2012 Real Estate Market Update
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2012 Real Estate Market Update

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Leslie Appleton-Young, Chief Economist/California Association of Realtors presents his annual report to the California Desert Association of Realtors. ...

Leslie Appleton-Young, Chief Economist/California Association of Realtors presents his annual report to the California Desert Association of Realtors.

The Palm Springs desert area (Coachella Valley) housing market is on the upswing once again.

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2012 Real Estate Market Update 2012 Real Estate Market Update Presentation Transcript

  • Real Estate Market Update/ 2012 FORECASTCalifornia Desert AORJanuary 26, 2012Leslie Appleton-Young, Chief Economist
  • Overview US and California Economies California Housing Market Regional & Local Markets 2011 Annual Market Survey 2012 Housing Market Forecast CA Buyers & Sellers in Today’s Housing Market
  • U.S. Economic Outlook
  • Economy Slowly Gaining Post-Stimulus Momentum GDP 2010: 2.8% 2011:1.8% 2012: 2.6% 8% 7% 6% ANNUAL QTRLY 5% 4% 3% 2% 1% 0%-1%-2%-3% 2009 Largest Annual Drop since 1938 (-3.4%)-4%-5%-6%-7%-8% 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Q3-10 Q1-11 Q3-11
  • Performance Targets for National Economy Current This Year - Target Projected Unemployment 6% 9.0% US GDP 3% or higher 1.8% Nonfarm Job 3%+ or 1.0% Growth 400K+/mo CPI 2.5% 3.2%SOURCE: California Association of REALTORS®
  • Consumer Spending Rebounding Holiday and Auto Sales Consumer Spending 2011 Q3: 2.4%8% QUARTERLY PERCENT CHANGE6%4%2%0%-2%-4% 1Q-2000 1Q-2001 1Q-2002 1Q-2003 1Q-2004 1Q-2005 1Q-2006 1Q-2007 1Q-2008 1Q-2009 1Q-2010 1Q-2011SOURCE: US Dept of Commerce, Bureau of Economic Analysis
  • 20 40 60 80 100 120 140 160Jan-00Jul-00Jan-01Jul-01Jan-02Jul-02 INDEX, 100=1985Jan-03Jul-03Jan-04Jul-04Jan-05Jul-05Jan-06Jul-06Jan-07Jul-07Jan-08 December 2011: 64.5Jul-08Jan-09Jul-09Jan-10Jul-10Jan-11Jul-11 Consumer Confidence: Nov/Dec Rebound Holiday Shoppers & Improved Jobs Reports
  • CA Underwater Mortgages: Reverse Wealth Effect Negative Equity Share in CA Near Negative Equity Share in CA 40% 35% 30.2% 30% 25% 20% 15% 10% 4.6% 5% 0% Q4‐2009 Q1‐2010 Q2‐2010 Q3‐2010 Q4‐2010 Q1‐2011 Q2‐2011SOURCE: CoreLogic
  • Unemployment: Heading Lower U.S. at 3 year low December 2011California (11.1%) vs. United States (8.5%)14% CA US12%10% 8% 6% 4% 2% 0% Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11SOURCE: CA Employment Development Division
  • U.S. Non-farm Job Growth: Gaining! Month-to-Month Changes Recession Job Losses: 8.8 million Since Jan’10: +2.4 million 600,000 400,000 200,000 0 -200,000 -400,000 -600,000 -800,000 -1,000,000 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11SOURCE: US Dept of Labor, Bureau of Labor Statistics
  • California Non-farm Job Growth Month-to-Month Changes Recession Job Losses: 1.3 million Since Jan’10: +282,000 100000 80000 60000 40000 20000 0 -20000 -40000 -60000 -80000 -100000 -120000 -140000 -160000 Nov-08 Nov-09 Nov-10 Nov-11 Jul-08 Sep-08 Jul-09 Sep-09 Jul-10 Sep-10 Jul-11 Sep-11 Jan-08 Jan-09 Jan-10 Jan-11 May-08 May-09 May-10 May-11 Mar-08 Mar-09 Mar-10 Mar-11SOURCE: CA Employment Development Division
  • Where are California’s Jobs? Employment Trends:Construction & Financial Sectors Biggest Losers Year to Industry 2005 Jul-11 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 -727,800SOURCE: California Association of REALTORS®
  • CA New Housing Permits 2011: 47,015 units, Up 5.0% from 2010 300,000 Single Family Multi-Family 250,000 Household Growth: 220,000-250,000/yr 200,000 150,000 100,000 50,000 0 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010SOURCE: CBIA
  • Classic Liquidity Trap: Consumers Deleveraging Low Rates and Tight Credit Fed easing through 201210%9%8%7%6%5%4%3%2% FRM ARM1% Federal Funds0% Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 SOURCE: Federal Home Loan Mortgage Corporation
  • US Deficit Highest in Decades 2010: 11% of GDP (Revenues – Expenses) 4.0% Deficit as a % of GDP 2.0% 0.0% ‐2.0% ‐4.0% ‐6.0% ‐8.0% ‐10.0% ‐12.0% 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010Source: US Treasury, BEA, compiled by C.A.R.Note: Positive = Surplus
  • Federal Issues – Critical Concerns for the REALTOR Party Future of Fannie and Freddie? FHA? Tax Reform on the horizon – Mortgage Interest Deduction? QRM (Qualified Residential Mortgage) 20% Down requirement -- Is the future of the 30 year mortgage in doubt?
  • U.S. Economic Outlook 2005 2006 2007 2008 2009 2010 2011f 2012f • US GDP 3.1% 2.7% 2.0% 0.0% -2.6% 2.9% 1.8% 2.6% Nonfarm Job 1.7% 1.8% 1.1% -0.6% -4.4% -0.7% 1.0% 0.9% Growth 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, % 1.3% 4.0% 2.2% 0.5% 0.9% 1.4% 1.7% 1.5% Change Forecast Date: January 2012SOURCE: California Association of REALTORS®
  • California Economic Outlook 2005 2006 • 2007 2008 2009 2010 2011f 2012fNonfarm Job 1.8% 1.7% 0.8% -1.3% -6.0% -1.4% 1.5% 2.1%GrowthUnemployment 5.4% 4.9% 5.4% 7.2% 11.4% 12.4% 12.0% 11.2%RatePopulation 1.2% 1.1% 1.1% 1.2% 1.1% 0.9% 0.9% 0.9%GrowthReal DisposableIncome, % 1.3% 3.4% 1.5% 0.1% -2.2% 1.6% 1.5% 2.0%Change Forecast Date: January 2012 SOURCE: California Association of REALTORS®
  • California Housing Market
  • Sales Hit Bottom 4 Years Ago Median Price 2011 = 2002 UNITS/MEDIAN PRICE $ “Lost Decade” Sales of Existing Detached Homes Median Price 700,000 -44% 600,000 500,000 -61% -25% 400,000 300,000 200,000 100,000 0 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010SOURCE: California Association of REALTORS®
  • Sales of Existing Detached Homes and Pacific West Consumer Confidence• California, December 2011 Sales: 520,940 Units, Up 1.1% YTD, Up 0.1% YTY UNITS Sales Consumer Confidence INDEX 700,000 160 600,000 140 120 500,000 100 400,000 80 300,000 60 200,000 40 100,000 20 0 0 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 SOURCE: California Association of REALTORS®; The Conference Board *Sales are seasonally adjusted and annualized
  • Mortgage Loan Applications for Purchase January 20, 2012: 184.8600 INDEX, 100 = 03/16/90500400300200100 0 Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12Source: Mortgage Bankers Association
  • Mortgage Applications – Total Purchase Loans (Weekly % Chg.) 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% Aug-11 Nov-11 Apr-11 Sep-11 Oct-11 Jan-11 Dec-11 Jan-12 Feb-11 Jun-11 Jul-11 May-11 Mar-11Source: Mortgage Bankers Association
  • Median Price of Existing Detached Homes California, December 2011: $285,920, Down 6.2% YTY$700,000 P: May-07 $594,530$600,000$500,000 T: Feb-09 $245,230$400,000 -59% from peak$300,000$200,000$100,000 $0 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11SOURCE: California Association of REALTORS®
  • Trough vs. Current Price – December 2011 Southern California Trough Trough Dec-11 % Chg From Region Month Price Median Trough San Bernardino County May-09 $120,410 $128,450 6.7% Ventura Couty Feb-09 $359,630 $391,060 8.7% Orange County Jan-09 $442,170 $484,630 9.6% San Diego County Mar-09 $326,830 $359,930 10.1% Palm Springs/Lower Desert Apr-09 $150,140 $165,960 10.5% Inland Empire Apr-09 $150,860 $172,430 14.3% CALIFORNIA Feb-09 $245,230 $285,920 16.6% Southern California Apr-09 $246,063 $286,950 16.6% Los Angeles Metro Apr-09 $227,370 $265,830 16.9% Riverside County Apr-09 $171,480 $203,650 18.8% Los Angeles County May-09 $248,850 $306,950 23.3%SOURCE: California Association of REALTORS®
  • 0 2 4 6 8 10 12 14 16 18 20 MONTHS Jan-88 Jan-89 Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Unsold Inventory Index Jan-06 Jan-07 Jan-08 Jan-09 California, December 2011: 4.2 Months Jan-10 Jan-11
  • Tight Supply of Inventory for REO Sales 2011UnsoldInventory Index 8.9(Months) 9 6.7 8 7 6 5 2.7 4 3 2 1 0 Equity Sales REO Sales Short Sales SOURCE: California Association of REALTORS®
  • Higher Price = Higher Inventory Unsold Inventory Index (Months of Supply) Price Range (Thousand) Dec-10 Nov-11 Dec-11 $1,000K+ 8.2 9.6 8.3 $750-1000K 5.7 7.0 5.9 $500-750K 4.7 6.0 4.5 $300-500K 4.9 5.3 4.4 $0-300K 4.9 4.7 3.9SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
  • California’s Million-Dollar Home Sales Year 1988 2,718 1989 4,271 1990 3,773 1991 3,362 1992 2,890 1993 2,298 1994 2,522 1995 2,017 1996 2,651 1997 3,762 1998 5,366 1999 8,906 2000 13,101 2001 10,658 2002 15,703 2003 20,595 2004 36,990 2005 54,773 2006 50,010 2007 42,506 2008 24,436 2009 18,621 2010 22529 0 10000 20000 30000 40000 50000 60000 Number of HomesSource: DataQuick Information Systems
  • Market Breakdown:Equity v. Distressed Sales
  • Share of Distressed Sales to Total Sales Dec‐11 REOs, 24.6% Equity Sales,  Short Sales,  52.7% 22.2% Other Distressed  Sales (Not  Specified), 0.5%SOURCE: California Association of REALTORS®
  • Share of Equity Sales Increased Throughout 2011 Equity Sales Short Sale Bank Owned 60% 50% 40% 30% 20% 10% 0% Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11SOURCE: ForeclosureRadar.com
  • Distressed Sales: Southern California(Percent of Total Sales) Dec-11 100% 80% 63% 67% 60% 49% 42% 40% 28% 20% 0% Los Angeles Orange Riverside SOURCE: California Association of REALTORS® San Bernardino San Diego
  • REO & Short Sales: Southern California(Percent of Total Sales) 100% Dec 2011 80% Short Sales REO Sales 60% 19% 31% 40% 27% 26% 20% 21% 47% 31% 10% 15% 0% 18% Los Angeles Orange Riverside San SOURCE: California Association of REALTORS® Bernardino San Diego
  • Mortgage Foreclosure & Delinquency Rates California: Q3-2011 Delinquency Rate Foreclosure Rate 12% 10% 7.6% 8% Delinquencies: Long Run Average: 4.4% 6% 4% 3.6% Foreclosure Rate: Long Run Average: 1.2% 2% 0% Q1/74 Q2/75 Q3/76 Q4/77 Q1/79 Q2/80 Q3/81 Q4/82 Q1/84 Q2/85 Q3/86 Q4/87 Q1/89 Q2/90 Q3/91 Q4/92 Q1/94 Q2/95 Q3/96 Q4/97 Q1/99 Q2/00 Q3/01 Q4/02 Q1/04 Q2/05 Q3/06 Q4/07 Q1/09 Q2/10 Q3/11SOURCE: Mortgage Bankers Association
  • California Foreclosure Outcomes, Dec. 2011 REO: -16.4% YTD • 3rd Party: +5.0% YTD • Cancel: -13.1% YTD REOs Sold to 3rd Party Cancellations 6 Month Average: 30,000 REO: 8,950 25,000 3rd Party: 3,353 Cancelled: 13,243 20,000 15,000 10,000 5,000 0 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jan-07 Apr-07 Oct-07 Jan-08 Apr-08 Oct-08 Jan-09 Apr-09 Oct-09 Jan-10 Apr-10 Oct-10 Jan-11 Apr-11 Oct-11SOURCE: ForeclosureRadar.com
  • California Foreclosure Inventories, Dec. 2011 Preforeclosure: -19.7% YTD • Schedule for Sale: -21.7% YTD • Bank Owned: 0.6% YTD Preforeclosure Scheduled for Sale Bank Owned 6 Month Average: 200,000 Preforeclosure: 109,200 Schedule for Sale: 89,029 Bank Owned: 100,887 150,000 100,000 50,000 0 Jan-07 Apr-07 Jul-07 Jul-08 Jul-09 Oct-07 Jan-08 Apr-08 Oct-08 Jan-09 Apr-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11SOURCE: ForeclosureRadar.com
  • 0 10 20 30 40 50 60 Q1/84 Q1/85 THOUSANDS Q1/86 Q1/87 Q1/88 Q1/89 Q1/90SOURCE: Real Estate Research Council Q1/91 Q1/92 Q1/93 Q1/94 Q1/95 Q1/96 Q1/97 Q1/98 Q1/99 Q1/00 Q1/01 Foreclosures Q1/02 Southern California Q1/03 Q1/04 Q1/05 Q1/06 Q1/07 Q1/08 Q1/09 Q1/10 Q1/11
  • Palm Desert Preforeclosure: 199 • Auction: 123 • Bank Owned: 88Source: ForeclosureRadar.com as of 01/19/2012.
  • La Quinta Preforeclosure: 159 • Auction: 138 • Bank Owned: 100Source: ForeclosureRadar.com as of 01/19/2012.
  • Indio Preforeclosure: 315 • Auction: 205 • Bank Owned: 157Source: ForeclosureRadar.com as of 01/19/2012.
  • Sacramento Preforeclosure: 2,216 • Auction: 1,905 • Bank Owned: 1,560Source: ForeclosureRadar.com as of 08/19/11
  • Sacramento Preforeclosure: 2,216 • Auction: 1,905 • Bank Owned: 1,560Source: ForeclosureRadar.com as of 08/19/11
  • Sacramento Preforeclosure: 2,216 • Auction: 1,905 • Bank Owned: 1,560Source: ForeclosureRadar.com as of 08/19/11
  • Sacramento Preforeclosure: 2,216 • Auction: 1,905 • Bank Owned: 1,560Source: ForeclosureRadar.com as of 08/19/11
  • Local Market Conditions
  • Sales of Residential Properties Palm Desert, 2011: 1,514 Units, Up 7.4% YTY 180 160 140 120 100 80 60 2010 40 2011 20 0 O ct Apr S ep t Ju l Nov D ec M ar F eb Ju n Aug Jan M aySOURCE: Clarus Market Metrics
  • Sales of Residential Homes Palm Desert, December 2011: 121 Unit , Up 17.5% MTM, Down 2.4% YTYSOURCE: Clarus Market Metrics
  • Median Price of Residential Homes Palm Desert, December 2011: $265,000 Up 6.0% MTM, Down 8.5% YTYSOURCE: Clarus Market Metrics
  • Sales of Residential Properties La Quinta, 2011: 1,353 Units, Up 5.5% YTY 160 140 120 100 80 60 2010 40 20 2011 0 Oct Nov Dec Apr Sept Jul Jan Feb Jun Aug May MarSOURCE: Clarus Market Metrics
  • Sales of Residential Homes La Quinta, December 2011: 129 Units Up 51.8% MTM, Up 18.3% YTYSOURCE: Clarus Market Metrics
  • Median Price of Residential Homes La Quinta, December 2011: $285,000 Down 9.8% MTM, Up 0.4% YTYSOURCE: Clarus Market Metrics
  • Sales of Residential Properties Indio, 2011: 1,461 Units, Down 2.1% YTY 200 180 160 140 120 100 80 60 2010 40 2011 20 0 O ct Apr S ep t Ju l Nov D ec M ar F eb Ju n Aug Jan M aySOURCE: Clarus Market Metrics
  • Sales of Residential Homes Indio, December 2011: 125 Units Up 26.3% MTM, Down 4.6% YTYSOURCE: Clarus Market Metrics
  • Median Price of Residential Homes Indio, December 2011: $159,900 Up 6.6% MTM, Down 8.6% YTYSOURCE: Clarus Market Metrics
  • 2011 Annual Housing Market Survey
  • Equity vs. REO vs. Short Sales Equity Sales REO Sales Short SalesShare of Total Sales 58.7% 19.7% 20.2%Median Home Price $431,000 $240,000 $287,000Square Footage 1,783 1,500 1,600Price / SF $250 $112 $175Sales‐to‐List Price Ratio 95.9% 98.0% 95.9%% of Sales With Multiple Offers 35.2% 58.3% 57.5%Avg. Number of Offers 3.0 3.0 3.6% of All Cash Sales 25.5% 34.0% 23.3%Days on MLS 67 50 141Days in Escrow 35 35 45
  • Proportion of Sellers Planning to Repurchase 80% 70% 60% 50% 40% 30% 20% 10% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Q. Is the seller planning on purchasing another home?
  • Reasons Sellers Not Planning to Buy Another Home Seller is a lender/bank 19.8% Seller prefers to have less financial obligation 11.4% Poor credit background 10.9% Lack of cash for down payment 5.7% Out of work/unemployment 4.9% Decide to live with family/friends 4.7% Waiting for market to bottom 2.7% 0% 10% 20% 30% 40% 50%Q. Why is the seller not planning to purchase another home?
  • Reasons For Selling All Home Sellers Foreclosure/Short Sale/Default Change in Family Status Retirement/Move to Retirement Community Investment/ Tax Consderations Desired Better Location Desired Smaller Home Changed Jobs Desired Larger Home Other 0% 5% 10% 15% 20% 25% 30% 35%Q. What was the single most important reason for selling/buying the property?
  • Investments & Second/ Vacation Homes Investment/Rental Property Vacation/Second Home25%20% 7%15%10% 17%5%0%
  • Foreign Buyers 10% % of Foreign Buyers 8% 8% 6% 6% 6% 5% 4% 2% 0% 2008 2009 2010 2011Q. Was the buyer a foreign buyer?
  • California Housing Market Forecast
  • Forecast Progress Report 2010  2011  Projected  Forecast  2011  2010 Actual October  October  Projected 2010 2010 SFH Resales  492.0 491.5 502.0 491.1 (000s) % Change ‐10.0% ‐10.1% 2.0% ‐0.1% Median Price  $306.5 $303.1 $312.5 $291.0 ($000s) % Change 11.5% 10.2% 2.0% ‐4.0% Forecast Date: September 2011 vs October 2010Source: CALIFORNIA ASSOCIATION OF REALTORS®
  • California Housing Market Outlook 2005 2006 2007 2008 2009 2010 2011f 2012f SFH Resales 625.0 477.5 346.9 441.8 546.9 491.5 491.1 496.2 (000s) % Change 0.03% -23.6% -27.3% 27.3% 23.8% -10.1% -0.1% 1.0% Median Price $522.7 $556.4 $560.3 $348.5 $275.0 $303.1 $291.0 $296.0 ($000s) % Change 16.0% 6.5% 0.7% -37.8% -21.1% 10.2% -4.0% 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% Forecast Date: September 2011Source: CALIFORNIA ASSOCIATION OF REALTORS®
  • Real Estate Buyers & Sellers in Today’s Market
  • How Buyers Found Home - 2011 -Q. How did you find the home your purcahsed?
  • The Buying ExperienceConsidered buying for over 4 monthsShopped 2.5 months before contacting agentViewed 12 homes in 8 weeks with agent76% of buyers didn’t close escrow on time49% owned previous homeMotivated by price decreases, low mortgagerates and tax deductions80% found home through agent
  • The Selling ExperienceHome was listed more than 2 monthsbefore opening escrowMedian escrow length was 1.5 monthsOnly 40% of sellers said their escrowclosed on time20% of sellers used electronic signature
  • 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 youused in your recent home purchase?
  • Why Sellers Chose their Agent 1. First to Respond (21%) 2. Seemed most responsive (21%) 3. Seemed most aggressive (19%) 4. Worked with agent before (16%) 5. Understanding of distressed properties (6%)Q. What was the single most important reason for selecting the agent that youused in your recent home purchase?
  • Buyer Method of Communicating With Agent Preferred Actual E-mail 73% 70% Telephone 37% 50% Text message 32% 1% Twitter 21% 0% Facebook 14% 0% In-person 6% 3%Q. What was your preferred method of communicating with your agent? How didyour agent actually communicate with you?
  • Preferred Actual 73% 69% 64% 47% 26% 18% 3% 5% 6% 1%Q: What was your preferred method of communication with your agent?Q: What was the actual method of communication used most frequently with your agent? Agent / Seller Communication Gap
  • Buyer Expected vs Actual Agent Response Time Expected Actual 100% 90% 80% 70% 60% 50% 37% 37% 40% 28% 30% 18% 16% 20% 15% 13% 7% 11% 8% 6% 10% 2% 4% 0% 0% Instantly Within Within 1 Within 2 Within 4 Same day 1 30mins. hr. hrs. hrs. businessQ. What was the typical response time you expected from dayyour agent to return any form of communication to you?Q. On average, what was the actual response time of youragent to return any form of communication to you?
  • Actual Expected 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Instantly Within 30  Within 1  Within 2  Within 4  Same day 1  Minutes Hour Hours Hours business  dayQ: What was the typical response time you EXPECTED from your agent to return any form of communication with you?Q: On average, what was the ACTUAL time of your agent to return any form of communication to you? Seller Response Time is of the Essence
  • Buyer 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?
  • Buyer 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?
  • What Buyers Would Like to Change About their Home Buying Experience 1. Faster response from agent (30%) 2. Better agent negotiation (27%) 3. Better agent communication (25%) 4. Better market direction understanding (19%) 5. Escrow close on time (9%)Q. If there is one thing you would like to change about your home buyingexperience, what would that be?
  • Quick Facts About Buyers• 59% found their agent online• 51% Googled their agent• 52% used social media in the buying process• 93% are receptive to receiving information via social media
  • How Internet Was Used Activity Percentage of Buyers Preview homes to narrow search 75% Find an agent 68% Identify homes for agent to show 47% Find a real estate firm 40% Learn about neighborhoods 33% Get information about financing & downpayments 33%Q. For which of the following did you use the internet as a part of your homebuying process?
  • Buyer Importance of Online Features in Home ViewingQ. Please rate the following online features by the level of importance in your home viewingon a scale of one to five, with five being extremely important and one being not at allimportant.
  • Top 10 Websites Used Real estate agent websiteQ. Which websites did you use as part of your home buying process?
  • 52% of Buyers Used Social Media Activity Percent of Buyers Who Engaged in Activity Agent referrals 33% Video home tours 26% Agent Facebook page 24% Home buying tips 23% Comments on neighborhoods 21% Neighborhood lifestyle 20%Q. How did you use social media (such as Facebook, Twitter, LinkedIn, etc.) inyour home buying process?
  • 77% of Sellers Used Social MediaQ: Which social media websites did you use to learn more about and communicate withreal estate agents and companies?
  • Closing Thoughts
  • Direction of Home Prices: Sellers Skeptical; Buyers Hopeful Down Flat Unsure Up 100% 80% 60% 40% 20% 0% Sellers BuyersQ: Do you think home prices in your neighborhood will go up, down or stay flat in one year, five years and 10 years?
  • Real Estate: It’s Time To Buy Again “Forget stocks. Dont bet on gold. After four years of plunging home prices, the most attractive asset class in America is housing.”SOURCE: “Real estate: It’s time to buy again” Fortune Magazine’s 3/28/11 article written by Shawn Tully
  • 8 in 10 Americans Agree Buying a Home is the Best Investment One Can MakeSOURCE: 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”
  • C.A.R. Strategic Planning Books
  • Thank Youwww.car.org.marketdata lesliea@car.org