CAR_EconomicForcast_April_20_2012
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California Association of Realtors presentation by Oscar Wei, senior researcher at the CA Community College Real Estate Educators' Conference - Hilton, Oakland Airport. Friday, April 20, 2012

California Association of Realtors presentation by Oscar Wei, senior researcher at the CA Community College Real Estate Educators' Conference - Hilton, Oakland Airport. Friday, April 20, 2012

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  • - Sales dropped slightly by 2.3% from last year, but continued to sell at a solid pace by historical standard. The first quarter of 2012 was down 0.9% from 2011. Peak:624,957 units in 2005Valley:189,345 units in 19822011 annual sales up 1.1% from 20102010 annual sales down 10.0% from 20092009 annual sales up 23.8% from 20082008 annual sales up 27.3% from 20072007 annual sales down 27.3% from 20062006 annual sales down 23.6% from 20052005 annual sales up 0.03% from 20042004 annual sales up 3.8% from 20032003 annual sales up 5.1% from 20022002 annual sales up 13.6% from 2001 2001 annual sales down 5.9% from 2000 YTD2000 annual sales down 0.4 from 19991999 sales up 6.4% over 199810/93: 41.0Consumer Confidence01/00: 148.603/03: 63.05/07: 128.42/09: 23.9
  • The statewide median price was at $291,080 in March 12, as compared to $266,660 in Feb 12 and $286,550 (revised) in Mar 11.  It registered its first yty% gain since Oct 2010, snapping a series of 16 consecutive months with yty% decrease.  The median price was the highest since August 2011 and was 18.7% above the cyclical bottom of $245,230 reached in Feb 2009.   -  The median price was up 9.2% MTM vs LR avg of 3.3%, and was the largest increase since March 2004 when it registered a mtm% increase of 9.3%. The mtm increase in price was much stronger than the typical seasonal change for this time of the year. Now up 18.7% from trough in Feb-09Peak: $560,270 in 2007Valley: $177,270 in 1996High: May 2007: $594,5302000 annual median price up 11.0% over 19992001 annual median price up 8.7% from 20002002 annual median price up 20.5% from 20012003 annual median price up 17.5% from 20022004 annual median price up 21.3% from 20032005 annual median price up 16.0% from 20042006 annual median price up 6.5% from 20052007 annual median price up 0.7% from 20062008 annual median price down 37.8% from 20072009 annual median price down 21.1% from 20082010 annual median price up 10.2% from 20092011 annual median price down 6.2% from 2010
  • Time to Foreclose—The average number of days between the filing of the Notice of Default and the final sale at auction for foreclosure sales that occurred during the specified month. Time to Resell—The average number of days between the final sale at auction and when the property was resold by the bank or 3rd party.
  • More than one-fourth of all buyers purchased their properties with all cash.
  • The majority of buyers found the home they bought through an agent.
  • These are the qualities agents should market in their value propositions because it is what buyers are seeking.
  • Buyers did not rate any of the categories above a 4, this could be a reflection of dwindling consumer sentiment, poor market conditions and the economic recession.
  • Monthly from 2009 to present, weekly for the past 8 weeks

CAR_EconomicForcast_April_20_2012 CAR_EconomicForcast_April_20_2012 Presentation Transcript

  • 2012 California Real Estate Market Forecast Real Estate Education Center April 20, 2012Oscar 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  SpeechesSpeeches & Presentations
  • US and CaliforniaEconomic Conditions
  • Gross Domestic Product 2011: 1.7%; 2011 Q4: 3.0%ANNUAL PERCENT CHANGE, CHAIN-TYPE (2005) $ 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 Q2-10 Q4-10 Q2-11 Q4-11
  • Unemployment: Heading Lower U.S. at 3 year low California vs. United States 14% CA US 12% 10% 8% 6% 4% 2% 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: CA Employment Development Division
  • U.S. Non-farm Job Growth Month-to-Month Changes Recession Job Losses: 8.8 million Since Jan’10: +3.4 million 600,000 400,000 200,000 0 -200,000 -400,000 -600,000 -800,000 -1,000,000 Jul-08 Oct-08 Jul-09 Oct-09 Jul-10 Oct-10 Jul-11 Oct-11 Apr-08 Apr-09 Apr-10 Apr-11 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12SOURCE: 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: +308,200 100000 80000 60000 40000 20000 0 -20000 -40000 -60000 -80000 -100000 -120000 -140000 -160000 Nov-08 Nov-09 Nov-10 Nov-11 Jul-08 Jul-09 Jul-10 Jul-11 Jan-08 Sep-08 Jan-09 Sep-09 Jan-10 Sep-10 Jan-11 Sep-11 Jan-12 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®
  • 100 120 140 160 20 40 60 80Jan-88Jan-89 INDEX, 100=1985Jan-90Jan-91Jan-92Jan-93Jan-94Jan-95Jan-96Jan-97Jan-98Jan-99Jan-00Jan-01Jan-02 March 2012: 70.2Jan-03Jan-04Jan-05Jan-06 Consumer Confidence IndexJan-07Jan-08Jan-09Jan-10Jan-11Jan-12
  • -4% -2% 0% 2% 4% 6% 8% 10% 12% 14% 16%Jan-80Jan-81Jan-82Jan-83Jan-84Jan-85Jan-86Jan-87Jan-88Jan-89Jan-90Jan-91Jan-92Jan-93Jan-94Jan-95Jan-96Jan-97 PERCENT CHANGE FROM A YEAR AGO, 100=1982-1984Jan-98Jan-99 CoreJan-00 All ItemsJan-01Jan-02 Consumer Price IndexJan-03Jan-04Jan-05Jan-06Jan-07Jan-08Jan-09 March 2012: All Items +2.6% YTY; Core +2.2% YTYJan-10Jan-11Jan-12
  • Performance Targets for National Economy Current 2011 Target 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®
  • 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 1.7% 1.8% 1.1% -0.6% -4.4% -0.7% 1.2% 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% 1.8% 1.3% 1.5% Change Revised Date: March 2012SOURCE: California Association of REALTORS®
  • California Economic Outlook 2005 2006 2007 2008 2009 2010 2011 2012fNonfarm Job 1.8% 1.7% 0.8% -1.3% -6.0% -1.1% 0.9% 2.1%GrowthUnemployment 5.4% 4.9% 5.4% 7.2% 11.3% 12.4% 11.7% 11.2%RatePopulation 0.7% 0.7% 0.8% 0.8% 0.6% 0.7% 0.7% 0.9%GrowthReal DisposableIncome, % 1.2% 4.4% 1.3% 1.0% -3.1% 1.8% 1.5% 2.0%Change Revised Date: March 2012SOURCE: California Association of REALTORS®
  • 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 Confidence California, March 2012 Sales: 505,360 Units, Down 0.9% YTD, Down 2.3% YTY UNITS INDEX Sales Consumer Confidence 700,000 160 600,000 140 120 500,000 100 400,000 80 300,000 60 200,000 40 100,000 20 0 0SOURCE: California Association of REALTORS®; The Conference Board *Sales are seasonally adjusted and annualized
  • Median Price of Existing Detached Homes California, March 2012: $291,080, Up 1.6% 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 $-SOURCE: California Association of REALTORS®
  • Unsold Inventory Index California, March 2012: 4.1 MonthsMONTHS 20 18 16 14 12 10 8 6 4 2 0 Jan-11 Jan-98 Jan-88 Jan-89 Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 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-12 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.SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
  • Higher Price = Higher Inventory Unsold Inventory Index (Months of Supply) 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 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.SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
  • Unsold Inventory By Price Range January 2005 – March 2012MONTHS 30 $0 - 300K 25 $300-500K $500-750K 20 $750-1000K $1,000K+- 15 10 5 0 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.SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
  • Share of Distressed Sales to Total Sales Feb-12 REOs, 25.2% Equity Sales, 51.1% Short Sales, 23.0% Other Distressed Sales (Not Specified), 0.7%SOURCE: California Association of REALTORS®
  • Share of Equity Sales Edged Up Following Two Months of Decline Equity Sales Short Sale REO 60% 50% 51.1% 40% 30% 25.2% 20% 23.0% 10% 0% 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-12SOURCE: California Association of REALTORS®
  • Median Price by Sale Type REO, Short-Sale, Non-Distressed Median Price Equity Sales Short Sale REO $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12SOURCE: C.A.R.
  • Tight Supply of Inventory for REO Sales Feb-12UnsoldInventory Index(Months) 7.4 8 6.5 7 6 5 4 2.5 3 2 1 0 Equity Sales REO Sales Short Sales SOURCE: California Association of REALTORS®
  • Short Sale Inventory Without Contingent Sales Feb-12UnsoldInventory Index(Months) 8 6.5 7 6 4.5 5 4 2.5 3 2 1 0 Equity Sales REO Sales Short Sales SOURCE: California Association of REALTORS®
  • California Foreclosure Inventory, March 2012SOURCE: ForeclosureRadar.com
  • California Foreclosure Timeframes- March 2012SOURCE: ForeclosureRadar.com
  • More Buyers PurchasingInvestments & Second/ Vacation Homes Investment/Rental Property Vacation/Second Home25%20% 7%15%10% 17%5%0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
  • Share of First-Time Buyers Fell Below Average % First-Time Home Buyers Long Run Average50.0% 39%40.0% 34%30.0%20.0%10.0% 0.0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Q. Was the buyer a first-time buyer?
  • All Cash Buyers More Than Doubled Since 2007 % of All Cash Sales 30% 27% 25% 20% 13% 15% 10% 5% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
  • FHA Loans Gained Popularity in Last 4 Years (First Mortgage) 40% FHA VA 35% 5.0% 30% 25% 20% 15% 27.7% 10% 5% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Q. Please indicate the type of mortgage
  • Types Of New First Mortgages 100% FRM ARM Other 80% 60% 40% 20% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Q. Please indicate the type of mortgage
  • CA New Housing Permits 2011: 47,015 units, +5.0% YTY; Jan 2012: -18.4% YTD 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
  • Local/Regional Markets
  • Bay Area
  • Nonfarm Employment Bay Area Region Nonfarm Employment (Thousands) 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%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 UNITS INDEX Sales Consumer Confidence 8,000 160 7,000 140 6,000 120 5,000 100 4,000 80 3,000 60 2,000 40 1,000 20 0 0 Jul-00 Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 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: CALIFORNIA ASSOCIATION OF REALTORS®; The Conference Board
  • Sales of Existing Detached Homes Bay Area Counties County Mar-11 Feb-12 Mar-12 M-t-M Y-t-Y Y-t-DAlameda 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%SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
  • Median Price of Existing Detached Homes Bay Area Counties County Mar-11 Feb-12 Mar-12 M-t-M Y-t-YAlameda $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%SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
  • Supply Indicators Bay Area March February March 2011 2012 2012 56.0 Days 62.7 Days 53.2 Days Median Time on the Market 4.4 Mos. 4.2 Mos. 3.5 Mos. Unsold Inventory Index 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.SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
  • Unsold Inventory Index (Months) Bay Area County Mar-11 Feb-12 Mar-12 Alameda 4.1 5.0 3.3 Contra-Costa (Central County) 4.9 5.0 3.4 Marin 5.1 4.0 4.6 Napa 6.4 6.4 5.9 San Francisco 5.1 4.8 3.9 San Mateo 4.3 4.0 2.4 Santa Clara 3.6 3.5 2.5 Solano 4.5 3.7 4.0 Sonoma 5.0 4.5 4.9 S. F. Bay Area 4.4 4.2 3.5SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
  • Notices of Default – Bay Area Houses and Condos QTQ% YTY% County/Region 2010-Q4 2011-Q3 2011-Q4 Chg 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 Area Houses and Condos QTQ% YTY% County/Region 2010-Q4 2011-Q3 2011-Q4 Chg 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 3.44Q. Please rate your degree of satisfaction with these aspects of your home buying experience (aspects shown in the table above).
  • Reasons for Satisfaction With Agent1. 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 Agent1. 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?
  • Over 1/3 of Buyers Expect Instant Response from Agent - Up 50% in Recent Years -Q. What was the typical response time you expected from your agent to return any form of communication to you?
  • 2011 California Seller Survey
  • 50% 47% 48% 45% 44% 40% 35% 33% 30% 25% 20% 15% 10% 5% 0% 2008 2009 2010 2011Q: Was this your first experience in selling a house? First-time Sellers
  • Reason Percent of Sellers 1. 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? Top 5 Reasons for Selling
  • Most Sellers Did Not Consider Strategic Default 35% Yes 65% NoQ: 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?
  • 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
  • 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 2.63Q: 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. Agent Satisfaction Ratings
  • 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? Response Time is of the Essence
  • Direction of Home Prices - Sellers Skeptical, Buyers More Hopeful - Down Flat Unsure Up100% 13% 21% 80% 26% 60% 53% 40% 62% 20% 26% 0% Sellers BuyersQ: Do you think home prices in your neighborhood will go up, down or stay flat in one year?
  • Market Opportunities
  • 0% 1% 2% 3% 4% 5% 6% 7% 8%2009/012009/042009/072009/102010/01 MONTHLY2010/042010/072010/10 ` FRM2011/01 ARM2011/04 Mortgage Rates2011/072011/102012/0102.23.1203.15.12 WEEKLY04.05.12
  • 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 FRM ARM Jan-98 Jan-99SOURCE: Federal Home Loan Mortgage Corporation Federal Funds Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Mortgage Rates Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
  • Median Price to Median HH Income Ratio California 11 10.2 Average Over Years Shown: 6:1 Ratio 10 9 8 7 6 5 4.5 4.3 4 3 2 1 0 1994 2001 2008 1989 1990 1991 1992 1993 1995 1996 1997 1998 1999 2000 2002 2003 2004 2005 2006 2007 2009 2010 2011SOURCE: California Association of REALTORS®
  • 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q1 2000 Q3 2000 Q1 2001 Q3 2001 Q1 2002 Q3 2002 Q1 2003 Q3 2003 % OF HOUSEHOLDS THAT CAN BUY Q1 2004 Q3 2004SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® Q1 2005 Q3 2005 Q1 2006 Q3 2006 Q1 2007 California Vs. U.S. Q3 2007 Q1 2008 Q3 2008 Q1 2009 Housing Affordability Index CA Q3 2009 Q1 2010 Q3 2010 US Q1 2011 Q3 2011
  • 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 ofhomeownership, even in theface of the five-year declinein 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 625.0 477.5 346.9 441.8 546.9 492.3 497.9 502.8 (000s) % Change 0.03% -23.6% -27.3% 27.3% 23.8% -10.0% 1.1% 1.0% Median Price $522.7 $556.4 $560.3 $348.5 $275.0 $305.0 $286.0 $290.9 ($000s) % 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%Forecast Date: February 2012Source: CALIFORNIA ASSOCIATION OF REALTORS®
  • Dollar Volume of Sales Down 5% in 2011, Up 3% in 2012 $ in Billion % Change $ Volume of Sales Percent Change $350.0 37% 35% $300.0 26% $327 24% 25% $282 16% -54% $250.0 $266 15% 2% $224 $200.0 3% $194 0% 5% $181 -2% -5% $150.0 $154 $150 $150 -5% -19% $142 $146 $129 $132 $100.0 -15% -21% -27% $50.0 -25% $0.0 -35% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012FSOURCE: California Association of REALTORS®
  • 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
  • www.car.org/marketdata  SpeechesSpeeches & Presentations The End - - Thank You