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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]