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A GOOD YEAR FOR THE CALIFORNIA HOUSING MARKET SO FAR, HOW DID WE GET THERE?
October 31, 2013
Oscar Wei, Senior Research Analyst
Sales of Existing Detached Homes• California, Sept. 2013 Sales: 412,880 Units, -3.1% YTD, -2.6% YTY
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3 -
100,000
200,000
300,000
400,000
500,000
600,000
700,000
*Sales are seasonally adjusted and annualized SERIES: Sales of Existing Single Family HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Median Price of Existing Detached Homes• California, September 2013: $428,810, Up 24.4% YTY
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3 $-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000 P: May-07$594,530
T: Feb-09$245,230-59% frompeak
SERIES: Median Price of Existing Single Family HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
CA Unsold Inventory: Nearing Record Lows• California, September 2013: 3.6 Months
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.
0
2
4
6
8
10
12
14
16
18
SERIES: Unsold Inventory Index of Existing Single Family HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
SERIES: Unsold Inventory Index of Existing Single Family HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Change in Inventory by Price Range• (Year-to-Year)
$0 - $300k $300 - $500k $500 - $750k $750 - $1000k $1000k+-30%
-20%
-10%
0%
10%
20%
30%
-26.8%
9.7%
25.6%
19.3%
14.2%
Sep-13
Supply of Inventory Remained Tight, But Continued to Improve
Equity Sales REO Sales Short Sales0
1
2
3
43.5
2.7
3.8
SERIES: Distressed Unsold Inventory IndexSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
UNSOLD INVENTORY INDEX (MONTHS)
• California: September 2013
For the 5th Month in a Row, the Supply of Distressed Sales Improved
Aug-1
1
Oct-1
1
Dec-1
1
Feb-
12
Apr-1
2
Jun-
12
Aug-1
2
Oct-1
2
Dec-1
2
Feb-
13
Apr-1
3
Jun-
13
Aug-1
30
1
2
3
4
5
6
7
8
9 Equity Sales REO Short Sales
SERIES: Distressed Months Supply of InventorySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
UNSOLD INVENTORY INDEX (MONTHS)
California Housing Market Outlook
Indicator 2008 2009 2010 2011 20122013p2014f
SFH Resales (000s) 381.4 474.9 416.5 422.6 439.4 430.3 444.0
% Change 30.4% 24.5% -12.3% 1.4% 4.0% -2.1% 3.2%
Median Price ($000s) $348.5 $275.0 $305.0 $286.0 $319.3 $408.6 $432.8
% Change -37.8% -21.1% 10.9% -6.2% 11.6% 28.0% 6.0%
30-Yr FRM 6.0% 5.0% 4.7% 4.5% 3.7% 4.1% 5.3%
1-Yr ARM 5.2% 4.7% 3.8% 3.0% 2.7% 2.7% 3.1%
SERIES: CA Housing Market OutlookSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Sales Bounce back in 2014, as Price Continues to Grow
Units (Thousand)
2005
2006
2007
2008
2009
2010
2011
2012
2013f
2014f
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
430,270444,040
Sales of Existing Detached Homes
2005
2006
2007
2008
2009
2010
2011
2012
2013f
2014f
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$408,560
$432,850
Median PricePrice
(Thousand)
SERIES: CA Housing Market OutlookSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
CA: Dollar Volume Steadily Improving Up 25.3% in 2013, Up 9.3% in 2014
2005 2006 2007 2008 2009 2010 2011 2012 2013f 2014f$0
$50
$100
$150
$200
$250
$300
$350
$400
-40%
-30%
-20%
-10%
0%
10%
20%
30%
$301
$244
$164
$133 $131 $127 $121 $140
$176 $192
$ Volume of Sales Percent Change
% Change$ in Billion
-60%
SERIES: CA Housing Market OutlookSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Methodology
• C.A.R. has conducted the Annual Housing Market Survey since 1981. The questions and methodology have stayed essentially the same throughout that time.
• The survey was sent via email to a random sample of 20,199 REALTORS® throughout California. The sample represented the geographical distribution of C.A.R. membership across the state. The survey asked REALTORS® to provide information from their most recent sales transaction that closed escrow in the second quarter of 2013.
• The survey instrument was a questionnaire with both multiple choice
and open-ended questions. There were 976 valid survey responses, equivalent to a response rate of 4.8 percent. The margin of error for this survey was +/- 3.2 percent at a 95 percent confidence level.
2005
2006
2007
2008
2009
2010
2011
2012
2013
0%
10%
20%
30%
40%
50%
60%
70%
80%
0
1
2
3
4
5
6
7
% with Multiple Offers
# of Multiple offers (Average)
Supply Shortage Creates More Market Competition• Share of home sales with multiple offers is the highest in at least the last 15 years
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
2005
2006
2007
2008
2009
2010
2011
2012
2013
0%
10%
20%
30%
40%
50%
60%
26%
50%
% of Sales above Asking Price
Long Run Average = 18%
Market Competition Leads to More Sales with Above Asking Price
2005 2006 2007 2008 2009 2010 2011 2012 20130%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
0
2
4
6
8
10
12
14
16
Med. Price Discount
Med. Weeks on MLS
0%, 1.6 weeks
Median Price Discount & Weeks on Market
2008 2009 2010 2011 2012 20130%
10%
20%
30%
40%
50%
60%
19%
46%
34%43%
30%
57%% of Sales Above Asking Price
All Equity Sales REO Short Sales
Market Competition Leads to More Sales with Above Asking Price
Equity Sales vs. REO vs. Short Sales (2013)
Equity Sales
REO Sales
Short Sales
Share of Total Sales 80.8% 4.9% 14.0%
Median Home Price $456,635 $175,500 $276,500
Square Footage 1,678 1,400 1,650
Price / SF $270 $101 $146
Sales-to-List Price Ratio 100.0% 100.0% 103.0%
% of Sales With Multiple Offers 69.0% 91.2% 75.7%
Avg. Number of Offers 5.2 7.4 7.1
% of All Cash Sales 25.2% 50.0% 35.7%
Days on MLS 10 15 14
Days in Escrow 30 35 60SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Equity Sales (2011 vs. 2012 vs. 2013)
2011 2012 2013
Share of Total Sales 58.7% 64.7% 80.8%
Median Home Price $431,000 $448,000 $456,635
Square Footage 1,783 1,750 1,678
Price / SF $250 $243 $270
Sales-to-List Price Ratio 95.9% 97.3% 100.0%% of Sales With Multiple
Offers 35.2% 50.9% 69.0%
Avg. Number of Offers 3.0 4.0 5.2
% of All Cash Sales 25.5% 27.3% 25.2
Days on MLS 67 32 10
Days in Escrow 35 35 30
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
REO Sales (2011 vs. 2012 vs. 2013)
2011 2012 2013
Share of Total Sales 19.7% 12.3% 4.9%
Median Home Price $189,500 $185,000 $175,500
Square Footage 1,500 1,500 1,400
Price / SF $112 $116 $101
Sales-to-List Price Ratio 98.0% 100.0% 100.0%
% of Sales With Multiple Offers 58.3% 70.8% 91.2%
Avg. Number of Offers 4.3 4.2 7.4
% of All Cash Sales 34.0% 43.1% 50.0%
Days on MLS 50 30 15
Days in Escrow 35 45 35
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Short Sales (2011 vs. 2012 vs. 2013)
2011 2012 2013
Share of Total Sales 20.2% 21.7% 14.0%
Median Home Price $287,000 $235,000 $276,500
Square Footage 1,600 1,600 1,650
Price / SF $175 $154 $146
Sales-to-List Price Ratio 95.9% 99.9% 103.0%
% of Sales With Multiple Offers 57.5% 66.1% 75.7%
Avg. Number of Offers 3.6 4.3 7.1
% of All Cash Sales 23.3% 26.7% 35.7%
Days on MLS 141 90 14
Days in Escrow 45 50 60SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Share of Cash Buyers decreases for the first time after 7 years of continuous Increase
0%
5%
10%
15%
20%
25%
30%
35%
27%
% of All Cash Sales
• Over a quarter of buyers paid with all cash
• The share of all cash buyers had been on the rise until this year
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Demand for Investment & Second/ Vacation Homes Rises from Last Year’s Dip
0%
5%
10%
15%
20%
25%
30%
Investment/Rental PropertyVacation/Second Home
6%
19%SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
For Those Who Purchased an Investment Property:
18%
82%
Investment to Flip
Rental Property
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
For Those Who Purchased an Investment Property:
Investment
Flip – 19% Flip – 38%
Rent – 81% Rent – 62%
REO Sales
Equity Sales
Short Sales
2012 2013
Investment
Flip – 2% Flip – 22%
Rent – 98% Rent – 78%
Investment
Flip – 20% Flip – 12%
Rent – 80% Rent – 88%
Home Buyer Profile (By Type of Sales) - 2012
Equity Sales REO Sales Short Sales
Median Age of Buyers 45 40 40
Median Household Income $120,000 $85,000 $75,000
% of First Time Buyers 30.3% 40.6% 44.9%
% of International Buyers 6.7% 3.7% 4.9%
% Bought as Investment to Flip 2.2% 4.6% 0.5%
% Bought as Investment to Rent 8.8% 19.3% 23.5%
Median Down Payment $84,000 $28,000 $23,500
% of Down Payment 20.0% 10.0% 13.0%
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Home Buyer Profile (By Type of Sales) - 2013
Equity Sales REO Sales Short Sales
Median Age of Buyers 44 50 43
Median Household Income $100,000 $60,000 $75,000
% of First Time Buyers 28.6% 19.5% 22.1%
% of International Buyers 7.8% 4.8% 10.2%
% Bought as Investment to Flip 2.0% 12.8% 8.0%
% Bought as Investment to Rent 13.8% 20.5% 27.7%
Median Down Payment $80,000 $20,000 $28,000
% of Down Payment 20.0% 10.1% 7.1%
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Home Buyer Profile (By Type of Sales) - 2013
First Time Buyer
Investors
Household Income $80,000 $100,000
% of All Cash Buyers 10.5% 65.3%
% Down Payment 10.0% 23.1%
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
More Distressed Sales Are Being Absorbed by Investors Overtime
2008 2009 2010 2011 2012 20130%
10%
20%
30%
40%
50%
60%
42%
21%25%
35%
Share of Distressed Sales Bought by First-Time BuyersShare of Distressed Sales Bought by Investment Buyers
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Share of First-Time Buyers is the Lowest Since 2006
Q. Was the buyer a first-time buyer?2005 2006 2007 2008 2009 2010 2011 2012 2013
0%
10%
20%
30%
40%
50%
28%
% First-Time Home Buyers Long Run Average
Long Run Average = 38%
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Reasons for Buying
Q. What was the single most important reason for buying the property?
Tired of Renting; 22.5%
Desired Larger Home; 16.6%
Investment/ Tax Consider-ations; 21.0%
Desired Better Lo-cation; 15.1%
Change in Family Status; 4.4%
Changed Jobs; 3.6%
Foreclosure/Short Sale/Default; 1.6%
Desired Smaller Home; 3.8%
Retirement/Move to Retirement Com-
munity; 2.6% Other; 8.8%
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Reasons For Buying First Time Homebuyers Vs. Repeat Homebuyers
Q. What was the single most important reason for selling/buying the property?
Tired of Renting
Desired Larger Home
Investment/ Tax Considerations
Desired Better Location
Change in Family Status
Changed Jobs
Foreclosure/Short Sale/Default
Desired Smaller Home
Retirement/Move to Retirement Community
Other
0% 10% 20% 30% 40% 50% 60%
Repeat Buyers First-Time Buyers
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
First-Time Buyers Bought Because They Were Tired of Renting, Highest in Three Years
Q. Was the buyer a first-time buyer?2007 2008 2009 2010 2011 2012 2013
40%
50%
60%
70%
55%
% Bought Because of Tired of Renting
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
2005 2006 2007 2008 2009 2010 2011 2012 2013$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
0%
5%
10%
15%
20%
25%
$65,000 $70,000
20%
Median Down Payment % of Down Payment to Price
Q. What was the amount of downpayment?
The Median Down Payment Up 8% from 2012, As Home Prices Continue to Increase
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Median Down PaymentFirst-Time Homebuyers Vs. Repeat Homebuyers
Q. What was the amount of downpayment?2005 2006 2007 2008 2009 2010 2011 2012 2013
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$20,500$31,420
$100,000$96,300
First-Time Buyers Repeat Buyers
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Cash Source for Down PaymentFirst-Time Buyer vs. Repeat Buyer
Q. What was the source of the cash the buyer used for a downpayment or to purchase the residence?
First-time
BuyersRepeat Buyers All Buyers
Personal saving 70.5% 55.7% 59.0%
Proceeds from sale of previous residence 0.0% 21.5% 15.7%
Borrowed or gift from relatives 13.9% 4.3% 7.0%
Sale of personal assets other than real property
2.4% 2.3% 2.3%
Inheritance 2.0% 3.0% 2.8%
Proceeds from sale or refi of another property 0.0% 3.1% 2.2%
Other 11.2% 10.1% 11.0%
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Repeat Buyers Rely on Personal Savings As Down Payment
Q. What was the source of the cash the buyer used for a down payment or to purchase the residence?
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130%
10%
20%
30%
40%
50%
60%
22%
56%
Sale of Previous Residence Savings
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
International Buyers are Getting a Bigger Slice of the Market than Last Year.
Q. Was the buyer an international buyer – a person who was a citizen of another country who wished to purchase residential real estate in the U.S.?
2008 2009 2010 2011 2012 20130%
1%
2%
3%
4%
5%
6%
7%
8%
9%
8%
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Country of International Buyer
• China (34%)
• Canada (10%)
• Mexico (15%)
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
REALTORS® Worked with International Buyers in the Past 12 Months
Q. How many properties have you sold to an international buyer in the last 12 months?
0 1 2 3 4 5+0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
71%
14%
6% 4% 2% 4%
79%
9%5% 3% 1% 3%
2013
2012
# of Properties
% Who Sold to International Buyers
# of Properties Sold to International Buyers in the Last 12 Months
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Reasons For Selling
Q. What was the single most important reason for selling the property?
Foreclosure/Short Sale/Default; 15.5%
Change in Family Status; 11.6%
Retirement/Move to Retirement Com-
munity; 9.5%
Investment/ Tax Considerations;
10.8%Desired Better Location; 11.0%
Desired Smaller Home; 6.0%
Changed Jobs; 6.3%
Desired Larger Home; 12.6%
Other; 16.7%
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
One of Six Sellers Sold Because Their Properties Were in Distressed Status
Q. What was the single most important reason for selling/buying the property?
2005 2006 2007 2008 2009 2010 2011 2012 20130%
5%
10%
15%
20%
25%
30%
35%
16%
% of Homes Sold Due to Foreclosure/Short Sale/Default
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Reasons For Selling Home (2013)Equity vs. REO vs. Short Sales
Equity Sales REO Sales Short Sales All Sales
Foreclosure/Short Sale/Default 2% 91% 74% 16%
Change in Family Status 13% 4% 5% 12%
Retirement/Move to Retirement Community 12% 0% 1% 10%
Investment/ Tax Considerations 12% 0% 1% 11%
Desired Better Location 14% 0% 2% 11%
Desired Smaller Home 7% 0% 1% 6%
Changed Jobs 7% 0% 6% 6%
Desired Larger Home 15% 0% 2% 13%
Other 18% 4% 8% 17%
Q. What was the single most important reason for selling the property?SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Seller Household FormationEquity vs. REO vs. Short Sales
Equity Sales REO Sales Short Sales
Single 25.8% 0.0% 31.6%
Married Couple with Dependents 31.2% 2.6% 38.6%
Married Couple without Dependents 26.3% 5.3% 18.4%
2 or More Individuals (Related or Unrelated) 9.0% 0.0% 7.0%
Banks/Lending Institutions 0.3% 84.2% 0.9%
Other 7.3% 7.9% 3.5%
Total 100.0% 100.0% 100.0%
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Q. What was the net cash gain or net loss to the seller as a result of this sale?
2005 2006 2007 2008 2009 2010 2011 2012 2013$0
$50,000
$100,000
$150,000
$200,000
$250,000
$55,000
After Reaching a Record Low in 2012, the Median Net Cash Gain to Sellers Bounced Back.
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Sellers with Net Cash Loss Dropped to the Lowest Level since 2007
Q. What was the net cash gain or net loss to the seller as a result of this sale?
2005 2006 2007 2008 2009 2010 2011 2012 20130%
5%
10%
15%
20%
25%
30%
35%
13.2%Long Run Average = 12.8%
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Home Seller Profile(By Type of Sales)
Equity Sales Short Sales
Median Age of Sellers 55 50
Median Household Income $100,000 $60,000
Years Seller Lived in Home 9 8
Percent of Sales with Net Cash Loss 6.2% 40.4%
Median Net Cash Gain/Net Cash Loss to Seller $80,000 $0
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
More Sellers Are Planning to Buy Another Home As the Market Slowly Recovers
Q. Is the seller planning on purchasing another home?2005 2006 2007 2008 2009 2010 2011 2012 2013
0%
10%
20%
30%
40%
50%
60%
70%
80%
49%
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
For Those Who Do Not Plan to Repurchase, Here Are Their Top 5 Reasons:
Seller prefers to have less financial obligation
Decide to live with family/friends
Seller is a lender/bank
Lack of cash for down payment
Poor credit background
0% 5% 10% 15% 20% 25%
14.4%
8.1%
15.3%
8.6%
8.8%
22.0%
7.3%
7.1%
5.5%
5.0%
2013 2012
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Reasons Sellers Not Planning to Buy Another Home(2012)
Q. Why is the seller not planning to purchase another home?
Equity Sales
REO Sales
Short Sales
Seller is lender/bank 0% 88% 3%
Seller prefers to have less financial obligation 20% 0% 12%
Poor credit background 0% 3% 31%
Lack of cash for down payment 6% 3% 17%
Out of work/unemployment 3% 0% 10%
Decide to live with family/friends 11% 0% 9%
Waiting for market to bottom 1% 0% 0%
Other 57% 6% 19%
Total 100% 100% 100%
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Reasons Sellers Not Planning to Buy Another Home (2013)
Q. Why is the seller not planning to purchase another home?
Equity Sales
REO Sales
Short Sales
Seller is lender/bank 0% 88% 5%
Seller prefers to have less financial obligation 26% 0% 18%
Poor credit background 1% 0% 19%
Lack of cash for down payment 3% 0% 18%
Out of work/unemployment 4% 0% 9%
Decide to live with family/friends 7% 0% 9%
Waiting for market to bottom 3% 4% 0%
Other 56% 8% 23%
Total 100% 100% 100%
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Top Reasons Under “Other” for Equity Sellers Not Planning to Buy Another Home
Seller Has Another Home
Moved to Retirement Facility/Nursing Home
Deceased
Change in Family Status
Inheritance
Seller Is a Builder
0% 2% 4% 6% 8% 10% 12% 14%
13.2%
7.6%
4.5%
3.4%
2.8%
2.0%
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Location of Seller’s New Home
2005
2006
2007
2008
2009
2010
2011
2012
2013
Within the same county 38% 41% 37% 45% 47% 42% 49% 49% 46%
In another county in California 23% 18% 24% 17% 21% 21% 19% 18% 20%
In another state 31% 28% 29% 27% 19% 20% 20% 22% 19%
Out of US 1% 2% 1% 1% 2% 1% 1% 1% 0%
Don't Know/Not sure 7% 11% 9% 10% 12% 16% 10% 10% 15%
Total 100% 100% 100% 100% 100% 100% 100% 100%
100%
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Buyers Have More “Skin” in the Game
2006 2012 2013
% of buyers with 20% or more down payment
43.2% 54.4% 52.2%
% of buyers with zero down payment
21.1% 4.6% 5.9%
% of cash buyers 11.0% 29.6% 27.4%
% of home buyers with a second mortgage
43.4% 1.8% 2.2%
% of buyer with ARM 32.6% 3.5% 4.0%
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130%
10%
20%
30%
40%
50%
5.9%
7.9%
5.1%
All Hombuyers First-Time Buyers Repeat Buyers
Percent of Buyers with Zero Down Payment
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Proportion of Transactions With Second Mortgages
Q. In addition to the first mortgage or assumption, was there a second mortgage?
2005 2006 2007 2008 2009 2010 2011 2012 20130%
10%
20%
30%
40%
50%
2%
Percent of Home Sales with Second Mortgage
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Percent of Buyers with Second Mortgage
2005 2006 2007 2008 2009 2010 2011 2012 20130%
10%
20%
30%
40%
50%
60%
70% First-Time Buyers Repeat Buyers
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Q. Please indicate the type of mortgage.
Share of FHA Still Significantly Higher than 2007, But Was the Lowest in 6 Years (First Mortgage)
2005 2006 2007 2008 2009 2010 2011 2012 20130%
10%
20%
30%
40%
17%
6%
FHA VA
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Less Likelihood to Default as Monthly Payment Is More Affordable
2006 2012 2013
Average mortgage rate (FRM) 6.4% 3.7% 3.8%
Median home price for existing single-family homes
$556,430 $319,310 $408,600
Median household income for home buyers
$100,000 $100,000 $100,000
Housing Affordability Index 12.0% 51.0% 36.0%
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Mortgage Rates • January 2009 – October 2013
2009
/01
2009
/04
2009
/07
2009
/10
2010
/01
2010
/04
2010
/07
2010
/10
2011
/01
2011
/04
2011
/07
2011
/10
2012
/01
2012
/04
2012
/07
2012
/10
2013
/01
2013
/04
2013
/07
09.0
5.13
09.2
6.13
0%
1%
2%
3%
4%
5%
6%
FRMARM
MONTHLY WEEKLY
SERIES: 30Yr FRM, 1Yr ARMSOURCE: Federal Home Loan Mortgage Corporation
Housing Affordability Hit by Mortgage Rate and Price Gains But Still Attractive
0%
10%
20%
30%
40%
50%
60%
70%
80%
36%
60%
CA US% OF HOUSEHOLDS THAT CAN BUY
SERIES: Housing Affordability Index of Traditional BuyersSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
House Payment Is Significantly Below What It was at the Peak
Jan-80Feb-80Mar-80Apr-80May-80Jun-80Jul-80Aug-80Sep-80Oct-80Nov-80Dec-80Jan-81Feb-81Mar-81Apr-81May-81Jun-81Jul-81Aug-81Sep-81Oct-81Nov-81Dec-81Jan-82Feb-82Mar-82Apr-82May-82Jun-82Jul-82Aug-82Sep-82Oct-82Nov-82Dec-82Jan-83Feb-83Mar-83Apr-83May-83Jun-83Jul-83Aug-83Sep-83Oct-83Nov-83Dec-83Jan-84Feb-84Mar-84Apr-84May-84Jun-84Jul-84Aug-84Sep-84Oct-84Nov-84Dec-84Jan-85Feb-85Mar-85Apr-85May-85Jun-85Jul-85Aug-85Sep-85Oct-85Nov-85Dec-85Jan-86Feb-86Mar-86Apr-86May-86Jun-86Jul-86Aug-86Sep-86Oct-86Nov-86Dec-86Jan-87Feb-87Mar-87Apr-87May-87Jun-87Jul-87Aug-87Sep-87Oct-87Nov-87Dec-87Jan-88Feb-88Mar-88Apr-88May-88Jun-88Jul-88Aug-88Sep-88Oct-88Nov-88Dec-88Jan-89Feb-89Mar-89Apr-89May-89Jun-89Jul-89Aug-89Sep-89Oct-89Nov-89Dec-89Jan-90Feb-90Mar-90Apr-90May-90Jun-90Jul-90Aug-90Sep-90Oct-90Nov-90Dec-90Jan-91Feb-91Mar-91Apr-91May-91Jun-91Jul-91Aug-91Sep-91Oct-91Nov-91Dec-91Jan-92Feb-92Mar-92Apr-92May-92Jun-92Jul-92Aug-92Sep-92Oct-92Nov-92Dec-92Jan-93Feb-93Mar-93Apr-93May-93Jun-93Jul-93Aug-93Sep-93Oct-93Nov-93Dec-93Jan-94Feb-94Mar-94Apr-94May-94Jun-94Jul-94Aug-94Sep-94Oct-94Nov-94Dec-94Jan-95Feb-95Mar-95Apr-95May-95Jun-95Jul-95Aug-95Sep-95Oct-95Nov-95Dec-95Jan-96Feb-96Mar-96Apr-96May-96Jun-96Jul-96Aug-96Sep-96Oct-96Nov-96Dec-96Jan-97Feb-97Mar-97Apr-97May-97Jun-97Jul-97Aug-97Sep-97Oct-97Nov-97Dec-97Jan-98Feb-98Mar-98Apr-98May-98Jun-98Jul-98Aug-98Sep-98Oct-98Nov-98Dec-98Jan-99Feb-99Mar-99Apr-99May-99Jun-99Jul-99Aug-99Sep-99Oct-99Nov-99Dec-99Jan-00Feb-00Mar-00Apr-00May-00Jun-00Jul-00Aug-00Sep-00Oct-00Nov-00Dec-00Jan-01Feb-01Mar-01Apr-01May-01Jun-01Jul-01Aug-01Sep-01Oct-01Nov-01Dec-01Jan-02Feb-02Mar-02Apr-02May-02Jun-02Jul-02Aug-02Sep-02Oct-02Nov-02Dec-02Jan-03Feb-03Mar-03Apr-03May-03Jun-03Jul-03Aug-03Sep-03Oct-03Nov-03Dec-03Jan-04Feb-04Mar-04Apr-04May-04Jun-04Jul-04Aug-04Sep-04Oct-04Nov-04Dec-04Jan-05Feb-05Mar-05Apr-05May-05Jun-05Jul-05Aug-05Sep-05Oct-05Nov-05Dec-052006 Q12006 Q22006 Q32006 Q42007 Q12007 Q22007 Q32007 Q42008 Q12008 Q22008 Q32008 Q42009 Q12009 Q22009 Q32009 Q42010 Q12010 Q22010 Q32010 Q42011 Q12011 Q22011 Q32011 Q42012 Q12012 Q22012 Q32012 Q42013 Q12013 Q2 $-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
PITI/Month
Peak: $3,668/mo (2007 Q2)
Latest: $1,998/mo (2013 Q2)
… And Minimum Qualifying Income Is More Than 40% Below the Peak
Jan-80Feb-80Mar-80Apr-80May-80Jun-80Jul-80Aug-80Sep-80Oct-80Nov-80Dec-80Jan-81Feb-81Mar-81Apr-81May-81Jun-81Jul-81Aug-81Sep-81Oct-81Nov-81Dec-81Jan-82Feb-82Mar-82Apr-82May-82Jun-82Jul-82Aug-82Sep-82Oct-82Nov-82Dec-82Jan-83Feb-83Mar-83Apr-83May-83Jun-83Jul-83Aug-83Sep-83Oct-83Nov-83Dec-83Jan-84Feb-84Mar-84Apr-84May-84Jun-84Jul-84Aug-84Sep-84Oct-84Nov-84Dec-84Jan-85Feb-85Mar-85Apr-85May-85Jun-85Jul-85Aug-85Sep-85Oct-85Nov-85Dec-85Jan-86Feb-86Mar-86Apr-86May-86Jun-86Jul-86Aug-86Sep-86Oct-86Nov-86Dec-86Jan-87Feb-87Mar-87Apr-87May-87Jun-87Jul-87Aug-87Sep-87Oct-87Nov-87Dec-87Jan-88Feb-88Mar-88Apr-88May-88Jun-88Jul-88Aug-88Sep-88Oct-88Nov-88Dec-88Jan-89Feb-89Mar-89Apr-89May-89Jun-89Jul-89Aug-89Sep-89Oct-89Nov-89Dec-89Jan-90Feb-90Mar-90Apr-90May-90Jun-90Jul-90Aug-90Sep-90Oct-90Nov-90Dec-90Jan-91Feb-91Mar-91Apr-91May-91Jun-91Jul-91Aug-91Sep-91Oct-91Nov-91Dec-91Jan-92Feb-92Mar-92Apr-92May-92Jun-92Jul-92Aug-92Sep-92Oct-92Nov-92Dec-92Jan-93Feb-93Mar-93Apr-93May-93Jun-93Jul-93Aug-93Sep-93Oct-93Nov-93Dec-93Jan-94Feb-94Mar-94Apr-94May-94Jun-94Jul-94Aug-94Sep-94Oct-94Nov-94Dec-94Jan-95Feb-95Mar-95Apr-95May-95Jun-95Jul-95Aug-95Sep-95Oct-95Nov-95Dec-95Jan-96Feb-96Mar-96Apr-96May-96Jun-96Jul-96Aug-96Sep-96Oct-96Nov-96Dec-96Jan-97Feb-97Mar-97Apr-97May-97Jun-97Jul-97Aug-97Sep-97Oct-97Nov-97Dec-97Jan-98Feb-98Mar-98Apr-98May-98Jun-98Jul-98Aug-98Sep-98Oct-98Nov-98Dec-98Jan-99Feb-99Mar-99Apr-99May-99Jun-99Jul-99Aug-99Sep-99Oct-99Nov-99Dec-99Jan-00Feb-00Mar-00Apr-00May-00Jun-00Jul-00Aug-00Sep-00Oct-00Nov-00Dec-00Jan-01Feb-01Mar-01Apr-01May-01Jun-01Jul-01Aug-01Sep-01Oct-01Nov-01Dec-01Jan-02Feb-02Mar-02Apr-02May-02Jun-02Jul-02Aug-02Sep-02Oct-02Nov-02Dec-02Jan-03Feb-03Mar-03Apr-03May-03Jun-03Jul-03Aug-03Sep-03Oct-03Nov-03Dec-03Jan-04Feb-04Mar-04Apr-04May-04Jun-04Jul-04Aug-04Sep-04Oct-04Nov-04Dec-04Jan-05Feb-05Mar-05Apr-05May-05Jun-05Jul-05Aug-05Sep-05Oct-05Nov-05Dec-052006 Q12006 Q22006 Q32006 Q42007 Q12007 Q22007 Q32007 Q42008 Q12008 Q22008 Q32008 Q42009 Q12009 Q22009 Q32009 Q42010 Q12010 Q22010 Q32010 Q42011 Q12011 Q22011 Q32011 Q42012 Q12012 Q22012 Q32012 Q42013 Q12013 Q2 $-
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Min. Income
Peak: $146,701/yr (2007 Q2)
Latest: $79,914/yr (2013 Q2)
CA Median Monthly Mortgage Payment
What Will Happen When Mortgage Rates Increase?
3.00% 3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 6.50%$0
$400
$800
$1,200
$1,600
$2,000
$1,402$1,494
$1,588$1,685
$1,786$1,889
$1,994 $2,102Q2-2013 Median Price $415,770
20% Downpayment
INTEREST RATE
MONTHLY MORTGAGE
SERIES: Housing Affordability IndexSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
CA Minimum Qualifying IncomeWhat Will Happen When Mortgage Rates
Increase?
3.00% 3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 6.50%$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$75,218$78,869
$82,644 $86,538$90,548
$94,668$98,893 $103,220
Q2-2013 Median Price $415,770
20% Downpayment
INTEREST RATE
MONTHLY MORTGAGE
SERIES: Housing Affordability IndexSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
CA Housing Affordability Index What Will Happen When Mortgage Rates
Increase?
3.00% 3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 6.50%0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
39%37%
35%33% 31% 29%
27%25%
Q2-2013 Median Price $415,770
20% Downpayment
INTEREST RATE
% OF HOUSEHOLDS THAT CAN BUY, ALL ELSE CONSTANT
SERIES: Housing Affordability IndexSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
2014: Many Market Opportunities
• First-time Buyers• Formerly “Underwater” Homeowners• Property Management • International Clients
How Client Found Their Agent
Q. How did your client find and select you to represent them?
Referral from a clientRepresented Them in Previous Home Transaction
Client was Friend/Relative/NeighborRecommendations of Friends
Referral from Business AssociatesWeb page/Internet/Socia Media
Open HouseWalk in /Floor Call
Yard SignsDoor-to-Door Farming
Listing Agent for Home PurchasedRelocation Referral
Print Ads/Newspaper & MagazineDirect Mail MarketingTelephone Marketing
Other
0% 4% 8% 12%
16%
20%
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Real Estate Symposium
November 13, 20139 AM – 4 PMSkirball Cultural CenterLos Angeles, CAcar.org/MarketData/REVoices
SPEAKERSChief Economists of:
Other Organizations:
Next Webinar
California's Future Home Buyers--What You Need to Know to Convert Renters into
Buyers
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To register, visit car.org/MarketData
For more information:http://www.facebook.com/CARResearchgroup
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