08 5-10 westendpros
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08 5-10 westendpros 08 5-10 westendpros Presentation Transcript

  • 2010 California Real Estate Market Update West End Professionals Rancho Cucamonga August 5, 2010 Leslie Appleton Young Chief Economist CALIFORNIA ASSOCIATION OF REALTORS®
  • US and California Economic Conditions
  • Gross Domestic Product
    • 2009: -2.4%; 2010 Q1: 3.7% Q2: 2.4%
    ANNUAL PERCENT CHANGE, CHAIN-TYPE (2005) $ ANNUAL QTRLY 2009 Largest Annual Drop since 1938 (-3.4%)
  • Unemployment Rate
    • California vs. United States
    SOURCE: CA Employment Development Division
  • California Non-farm Job Growth SOURCE: CA Employment Development Division Month-to-Month Changes 1/08 – 5/10
  • Nonfarm Employment By Region SOURCE: CA Employment Development Division
  • Consumer Confidence Index: Summer Gloom INDEX, 100=1985
  • Consumer Price Index
    • May 2010: All Items +2.0%; Core +.9%
    PERCENT CHANGE OVER LAST 12 MONTHS
  • Historic Monetary Stimulus
  • Mortgage Rates at 50 Year Lows SOURCE: Federal Home Loan Mortgage Corporation
  • Conv/Conf 30-Yr FRM vs. N.C. Jumbo 30-Yr FRM
    • Spread
    SOURCE: Inside Mortgage Finance, compiled by C.A.R. Note: data for research purposes only, do not redistribute L/R Avg Spread: 1.6%
  • Distressed Commercial RE Growing billions Distressed properties include those that are in bankruptcy, foreclosures, those that have received lender forbearance, or lender REO .
  • Economy Summary
    • Worst behind us, slow recovery expected
    • Government support in first half of 2010; slower second half
    • Private sector economy must accelerate thereafter
    • Labor market: mixed signals, job growth in late ’10
    • Inflation: in check for next year to 18 months
    • Monetary policy: no rate hikes in first half of year, up by ¼ point by year-end but only if recovery looks stable
  • 2010 Forecast
  • U.S. Economic Outlook SOURCE: California Association of REALTORS® Forecast Date: June 18, 2010
  • California Economic Outlook SOURCE: California Association of REALTORS® Forecast Date: June 18, 2010
  • California Real Estate Market
  • Sales Hit Bottom in 2007, Up in 2008 & 2009
    • California Sales of Existing Homes and Median Price
    UNITS/MEDIAN PRICE $ SOURCE: California Association of REALTORS® -61% -25% -44%
  • Dollar Volume of Sales Peaked in ’05 Down 54% Thru ‘09 % Change $ in Billion SOURCE: California Association of REALTORS® -54% *Based on $248,000 Median Price . *
  • Sales of Existing Detached Homes and Pacific West Consumer Confidence
    • California, June 2010 Sales: 492,800 Units, down 4.2% YTY, Down 5.3% YTD
    INDEX UNITS SOURCE: California Association of REALTORS®; The Conference Board *Sales are seasonally adjusted and annualized
  • Median Price of Existing Detached Homes
    • California, May 2010: $324,430, Up 23.2% YTY
    SOURCE: California Association of REALTORS®
  • Median Price of Existing Detached Homes
    • California, June 2010: $311,950, Up 13,6% YTY
    SOURCE: California Association of REALTORS®
  • Sales By Price Range October 2004 – present SOURCE: Mortgage Bankers Association, C.A.R.
  • Peak vs. Trough Price SOURCE: California Association of REALTORS®
  • Trough vs. Current Price – Jun 2010 SOURCE: California Association of REALTORS®
  • Peak vs. Current Price – Jun 2010 SOURCE: California Association of REALTORS®
  • California’s Million-Dollar Home Sales Source: DataQuick Information Systems Year Number of Homes
  • Unsold Inventory Index
    • California, June 2010: 4.8 Months
    SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® MONTHS
  • Unsold Inventory Index (Months) SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
  • Distressed Sales to Total Sales Ratio
  • Distressed Sales to Total Sales Ratio SOURCE: California Association of REALTORS®
  • Distressed Sales Breakdown (June 2010)
  • Mortgage Foreclosure & Delinquency Rates
    • California: Q4-2009
    SOURCE: Mortgage Bankers Association Delinquencies: Long Run Average: 4.1% Foreclosure Rate: Long Run Average: 1.0%
  • REOs Are Even, Cancellations Are Up
    • May-10: 13,719 REOs • 4,027 Sold to 3 rd Party • 17,262 Cancelled
    SOURCE: ForeclosureRadar.com 6 Month Average: REO: 13,709 3 rd Party: 3,741 Cancelled: 15,553
  • Summing Up Foreclosures
    • Government Intervention kept Foreclosures around 30-40% of home sales toward the end of 2009, pace expected to continue into 2010
    • NODs have come down from historic highs in first half of 2009 but have spread into higher priced areas
    • Cancellations on the rise – due in large part to:
      • statutory requirement that a foreclosure sale be held within one year-forced cancellation )
      • some form of loan workout: HAMP modification, short sale or refinance
      • Filing errors
    • Lenders lack the incentive to flood the marketplace with Foreclosures
  • Riverside County Economic Profile
  • Sales of Existing Detached Homes and Pacific West Consumer Confidence
    • Riverside County, June 2010: 1,627 Units, Down 18.0% YTD, Down 18.5% YTY
    SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®; The Conference Board INDEX UNITS
  • Sales of Existing Detached Homes
    • Riverside County, 2009: 21,026 Units, Up 21.7% YTY
    SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® UNITS ANNUAL MONTHLY
  • Median Price of Existing Detached Homes
    • Riverside County, June 2010: $202,850, Up 17.8% YTY
    SOURCE: CALIFORNIA ASSOCIATION OF REALTORS ®
  • Median Price Annual Comparison
    • Riverside County, 2009: $172,714, Down 27.7% YTY
    SOURCE: CALIFORNIA ASSOCIATION OF REALTORS ® MONTHLY ANNUAL
  • Median Home Sales Price
    • Riverside County
    SOURCE: C.A.R.; DataQuick Information Systems. The price statistics are derived from all types of home sales -- new and existing, condos and single-family.
  • Median Home Sales Price
    • Riverside County
    SOURCE: C.A.R.; DataQuick Information Systems. The price statistics are derived from all types of home sales -- new and existing, condos and single-family.
  • Unsold Inventory Index
    • Riverside and San Bernardino Counties, June 2010 : 3.9 Months
    SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® MONTHS
  • Median Time on the Market
    • Single-Family Homes – Riverside/San Bernardino, May 2010: 31.3 Days
    SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
  • Foreclosures
    • Riverside County
    SOURCE: Real Estate Research Council
  • Ratio of Foreclosures to Home Sales
    • Riverside County
    SOURCE: Real Estate Research Council
  • San Bernardino County Economic Profile
  • Sales of Existing Detached Homes and Pacific West Consumer Confidence
    • San Bernardino County, June 2010: 566 Units, Down 22.7% YTD, Down 25.5% YTY
    SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®; The Conference Board INDEX UNITS
  • Sales of Existing Detached Homes
    • San Bernardino County, 2009: 7,937 Units, Up 34.5% YTY
    UNITS SOURCE: CALIFORNIA ASSOCIATION OF REALTORS ® ANNUAL MONTHLY
  • Median Price of Existing Detached Homes
    • San Bernardino County, June 2010: $170,260, Up 17.4% YTY
    SOURCE: CALIFORNIA ASSOCIATION OF REALTORS ®
  • Median Price Annual Comparison
    • San Bernardino County, 2009: $149,578, Down 31.9% YTY
    SOURCE: CALIFORNIA ASSOCIATION OF REALTORS ® MONTHLY ANNUAL
  • Median Home Sales Price
    • San Bernardino County
    SOURCE: C.A.R.; DataQuick Information Systems. The price statistics are derived from all types of home sales -- new and existing, condos and single-family.
  • Median Home Sales Price
    • San Bernardino County
    SOURCE: C.A.R.; DataQuick Information Systems. The price statistics are derived from all types of home sales -- new and existing, condos and single-family.
  • Unsold Inventory Index
    • Riverside and San Bernardino Counties, June 2010 : 3.9 Months
    SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® MONTHS
  • Median Time on the Market
    • Single-Family Homes – Riverside/San Bernardino, May 2010: 31.3 Days
    SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
  • Foreclosures
    • San Bernardino County
    SOURCE: Real Estate Research Council
  • Ratio of Foreclosures to Home Sales
    • San Bernardino County
    SOURCE: Real Estate Research Council
  • Rancho Cucamonga
  • Sales of Single-Family Detached Home SOURCE: Clarus Market Metrics Rancho Cucamonga, July 2010: 114 Units, -18.0% MTM, -5.0% YTY
  • Median Price of Single-Family Detached Home SOURCE: Clarus Market Metrics Rancho Cucamonga, July 2010: $342,000, +0.6% MTM, +9.3% YTY
  • Number of For Sale Properties SOURCE: Clarus Market Metrics Rancho Cucamonga, July 2010: 654 Units, -3.3% MTM, -6.8% YTY
  • Months Supply of Inventory
    • Rancho Cucamonga, July 2010: 2.9 Months
    SOURCE: Clarus Market Metrics
  • Rancho Cucamonga: Foreclosure Mapping (Hybrid) Preforeclosure: 289 • Auction: 520 • Bank Owned: 111 Source: ForeclosureRadar.com
  • Rancho Cucamonga: Foreclosure Mapping (Street) Preforeclosure: 289 • Auction: 520 • Bank Owned: 111 Source: ForeclosureRadar.com Ontario
  • Ontario
  • Sales of Single-Family Detached Home SOURCE: Clarus Market Metrics Ontario, July 2010: 96 Units, -23.8% MTM, -35.6% YTY
  • Median Price of Single-Family Detached Home SOURCE: Clarus Market Metrics Ontario, July 2010: $226,000, +1.9% MTM, +15.9% YTY
  • Number of For Sale Properties SOURCE: Clarus Market Metrics Ontario, July 2010: 550 Units, -11.3% MTM, -12.7% YTY
  • Months Supply of Inventory
    • Ontario, July 2010: 2.0 Months
    SOURCE: Clarus Market Metrics
  • Ontario: Foreclosure Mapping (Hybrid) Preforeclosure: 276 • Auction: 495 • Bank Owned: 130 Source: ForeclosureRadar.com
  • Ontario: Foreclosure Mapping (Street) Preforeclosure: 276 • Auction: 495 • Bank Owned: 130 Source: ForeclosureRadar.com Ontario
  • Fontana
  • Sales of Single-Family Detached Home SOURCE: Clarus Market Metrics Fontana, July 2010: 230 Units, -25.1% MTM, -42.8% YTY
  • Median Price of Single-Family Detached Home SOURCE: Clarus Market Metrics Fontana, July 2010: $205,000, -4.7% MTM, +13.9% YTY
  • Number of For Sale Properties SOURCE: Clarus Market Metrics Fontana, July 2010: 1,431 Units, -8.6% MTM, -21.1% YTY
  • Months Supply of Inventory
    • Fontana, July 2010: 3.0 Months
    SOURCE: Clarus Market Metrics
  • Fontana: Foreclosure Mapping (Hybrid) Preforeclosure: 772 • Auction: 1,407 • Bank Owned: 279 Source: ForeclosureRadar.com
  • Fontana: Foreclosure Mapping (Street) Preforeclosure: 772 • Auction: 1,407 • Bank Owned: 279 Source: ForeclosureRadar.com Ontario
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  • 2009 Housing Market Survey
  • Median Net Cash To Sellers 2005: $220K 2009: $50K Q. What was the net cash gain or net loss to the seller as a result of this sale? $50,000
  • Sellers Reporting a Net Cash Loss Percent of All Sellers Q. What was the net cash gain or net loss to the seller as a result of this sale? Long Run Average = 9.3%
  • Proportion of Home Sellers Planning to Repurchase Q. Is the seller planning on purchasing another home?
  • Proportion of First-Time Homebuyers California Q. Was the buyer a first-time buyer?
  • Median Price to Median HH Income Ratio
    • California
    SOURCE: California Association of REALTORS® Average Over Years Shown: 6:1 Ratio
  • Multiple Offers: Over 1/2 homes sold 2009 had multiple offers
  • Percent of Buyers with Zero Down Payment First-Time Buyers vs. Repeat Buyers 5.0% 3.7% 2.8%
  • Percent of All Cash Sales
  • Buyer Use of Property (All Homes)
  • 2010 Forecast
  • California Housing Market Outlook Source: CALIFORNIA ASSOCIATION OF REALTORS® Forecast Date: June 18, 2010
  • 2010 Survey of Homebuyers March 2010
  • Share of Distressed Sales (All Buyers) Q. Was the home you bought a regular market sale, an REO/ bank-owned property, a short sale, or other?
  • Became Aware of Home Purchased Through Agent Q. Did you become aware of the home you purchased through a real estate agent?
  • Home Buyers Who Looked at Newspaper/Magazine Ads to Search for a Home Q. Did you look at newspaper/magazine ads to search for a home?
  • More Buyers Expected Home Prices to Appreciate 2009 vs 2010 Q. Do you think home prices in your neighborhood will go up, down, or stay flat in 1 year? 5 years? 10 years? All Buyers
  • Mean = 56.6 months; Median = 60 months Time Planned to Stay at Current Home Before Selling It (All Buyers) Q. How many months do you plan to stay at your current home before selling it?
  • Down Payment As a Percent of Home Price (2010) First-Time Buyers Mean =23.1% Repeat Buyers Mean = 37.3% Q. How much did you put down as your down payment for the home purchased (in percent of the home value)?
  • Buyers Who Know the Terms of Their Loan Q. Do you know the term of your loan?
  • 2009: Mean = 8.1 Median = 9 2010: Mean = 8.5, Median = 9 Scale: “1” = very easy, “10” = very difficult Level of Difficulty to Obtain Financing (All Buyers) 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.
  • Reasons for Satisfaction with the Real Estate Agent You Used Q. Why do you have that level of satisfaction with your agent?
  • Advice for Real Estate Agents Q. What advice would you give to real estate agents to improve the process or the level of service?
  • In closing….
  • CA New Housing Permits
    • CA is not building new homes – housing shortage in our future?
    SOURCE: CBIA Household Growth: Approx 200,000/yr A drop of 83% since 2004
  •  
  • From the Bookshelf…
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  • Business Tools You Can Use May 2010
  • www.car.org  Business Tools  Market Response Center www.car.org/tools/smart
  • CUSTOMIZABLE MARKET REPORT: C.A.R. Market Snapshot® Send Your Clients the Latest Market Analysis Co-Branded with Your NAME AND CONTACT INFO!! www.car.org  Market Data  Research Publications  Market Snapshot
  • Get the Latest 411 on the Market or Economy: C.A.R. Real Estate 411 www.car.org  Market Data  Real Estate 411
    • Stay Up-To-Date on the latest 411 on the Market or Economy.
    • Answer Your Clients Questions
    • Send your Clients to a Great Resource
    • Quick easy to read format
  • www.car.org  Market Data  Speeches Speeches & Presentations The End – Thank You Follow Us on Twitter: @ssutachan
  • Thank You [email_address]