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2016 CALIFORNIA ECONOMIC & MARKET FORECAST
October 19, 2015Deasy /Penner & Partners
Leslie Appleton-Young, Vice President & Chief Economist
2015 FORECAST REPORT CARD
Forecast Date: October 2015 vs. October 2014SERIES: CA Housing Market OutlookSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
SFH Resales (000s)
% Change
Median Price ($000s)
% Change
30-Yr FRM
Housing Affordability Index
U.S. Gross Domestic Product
2014 Actual
383.3
-7.6%
$447.0
9.8%
4.2%
30%
2.4%
2015 Forecast
402.5
5.8%
$478.7
5.2%
4.5%
27%
3.0%
2015 Projected
407.5
6.3%
$476.3
6.5%
3.9%
31%
2.4%
2016 FORECAST
2010 2011 2012 2013 2014 2015p 2016f
SFH Resales (000s) 416.5 422.6 439.8 414.9 383.3 407.5 433.0
% Change -12.3% 1.4% 4.1% -5.9% -7.6% 6.3% 6.3%
Median Price ($000s) $305.0 $286.0 $319.3 $407.2 $447.0 $476.3 $491.3
% Change 10.9% -6.2% 11.6% 27.5% 9.8% 6.5% 3.2%Housing Affordability Index 48% 53% 51% 36% 30% 31% 27%
30-Yr FRM 4.7% 4.5% 3.7% 4.0% 4.2% 3.9% 4.5%DATE: September 2015 SERIES: CA Housing Market Outlook SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
• U.S. is under-performing– Job-growth is slowing– Q3 Earnings reports disappointing– Consumers buying – selectively– Low oil prices help – and hurt– Strong dollar hurting exports
• Fed meets October 27-28 & December 15-16– Don’t expect hike in rates until March 2016
• China is slowing: 6.9% growth in 3rd quarter – Lowest since 2009
LATEST ECONOMIC NEWS
• Oprah likes Weight Watchers – buys 10%– Stock soars 37% on news– Wrestling with how to remain relevant
• Soul Cycle IPO – Who will win: Leslie or Joel?– “ aspirational lifestyle brand"
TRENDING… BOOMERS VS MILLENIALS
-5%
-4%
-3%
-1%
0%
1%
3%
4%
5%
20052006200720082009201020112012201320142015P2016FQ1-12Q2-12Q3-12Q4-12Q1-13Q2-13Q3-13Q4-13Q1-14Q2-14Q3-14Q4-14Q1-15Q2-15
ECONOMY HAS BEEN GROWING FOR 68 MONTHS
2014: 2.4%; 2015: 2.4%; 2016: 2.7% ANNUAL PERCENT CHANGE, CHAIN-TYPE (2005) $
ANNUALLY QUARTERLY
2009 Largest Annual Drop since 1938 (-3.4%)
SERIES: GDP SOURCE: US Dept. of Commerce, Bureau of Economic Analysis
3.9%
EMPLOYMENT STALLED IN SEPT:142K
-7
-5.25
-3.5
-1.75
0
1.75
3.5
5.25
1/1/05 9/1/06 5/1/08 1/1/10 9/1/11 5/1/13 1/1/15
California USANNUAL PERCENT CHANGE
SERIES: Total Nonfarm Employment SOURCE: US Bureau of Labor Statistics, CA Employment Development Division
Change Growth
United States 2,752,000 2.0%
California 470,000 3.0%
New York 130,500 1.4%
Texas 217,700 1.9%
198K/mo 2015 avg260K/mo 2014 avg
UNEMPLOYMENT RATE HOLDS STEADY
September 2015: US 5.1% & August 2015:CA 6.1%
-8%
0%
8%
15%
23%
30%
1/1/059/1/065/1/081/1/109/1/115/1/131/1/15
CA US US-CA
SERIES: Unemployment Rate The U-6 rate covers the unemployed, underemployed and those who are not looking but who want a jobSOURCE: US Bureau of Labor Statistics, CA Employment Development Division
JOB TRENDS BY CALIFORNIA METRO AREA
San JoseSan Francisco
Orange CountySan Diego
Inland EmpireSacramentoFresno MSA
Stockton MSAOakland
Los AngelesModestoVentura
Bakersfield
-1.5% 0.0% 1.5% 3.0% 4.5% 6.0%
-0.2%0.9%1.0%
1.8%1.9%2.0%
2.6%2.8%
3.0%3.1%3.2%
4.6%5.5%
SERIES: Total Nonfarm Employment SOURCE: CA Employment Development Division
ANNUAL PERCENT CHANGE
August 2015: CA +3.0%, +470,000
CALIFORNIA JOB CHANGES BY INDUSTRY
Professional, Scientific & Technical ServicesConstruction
Leisure & HospitalityTransportation, Warehousing & Utilities
Admistrative & Support & Waste ServicesReal Estate & Rental & Leasing
Wholesale TradeHealth Care & Social Assistance
InformationEducational Services
Retail TradeGovernment
Durable GoodsFinance & InsuranceNondurable Goods
-2% 0% 2% 4% 5% 7%-1.0%
0.4%
0.5%
1.3%
2.0%
2.0%
2.6%
2.7%
3.0%
3.5%
3.5%
3.6%
4.3%
6.4%
6.8%
SERIES: Total Nonfarm Employment By Industry SOURCE: US Bureau of Labor Statistics, CA Employment Development Division
August 2015: CA +3.0%, +470,000ANNUAL PERCENT CHANGE
CA METRO COMMERCIAL VACANCY RATES
2015 Q2
SOURCE: National Association of REALTORS®
MSA Office Industrial Retail Multi-Family
Los Angeles 14.8% 3.6% 5.7% 3.5%
Oakland-East Bay 17.1% 8.2% 6.0% 2.8%
Orange County 16.3% 3.4% 4.6% 3.3%
Sacramento 20.3% 11.1% 10.0% 2.6%
San Bernardino/Riverside 22.4% 7.2% 9.1% 2.5%
San Diego 14.7% 6.4% 6.1% 2.8%
San Francisco 10.6% 10.4% 3.0% 3.8%
San Jose 16.3% 16.2% 4.6% 3.4%
Ventura 16.4% - 8.5% 2.9%
NONFARM EMPLOYMENT BY REGION
Aug 2015 Aug 2014 Change % Change
Southern California 8,834.4 8,626.3 208.1 2.4%
Bay Area 4,289.3 4,213.0 76.3 1.8%
Central Valley 1,540.9 1,492.4 48.5 3.2%
Central Coast 1,318.4 1,280.0 38.4 3.0%
North Central 1,391.4 1,349.0 42.4 3.1%
CALIFORNIA 294.4 291.9 2.5 0.9%
Nonfarm Employment (Thousands)
SERIES: Total Nonfarm Employment SOURCE: CA Employment Development Division
CONSUMER PRICE INDEX
August 2015: All Items 0.2% YTY; Core +1.8% YTY
-3%
-2%
0%
2%
3%
5%
6%
1/1/055/1/079/1/091/1/125/1/14
All Items CoreANNUAL PERCENT CHANGE
SERIES: Consumer Price Index SOURCE: US Bureau of Labor Statistics
MORTGAGE RATES
January 2009 – October 2015
0%
2%
3%
5%
6%
2009/012009/052009/092010/012010/052010/092011/012011/052011/092012/012012/052012/092013/012013/052013/092014/012014/052014/092015/012015/0508.27.1509.24.15
FRMARM
MONTHLY WEEKLY
SERIES: 30Yr FRM, 1Yr ARM SOURCE: Federal Home Loan Mortgage Corporation
U.S. HOME SALES UP IN 2015U.S., Aug 2015 Sales: 4,690,000 Units, +8.1% YTD, +6.1% YTY
00
1,750,000
3,500,000
5,250,000
7,000,000
3835338384384123844338473385043853438565385963862638657386873871838749387773880838838388693889938930389613899139022390523908339114391423917339203392343926439295393263935639387394173944839479395083953939569396003963039661396923972239753397833981439845398733990439934399653999540026400574008740118401484017940210402384026940299403304036040391404224045240483405134054440575406034063440664406954072540756407874081740848408784090940940409694100041030410614109141122411534118341214412444127541306413344136541395414264145641487415184154841579416094164041671416994173041760417914182141852418834191341944419744200542036420644209542125421564218642217
4,690,000
*Sales are seasonally adjusted and annualized SERIES: Sales of Existing Single Family Homes SOURCE: NATIONAL ASSOCIATION OF REALTORS®
U.S. HOME PRICE GAINS MODERATING
U.S., Aug 2015: $230,200, -1.4% MTM, +5.1% YTY
00
$ 60,000
$ 120,000
$ 180,000
$ 240,000
Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15
SERIES: Median Price of Existing Single Family HomesSOURCE: NATIONAL ASSOCIATION OF REALTORS®
U.S. HOUSING MARKET OUTLOOK
2010 2011 2012 2013 2014 2015p 2016f
Existing Home Sales (000s) 4,190 4,260 4,660 5,090 4,940 5,292 5,471
% Change -3.5% 1.7% 9.4% 9.2% -2.9% 7.1% 3.4%
Median Price ($000s) $172.9 $166.1 $176.8 $197.1 $208.3 $221.4 $231.0
% Change 0.2% -3.9% 6.4% 11.5% 5.7% 6.3% 4.3%
SERIES: U.S. Existing home sales of single-family homes and condo/coops SOURCE: NATIONAL ASSOCIATION OF REALTORS®
U.S. ECONOMIC OUTLOOK
2010 2011 2012 2013 2014 2015p 2016f
US GDP 2.4% 1.8% 2.3% 2.2% 2.4% 2.4% 2.7%
Nonfarm Job Growth -0.7% 1.2% 1.7% 1.7% 1.9% 2.1% 1.8%
Unemployment 9.6% 8.9% 8.1% 7.4% 6.2% 5.3% 5.0%
CPI 1.6% 3.1% 2.1% 1.5% 1.6% 0.2% 2.1%Real Disposable Income, % Change 1.0% 2.5% 3.0% -0.2% 2.5% 3.3% 2.7%
30-Yr FRM 4.7% 4.5% 3.7% 4.0% 4.2% 3.9% 4.5%
SERIES: U.S. Economic Outlook SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
CALIFORNIA ECONOMIC OUTLOOK
2010 2011 2012 2013 2014 2015p 2016f
Nonfarm Job Growth -1.1% 1.1% 2.4% 3.0% 2.2% 2.8% 2.3%
Unemployment Rate 12.3% 11.8% 10.4% 8.9% 7.5% 6.3% 5.5%
Population Growth 0.7% 0.7% 0.7% 0.9% 0.9% 0.9% 0.9%Real Disposable Income, % Change 0.9% 3.4% 4.7% 0.2% 3.0% 4.3% 4.5%
SERIES: CA Economic Outlook SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
C.A.R. MEMBERSHIP FOLLOWS SALES WITH 1-2 YEAR LAG
55,000
110,000
165,000
220,000
0
150,000
300,000
450,000
600,000
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
p
Membership Home SalesUnits of Home Sold # of Members
SALES OF EXISTING DETACHED HOMESCalifornia, Sep 2015 Sales: 425,030 Units, +7.3% YTD, +6.9% YTY
00
175,000
350,000
525,000
700,000
383533838438412384433847338504385343856538596386263865738687387183874938777388083883838869388993893038961389913902239052390833911439142391733920339234392643929539326393563938739417394483947939508395393956939600396303966139692397223975339783398143984539873399043993439965399954002640057400874011840148401794021040238402694029940330403604039140422404524048340513405444057540603406344066440695407254075640787408174084840878409094094040969410004103041061410914112241153411834121441244412754130641334413654139541426414564148741518415484157941609416404167141699417304176041791418214185241883419134194441974420054203642064420954212542156421864221742248
*Sales are seasonally adjusted and annualized SERIES: Sales of Existing Single Family Homes SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Sep-15: 425,030
Sep-14: 397,490
MEDIAN PRICE OF EXISTING DETACHED HOMES
California, Sep 2015: $482,150, -2.3% MTM, +4.3% YTY
00
$ 150,000
$ 300,000
$ 450,000
$ 600,000
383533838438412384433847338504385343856538596386263865738687387183874938777388083883838869388993893038961389913902239052390833911439142391733920339234392643929539326393563938739417394483947939508395393956939600396303966139692397223975339783398143984539873399043993439965399954002640057400874011840148401794021040238402694029940330403604039140422404524048340513405444057540603406344066440695407254075640787408174084840878409094094040969410004103041061410914112241153411834121441244412754130641334413654139541426414564148741518415484157941609416404167141699417304176041791418214185241883419134194441974420054203642064420954212542156421864221742248
P: May-07$594,530
T: Feb-09$245,230-59% frompeak
SERIES: Median Price of Existing Single Family HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Sep-15: $482,150Sep-14:
$462,380
-25%
-13%
0%
13%
25%
38%
50%
1/1/1010/1/107/1/11 4/1/12 1/1/1310/1/137/1/14 4/1/15
Condo Single-Family Homes
HOME PRICE APPRECIATIONS HAVE MODERATED SINCE MID 2013
SERIES: Sales of SFH and Condo Units SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
YTY% Chg. in Price
PRICE PER SQUARE FOOT
Sep 2015: $236, Up 0.3% MTM, Up 2.5% YTY
$0
$100
$200
$300
$400
1/1/07 9/1/07 5/1/08 1/1/09 9/1/09 5/1/10 1/1/11 9/1/11 5/1/12 1/1/13 9/1/13 5/1/14 1/1/15 9/1/15
PRICE PER SQ. FT.
SERIES: Median Price Per Square Feet SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
CALIFORNIA VS. U.S. MEDIAN PRICES
1970-2015
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
00
$ 150,000
$ 300,000
$ 450,000
$ 600,000
1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015P
California US
SERIES: Median Price of Existing Single Family HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
• Housing market has recovered – Welcome to the new normal – Low mortgage rates– Job & Income growth are positive
• And yet…– Supply well below long-run average– Share of first-time buyers LOW– Affordability key concern for everyone
• It’s not an easy market/transaction for anyone .
2015 - WHERE ARE WE ?
INVENTORY CONTINUED TO DECLINE FROM LAST YEAR
Sep 2014: 4.2 Months; Sep 2015: 3.7 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
4.5
9
13.5
18
1/1/05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
SERIES: Unsold Inventory Index of Existing Single Family Homes SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
DEMAND OUTPACING SUPPLY
-11%
-7%
-4%
0%
4%
7%
11%
14%
San Francisco Bay Area Southern California Central Valley
-4.4%
-7.4%-6.2%
13.4%
10.4%
-0.0%
Sales Active ListingsYear-to-Year % Chg
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Sep 2015
HOUSING DEMAND OUTPACED SUPPLY IN THE BAY AREA
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
Alamed
a
Contra
Costa
Marin
Napa
San Fr
ancisco
San M
ateo
Santa
Clara
Solan
o
Sono
ma
San Fr
ancisco
Bay A
rea
-6.2%
7.2%
-22.5%
3.2%
-4.3%
-39.8%
5.4%
-17.1%
-4.6%-3.9%-0.0%
-8.8%
17.4%
4.1%
-3.9%
-19.5%
27.1%
-2.2%
2.7%
-4.7%
Sales Active ListingsYear-to-Year % Chg
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Sep 2015
HOUSING DEMAND OUTPACED SUPPLY IN SO CAL
-20%
-10%
0%
10%
20%
30%
40%
Los A
ngeles
Orange
County
Rivers
ide Cou
nty
San Be
rnardi
no
San D
iego
Ventu
ra
Santa
Barbar
a
South
ern Calif
ornia
-7.4%
2.9%
-6.8%
-14.8%
-4.0%-3.3%-4.2%-8.7%
10.4%
2.6%
34.7%
4.8%9.2%10.4%
13.8%9.6%
Sales Active ListingsYear-to-Year % Chg
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Sep 2015
WHERE IS THE INVENTORY?
– Affordability challenge for repeat buyers• Low rate on current mortgage • Low property taxes• Concerned with capital gains• Why list when there is nowhere to go I can afford?• Could not qualify for a mortgage today
– Foreclosure pipeline is dry – Investors renting instead of flipping– New construction recovering but LOW– Demographics: Trade-up buyer pool is smaller– Measurement error? Off- MLS (aka “pocket’) listings not
being counted in listing stats
LOS ANGELES COUNTYPreforeclosure: 5,480 • Auction: 3,926 • Bank Owned: 5,200
SOURCE: PropertyRadar on 10/02/15
LOS ANGELES COUNTYPreforeclosure: 5,480 • Auction: 3,926 • Bank Owned: 5,200
SOURCE: PropertyRadar on 10/02/15
LOS ANGELES COUNTYPreforeclosure: 5,480 • Auction: 3,926 • Bank Owned: 5,200
SOURCE: PropertyRadar on 10/02/15
SALES OF RESIDENTIAL HOMES
Pasadena, September 2015: 143 Units Down 3.4% MTM, Up 11.7% YTY
SOURCE: Clarus Market Metrics
MEDIAN PRICE OF RESIDENTIAL HOMES
Pasadena, September 2015: $675,000Down 3.6% MTM, Down 0.7% YTY
SOURCE: Clarus Market Metrics
FOR SALE PROPERTIES
Pasadena, September 2015: 589 Units Down 0.5% MTM, Down 3.4% YTY
SOURCE: Clarus Market Metrics
Note: “For Sale Properties” represents the overall supply that exist throughout the entire month, including any listings that appear as “Active” any point in time during the month.
MONTH’S SUPPLY OF INVENTORY
Pasadena, September 2015: 2.6 Months
SOURCE: Clarus Market Metrics
Note: “Month’s Supply of Inventory” 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 “For Sale” on the last day of the month in question. The inventory figure is then divided by the number of properties that went Under Contract during the month.
SALES OF RESIDENTIAL HOMES
South Pasadena, September 2015: 22 Units Down 12.0% MTM, Up 57.1% YTY
SOURCE: Clarus Market Metrics
MEDIAN PRICE OF RESIDENTIAL HOMES
South Pasadena, September 2015: $1,133,500Up 2.3% MTM, Up 36.3% YTY
SOURCE: Clarus Market Metrics
FOR SALE PROPERTIES
South Pasadena, September 2015: 54 UnitsDown 15.6% MTM, Down 31.6% YTY
SOURCE: Clarus Market Metrics
Note: “For Sale Properties” represents the overall supply that exist throughout the entire month, including any listings that appear as “Active” any point in time during the month.
MONTH’S SUPPLY OF INVENTORY
South Pasadena, September 2015: 1.2 Months
Note: “Month’s Supply of Inventory” 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 “For Sale” on the last day of the month in question. The inventory figure is then divided by the number of properties that went Under Contract during the month.
SOURCE: Clarus Market Metrics
SALES OF RESIDENTIAL HOMES
San Marino, September 2015: 6 Units Down 57.1% MTM, Down 50.0% YTY
SOURCE: Clarus Market Metrics
MEDIAN PRICE OF RESIDENTIAL HOMES
San Marino, September 2015: $2,209,000Up 4.4% MTM, Down 17.4% YTY
SOURCE: Clarus Market Metrics
FOR SALE PROPERTIES
San Marino, September 2015: 61 UnitsDown 9.0% MTM, Down 22.8% YTY
Note: “For Sale Properties” represents the overall supply that exist throughout the entire month, including any listings that appear as “Active” any point in time during the month.
SOURCE: Clarus Market Metrics
MONTH’S SUPPLY OF INVENTORY
San Marino, September 2015: 5.2 Months
Note: “Month’s Supply of Inventory” 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 “For Sale” on the last day of the month in question. The inventory figure is then divided by the number of properties that went Under Contract during the month.
SOURCE: Clarus Market Metrics
MARKET COMPETITION COOLS DOWN AFTER PEAKING IN 2013
0
1.5
3
4.5
6
0%
20%
40%
60%
80%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
% with Multiple Offers # of Multiple offers (Average)
SERIES: 2015 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
FIRST-TIME BUYERS FINDING IT HARD TO BUY
0%
12%
24%
36%
48%
2005 2007 2009 2011 2013 2015
% First-Time Home BuyersLong Run Average
Long Run Average = 38%
SERIES: 2015 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
SHARE OF CASH BUYERS LOWEST SINCE 2009
% of All Cash Sales
0%
8%
15%
23%
30%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
21%22%
27%30%
27%
23%
20%21%22%
27%30%
26.80%
23.20%
19.60%18.50%
12.60%11.00%10.80%
• Almost one-fourth of buyers paid with all cash
• The share of all cash buyers is the lowest in the last 6 years
SERIES: 2015 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
SHARE OF INVESTMENT PROPERTIES DROPS TO THE LOWEST LEVEL SINCE 2009
SERIES: 2015 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
0%
5%
10%
15%
20%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
% to Total Sales
SHARE OF SECOND/ VACATION HOMES HIGHER AFTER TWO YEARS’ OF DECLINE
SERIES: 2015 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
0%
2%
4%
6%
8%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
% to Total Sales
YEARS OWNED HOME BEFORE SELLINGAll Sellers
0
3
5
8
10
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
SERIES: 2015 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
BOOMERS – BORN BETWEEN 1946-1964
What is your age?SERIES: 2014 Baby Boomer Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Average: 59
MAJORITY ARE MARRIED
What is your marital status?
Other18%
Single26%
Married56%
SERIES: 2014 Baby Boomer Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
BABY BOOMERS LESS DIVERSE THAN MILLENNIALS
What is your ethnic background?
Boomers Millennials
SERIES: 2014 Baby Boomer Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
3/4 BABY BOOMERS ARE HOME OWNERS
What is your current living situation?
Other3%
Rent22%
Own75%
SERIES: 2014 Baby Boomer Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
MOST HAVE EQUITY IN THEIR HOME
Do you have equity in your home?
No8%
Yes92%
SERIES: 2014 Baby Boomer Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
MAJORITY DO NOT PLAN TO SELL HOME WHEN THEY RETIRE
Do you plan to sell your current home when you retire?
Don't know/ unsure32%
No58%
Yes10%
SERIES: 2014 Baby Boomer Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
MAJORITY WON’T SELL BECAUSE THEY LIKE THEIR HOME
Why do you not plan to sell your current home when you retire?
5%8%
10%
77%
I like my homeI cannot afford to buy another retirement homeI plan to give the home to my child(ren)Another reason
SERIES: 2014 Baby Boomer Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
¼ POSTPONED RETIREMENT BECAUSE …
Did you have to postpone your date of retirement due to any of the following? SERIES: 2014 Baby Boomer Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
> ½ DO NOT FEEL THEY HAVE SAVED ENOUGH MONEY TO RETIRE COMFORTABLY
Do you feel you have saved enough money to retire comfortably?
No54%
Yes46%
SERIES: 2014 Baby Boomer Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
MAJORITY WORRY ABOUT CHILDRENS’ ABILITY TO BECOME HOME OWNERS
Do you worry about your children’s ability to become home owners in the future?
No45%
Yes55%
SERIES: 2014 Baby Boomer Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
2/5 PLAN TO HELP CHILDREN WITH DOWN PAYMENT
Do you plan to help your children with their down payment to purchase a home?
No57%
Yes43%
SERIES: 2014 Baby Boomer Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
WHAT FINANCIAL DECISION WOULD BOOMERS CHANGE?
If you could change one financial decision that you made within the past 10 years, what would it be?
Saving more/ spending less
Better investment decisions
Invest in real estate
Seek better job
Retiring prematurely
Carry less debt/ poor credit
Cash out/ open IRA
Moving to the wrong location
0% 8% 15% 23% 30%
1%
2%
4%
5%
7%
8%
19%
22%
19%
22%
SERIES: 2014 Baby Boomer Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
WHAT KEEPS BOOMERS UP AT NIGHT?
What keeps you up at night?
NothingBills/ finances
Stress/ anxietyFamily issues
WorkJob securityAche/ pain
InsomniaHealth concerns
TV/ internetWorld politics
Economy
0% 10% 20% 30% 40%1%
2%2%3%3%4%4%4%4%
6%13%
39%7%
13%39%
SERIES: 2014 Baby Boomer Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
CRAFTSMAN BUNGALOW IS DREAM HOME FOR 1/3 HOME OWNERS
Q. Which of the following is your dream home?
craftsman bungalow• 32%
neo colonial• 19%
dream mansion• 14%
Frank Lloyd Wright
desert modernism
art nouveau/art
modernemodern
townhomedowntown
loftbrick urban rowhome
8.5%
12%
5.7% 5.1% 2.6%
1.6%
2/3 HOME OWNERS PREFER A NIGHT IN WITH FAMILY/FRIENDS FOR FUN
Q. In which of the following activities would you like to participate? Select all that apply.
THE SHARE OF INTERNATIONAL BUYERS LOWEST IN 8 YEARS
0%
2%
4%
6%
8%
2008 2009 2010 2011 2012 2013 2014 2015
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.?
SERIES: 2015 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
0%
20%
40%
60%
80%
0 1 2 3 4 5 or more
4%1%3%5%
9%
77%
0.0510.0190.026
0.0630.117
0.724
4%2%4%6%
14%
71%
2012201320142015
# of Properties Sold to International Buyers in the Last 12 Months
% Who Sold to International Buyers
Q. How many properties have you sold to an international buyer in the last 12 months? SERIES: 2015 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
23% OF CA REALTORS® WORKED WITH AN INTERNATIONAL BUYER IN THE PAST 12 MONTHS
0%
13%
25%
38%
50%
China Mexico South Korea
8%8%
43%
COUNTRY OF INTERNATIONAL BUYER
SERIES: 2015 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
INTENDED USE FOR PROPERTY? HOME
Primary Residence
Investment/Rental Property
Vacation/Second Home
Other
0% 25% 50% 75% 100%
4%
27%
38%
30%
0%
2%
7%
91%
US BuyerInternational Buyer
What was the intended use of the property in your last closed transaction with an international client?
ALL CASH INTERNATIONAL BUYERS
All cashObtained financing
SOURCE: 2013 International Client Survey, 2013 Annual Housing Market SurveyHow did your last international buyer pay for the property?
OVER 1/3 LIVE WITH THEIR PARENTS
What is your current living situation?
SERIES: 2014 Millennials Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
ATTITUDE TOWARD THE HOME BUYING PROCESS – MIXED RESULTS
SOURCE: How would you describe your attitude towards the home buying process? C.A.R. 2014 Millennial Survey
MOST MILLENNIALS UNCERTAIN/DOUBTFUL THAT THEY COULD OBTAIN A MORTGAGE NOW?AMILLENNIAL ETHNICITY
SOURCE: C.A.R. 2014 Millennial Survey Q: Could you obtain a mortgage if you applied now ?
Don't know45%
No33%
Yes22%
PEOPLE WOULD PREFER THE FOLLOWING OVER GOING THROUGH THE HOME MORTGAGE PROCESS AGAIN:
SOURCE: Guaranteed Rate Mortgage Survey of 1,000 adults 25 and older USA Today April 2014
CALIFORNIA HOUSING MARKET OUTLOOK
2010 2011 2012 2013 2014 2015p 2016f
SFH Resales (000s) 416.5 422.6 439.8 414.9 383.3 407.5 433.0
% Change -12.3% 1.4% 4.1% -5.9% -7.6% 6.3% 6.3%
Median Price ($000s) $305.0 $286.0 $319.3 $407.2 $447.0 $476.3 $491.3
% Change 10.9% -6.2% 11.6% 27.5% 9.8% 6.5% 3.2%Housing Affordability Index 48% 53% 51% 36% 30% 31% 27%
30-Yr FRM 4.7% 4.5% 3.7% 4.0% 4.2% 3.9% 4.5%
SERIES: CA Housing Market Outlook SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2015; PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand) Sales of Existing Detached Homes
0
150,000
300,000
450,000
600,000
20052006200720082009201020112012201320142015p2016f
433,030407,490
Median Price
$0
$150,000
$300,000
$450,000
$600,000
2005 2011
Price (Thousand)
SERIES: CA Housing Market Outlook SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
CA: DOLLAR VOLUME UP 13.3% IN 2015, UP 9.6% IN 2016
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
$0
$100
$200
$300
$400
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015p 2016f
$ Volume of Sales Percent Change
$213$194
$171$169$140
$121$127$131$133$164
$244
$301
% Change$ in Billion
-60%
SERIES: CA Housing Market Outlook SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
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