - 2009<br />No. of Defaults or TDs<br />Source: DataQuick Information Systems<br />
  90. 90. California Foreclosure Activity 09/06 - present<br />Government Intervention<br />SOURCE: ForeclosureRadar.com<br />
  91. 91. California Foreclosure Activity 2008 - present<br />September 18, 2008:<br /> Paulson asks For TARP Funds<br />September 2008:<br /> CA SB 1137 Takes Effect<br />Government Intervention<br />March 4, 2009:<br />Making Home Affordable/HAMP<br />February 20, 2009:<br /> CA Foreclosure Prevention Act<br />February 11 2009:<br />Frank’s Moratorium Request<br />SOURCE: ForeclosureRadar.com<br />
  92. 92. 2010 Forecast<br />
  93. 93. Wild Cards<br /><ul><li>First-time Buyer Tax Credit
  94. 94. Additional Stimulus – Job Creation Prerequisite to Sustainable Growth
  95. 95. Foreclosure Pipeline
  96. 96. Commercial Defaults – Impact on Credit Market
  97. 97. Inflation - Will Fed monetize the deficit?
  98. 98. H1N1 (Stock tip: Purell)</li></li></ul><li>U.S. Economy<br />Forecast Date: October 2009<br />SOURCE: California Association of REALTORS®<br />
  99. 99. California Economy<br />Forecast Date: October 2009<br />SOURCE: California Association of REALTORS®<br />
  100. 100. 2009 Forecast vs. Actual<br />
  101. 101. California Housing Market Forecast<br />Forecast Date: October 2008<br />SOURCE: California Association of REALTORS®<br />
  102. 102. 2010 California Houisng<br />Market Forecast<br />
  103. 103. California Housing Market Outlook<br />Forecast Date: October 2009<br />Source: CALIFORNIA ASSOCIATION OF REALTORS®<br />
  104. 104. Market Opportunities<br /><ul><li>First time buyers: Growing share of the market
  105. 105. Connect with past clients: Valuable information to share
  106. 106. Educate clients: What is Responsible Homeownership?
  107. 107. Educate yourself: Professional Development is Critical
  108. 108. Listen to your clients</li></li></ul><li>Thank Youlesliea@car.org<br />
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