2012 Real Estate Market Update

Real Estate Market Update/ 2012 FORECAST

California Desert AOR January 26, 2012Leslie Appleton-Young, Chief Economist

Overview

US and California EconomiesCalifornia Housing MarketRegional & Local Markets2011 Annual Market Survey2012 Housing Market ForecastCA Buyers & Sellers in Today’s Housing Market

U.S. Economic Outlook

Economy Slowly Gaining Post-Stimulus Momentum

-8%-7%-6%-5%-4%-3%-2%-1%0%1%2%3%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

Q3-

10

Q1-

11

Q3-

11

GDP 2010: 2.8% 2011:1.8% 2012: 2.6%

ANNUAL QTRLY

2009 Largest Annual Drop since 1938 (-3.4%)

Performance Targets for National Economy

Current Target

This Year - Projected

Unemployment 6% 9.0%

US GDP 3% or higher 1.8%

Nonfarm Job Growth

3%+ or 400K+/mo 1.0%

CPI 2.5% 3.2%

SOURCE: California Association of REALTORS®

QUARTERLY PERCENT CHANGE

Consumer Spending ReboundingHoliday and Auto Sales

Consumer Spending 2011 Q3: 2.4%

SOURCE: US Dept of Commerce, Bureau of Economic Analysis

-4%

-2%

0%

2%

4%

6%

8%

1Q-2

000

1Q-2

001

1Q-2

002

1Q-2

003

1Q-2

004

1Q-2

005

1Q-2

006

1Q-2

007

1Q-2

008

1Q-2

009

1Q-2

010

1Q-2

011

INDEX, 100=1985

Consumer Confidence: Nov/Dec ReboundHoliday Shoppers & Improved Jobs Reports

December 2011: 64.5

20

40

60

80

100

120

140

160

Jan-

00

Jul-0

0

Jan-

01

Jul-0

1

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l-02

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9

Jan-

10

Jul-1

0

Jan-

11Ju

l-11

CA Underwater Mortgages:Reverse Wealth Effect

SOURCE: CoreLogic

30.2%

4.6%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Q4‐2009

Q1‐2010

Q2‐2010

Q3‐2010

Q4‐2010

Q1‐2011

Q2‐2011

Negative Equity Share in CA Near Negative Equity Share in CA

Unemployment: Heading Lower U.S. at 3 year low

December 2011

SOURCE: CA Employment Development Division

0%

2%

4%

6%

8%

10%

12%

14%

Jan-

00

Jan-

01

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

CA US

California (11.1%) vs. United States (8.5%)

-1,000,000

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

Jan-

08

Apr

-08

Jul-0

8

Oct

-08

Jan-

09

Apr

-09

Jul-0

9

Oct

-09

Jan-

10

Apr

-10

Jul-1

0

Oct

-10

Jan-

11

Apr

-11

Jul-1

1

Oct

-11

U.S. Non-farm Job Growth: Gaining!

SOURCE: US Dept of Labor, Bureau of Labor Statistics

Month-to-Month Changes

Recession Job Losses: 8.8 millionSince Jan’10: +2.4 million

-160000-140000-120000-100000

-80000-60000-40000-20000

020000400006000080000

100000

Jan-

08M

ar-0

8M

ay-0

8Ju

l-08

Sep-

08N

ov-0

8Ja

n-09

Mar

-09

May

-09

Jul-0

9Se

p-09

Nov

-09

Jan-

10M

ar-1

0M

ay-1

0Ju

l-10

Sep-

10N

ov-1

0Ja

n-11

Mar

-11

May

-11

Jul-1

1Se

p-11

Nov

-11

California Non-farm Job Growth

SOURCE: CA Employment Development Division

Month-to-Month ChangesRecession Job Losses: 1.3 million

Since Jan’10: +282,000

Where are California’s Jobs? Employment Trends:

Construction & Financial Sectors Biggest Losers


Industry 2005 Jul-11 Year to Date

Mining and Logging 23,600 27,600 4,000Construction 905,300 567,300 -338,000Manufacturing 1,502,600 1,257,600 -245,000Trade, Transportation & Utilities 2,822,100 2,641,500 -180,600Information 473,600 455,400 -18,200Financial Activities 920,300 755,800 -164,500Professional & Business Services 2,160,700 2,136,200 -24,500Educational & Health Services 1,593,400 1,837,000 243,600Leisure & Hospitality 1,475,200 1,531,600 56,400Other Services 505,500 484,500 -21,000Government 2,420,200 2,380,200 -40,000TOTAL 14,802,500 14,074,700 -727,800

CA New Housing Permits2011: 47,015 units, Up 5.0% from 2010

0

50,000

100,000

150,000

200,000

250,000

300,00019

88

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

Single Family Multi-Family

SOURCE: CBIA

Household Growth: 220,000-250,000/yr

SOURCE: Federal Home Loan Mortgage Corporation

Classic Liquidity Trap: Consumers DeleveragingLow Rates and Tight Credit

Fed easing through 2012

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

Jan-

00

Jan-

01

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

FRMARMFederal Funds

US Deficit Highest in Decades2010: 11% of GDP (Revenues – Expenses)

‐12.0%

‐10.0%

‐8.0%

‐6.0%

‐4.0%

‐2.0%

0.0%

2.0%

4.0%1962

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

Deficit as a % of GDP

Source: US Treasury, BEA, compiled by C.A.R.Note: Positive = Surplus

Federal Issues – Critical Concerns for the REALTOR Party

Future of Fannie and Freddie? FHA?

Tax Reform on the horizon – Mortgage Interest

Deduction?

QRM (Qualified Residential Mortgage)

20% Down requirement -- Is the future of the

30 year mortgage in doubt?

U.S. Economic Outlook

•2005 2006 2007 2008 2009 2010 2011f 2012f

US GDP 3.1% 2.7% 2.0% 0.0% -2.6% 2.9% 1.8% 2.6%

Nonfarm Job Growth 1.7% 1.8% 1.1% -0.6% -4.4% -0.7% 1.0% 0.9%

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, % Change

1.3% 4.0% 2.2% 0.5% 0.9% 1.4% 1.7% 1.5%

SOURCE: California Association of REALTORS®Forecast Date: January 2012

California Economic Outlook

•2005 2006 2007 2008 2009 2010 2011f 2012f

Nonfarm Job Growth 1.8% 1.7% 0.8% -1.3% -6.0% -1.4% 1.5% 2.1%

Unemployment Rate 5.4% 4.9% 5.4% 7.2% 11.4% 12.4% 12.0% 11.2%

Population Growth 1.2% 1.1% 1.1% 1.2% 1.1% 0.9% 0.9% 0.9%

Real Disposable Income, % Change

1.3% 3.4% 1.5% 0.1% -2.2% 1.6% 1.5% 2.0%


Forecast Date: January 2012

California Housing Market

Sales Hit Bottom 4 Years Ago Median Price 2011 = 2002

“Lost Decade” UNITS/MEDIAN PRICE $


0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

Sales of Existing Detached Homes Median Price

-61% -25%

-44%

Sales of Existing Detached Homes and Pacific West Consumer Confidence• California, December 2011 Sales: 520,940 Units, Up 1.1% YTD, Up 0.1% YTY

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

Jan-

00

Jan-

01

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

0

20

40

60

80

100

120

140

160

Sales Consumer Confidence INDEXUNITS

SOURCE: California Association of REALTORS®; The Conference Board

*Sales are seasonally adjusted and annualized

INDEX, 100 = 03/16/90

Mortgage Loan Applications for PurchaseJanuary 20, 2012: 184.8

0

100

200

300

400

500

600

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-

12

Source: Mortgage Bankers Association

Source: Mortgage Bankers Association

Mortgage Applications – Total Purchase Loans (Weekly % Chg.)

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

Jan-

11

Feb-

11

Mar

-11

Apr

-11

May

-11

Jun-

11

Jul-1

1

Aug

-11

Sep-

11

Oct

-11

Nov

-11

Dec

-11

Jan-

12

P: May-07$594,530

T: Feb-09$245,230

-59% frompeak

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000Ja

n-00

Jan-

01

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Median Price of Existing Detached HomesCalifornia, December 2011: $285,920, Down 6.2% YTY


Trough vs. Current Price – December 2011Southern California

Region Trough Month

Trough Price

Dec-11 Median

% Chg From Trough

San Bernardino County May-09 $120,410 $128,450 6.7%Ventura Couty Feb-09 $359,630 $391,060 8.7%Orange County Jan-09 $442,170 $484,630 9.6%San Diego County Mar-09 $326,830 $359,930 10.1%Palm Springs/Lower Desert Apr-09 $150,140 $165,960 10.5%Inland Empire Apr-09 $150,860 $172,430 14.3%CALIFORNIA Feb-09 $245,230 $285,920 16.6%Southern California Apr-09 $246,063 $286,950 16.6%Los Angeles Metro Apr-09 $227,370 $265,830 16.9%Riverside County Apr-09 $171,480 $203,650 18.8%Los Angeles County May-09 $248,850 $306,950 23.3%


Unsold Inventory IndexCalifornia, December 2011: 4.2 Months

0

2

4

6

8

10

12

14

16

18

20

Jan-

88

Jan-

89

Jan-

90

Jan-

91Ja

n-92

Jan-

93

Jan-

94

Jan-

95

Jan-

96Ja

n-97

Jan-

98

Jan-

99

Jan-

00

Jan-

01

Jan-

02Ja

n-03

Jan-

04

Jan-

05

Jan-

06

Jan-

07Ja

n-08

Jan-

09

Jan-

10

Jan-

11

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

MONTHS

Tight Supply of Inventory for REO Sales

0123456789

Equity Sales REO Sales Short Sales

6.7

2.7

8.9

2011Unsold Inventory Index (Months)


Price Range (Thousand) Dec-10 Nov-11 Dec-11

$1,000K+ 8.2 9.6 8.3$750-1000K 5.7 7.0 5.9$500-750K 4.7 6.0 4.5$300-500K 4.9 5.3 4.4$0-300K 4.9 4.7 3.9

Higher Price = Higher Inventory Unsold Inventory Index

(Months of Supply)

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

California’s Million-Dollar Home Sales

2252918,621

24,43642,506

50,01054,773

36,99020,595

15,70310,658

13,1018,9065,366

3,7622,6512,0172,5222,2982,8903,3623,7734,271

2,7180

1000

0

2000

0

3000

0

4000

0

5000

0

6000

0

19881989199019911992199319941995199619971998199920002001200220032004200520062007200820092010

Source: DataQuick Information Systems

Year

Number of Homes

Market Breakdown: Equity v. Distressed

Sales

REOs, 24.6%

Short Sales, 22.2%

Other Distressed Sales (Not

Specified), 0.5%

Equity Sales, 52.7%

Dec‐11

Share of Distressed Sales to Total Sales


SOURCE: ForeclosureRadar.com

0%

10%

20%

30%

40%

50%

60%

Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11

Equity Sales Short Sale Bank Owned

Share of Equity Sales Increased Throughout 2011


Distressed Sales: Southern California(Percent of Total Sales)

0%

20%

40%

60%

80%

100%

Los AngelesOrange

RiversideSan

Bernardino San Diego

49%

42%

63% 67%

28%

Dec-11


REO & Short Sales: Southern California(Percent of Total Sales)

0%

20%

40%

60%

80%

100%

Los AngelesOrange

RiversideSan

Bernardino San Diego

21%15%

31%47%

18%

27%

26%

31%19%

10%

Dec 2011

Short Sales

REO Sales

Mortgage Foreclosure & Delinquency RatesCalifornia: Q3-2011

7.6%

3.6%

0%

2%

4%

6%

8%

10%

12%

Q1/

74Q

2/75

Q3/

76Q

4/77

Q1/

79Q

2/80

Q3/

81Q

4/82

Q1/

84Q

2/85

Q3/

86Q

4/87

Q1/

89Q

2/90

Q3/

91Q

4/92

Q1/

94Q

2/95

Q3/

96Q

4/97

Q1/

99Q

2/00

Q3/

01Q

4/02

Q1/

04Q

2/05

Q3/

06Q

4/07

Q1/

09Q

2/10

Q3/

11

Delinquency Rate Foreclosure Rate

SOURCE: Mortgage Bankers Association

Delinquencies: Long Run Average: 4.4%

Foreclosure Rate: Long Run Average: 1.2%

California Foreclosure Outcomes, Dec. 2011REO: -16.4% YTD • 3rd Party: +5.0% YTD • Cancel: -13.1% YTD

0

5,000

10,000

15,000

20,000

25,000

30,000

Jan-

07

Apr

-07

Jul-0

7

Oct

-07

Jan-

08

Apr

-08

Jul-0

8

Oct

-08

Jan-

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Apr

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Jul-0

9

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Jul-1

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Jul-1

1

Oct

-11

REOs Sold to 3rd Party Cancellations


6 Month Average:

REO: 8,950

3rd Party: 3,353

Cancelled: 13,243

California Foreclosure Inventories, Dec. 2011Preforeclosure: -19.7% YTD • Schedule for Sale: -21.7% YTD •

Bank Owned: 0.6% YTD

0

50,000

100,000

150,000

200,000

Jan-

07

Apr

-07

Jul-0

7

Oct

-07

Jan-

08

Apr

-08

Jul-0

8

Oct

-08

Jan-

09

Apr

-09

Jul-0

9

Oct

-09

Jan-

10

Apr

-10

Jul-1

0

Oct

-10

Jan-

11

Apr

-11

Jul-1

1

Oct

-11

Preforeclosure Scheduled for Sale Bank Owned


6 Month Average:

Preforeclosure: 109,200

Schedule for Sale: 89,029

Bank Owned: 100,887

ForeclosuresSouthern California

0

10

20

30

40

50

60

Q1/

84Q

1/85

Q1/

86Q

1/87

Q1/

88Q

1/89

Q1/

90Q

1/91

Q1/

92Q

1/93

Q1/

94Q

1/95

Q1/

96Q

1/97

Q1/

98Q

1/99

Q1/

00Q

1/01

Q1/

02Q

1/03

Q1/

04Q

1/05

Q1/

06Q

1/07

Q1/

08Q

1/09

Q1/

10Q

1/11

SOURCE: Real Estate Research Council

THOUSANDS

Palm DesertPreforeclosure: 199 • Auction: 123 • Bank Owned: 88

Source: ForeclosureRadar.com as of 01/19/2012.

La QuintaPreforeclosure: 159 • Auction: 138 • Bank Owned: 100


IndioPreforeclosure: 315 • Auction: 205 • Bank Owned: 157


SacramentoPreforeclosure: 2,216 • Auction: 1,905 • Bank Owned: 1,560

Source: ForeclosureRadar.com as of 08/19/11

Local Market Conditions

Sales of Residential PropertiesPalm Desert, 2011: 1,514 Units, Up 7.4% YTY

SOURCE: Clarus Market Metrics

020406080

100120140160180

Jan

Feb

Mar

Apr

May Ju

n

Jul

Aug

Sept Oct

Nov Dec

2010

2011

Sales of Residential HomesPalm Desert, December 2011: 121 Unit

, Up 17.5% MTM, Down 2.4% YTY


Median Price of Residential HomesPalm Desert, December 2011: $265,000

Up 6.0% MTM, Down 8.5% YTY


Sales of Residential PropertiesLa Quinta, 2011: 1,353 Units, Up 5.5% YTY


0

20

40

60

80

100

120

140

160Ja

n

Feb

Mar

Apr

May Jun

Jul

Aug

Sept Oct

Nov Dec

2010

2011

Sales of Residential HomesLa Quinta, December 2011: 129 Units

Up 51.8% MTM, Up 18.3% YTY


Median Price of Residential HomesLa Quinta, December 2011: $285,000

Down 9.8% MTM, Up 0.4% YTY


Sales of Residential PropertiesIndio, 2011: 1,461 Units, Down 2.1% YTY


020406080

100120140160180200

Jan

Feb

Mar

Apr

May Ju

n

Jul

Aug

Sept Oct

Nov Dec

2010

2011

Sales of Residential HomesIndio, December 2011: 125 UnitsUp 26.3% MTM, Down 4.6% YTY


Median Price of Residential HomesIndio, December 2011: $159,900Up 6.6% MTM, Down 8.6% YTY


2011 Annual Housing Market Survey

Equity vs. REO vs. Short SalesEquity Sales REO Sales Short Sales

Share of Total Sales 58.7% 19.7% 20.2%

Median Home Price $431,000 $240,000 $287,000

Square Footage 1,783 1,500 1,600

Price / SF $250 $112 $175

Sales‐to‐List Price Ratio 95.9% 98.0% 95.9%

% of Sales With Multiple Offers 35.2% 58.3% 57.5%

Avg. Number of Offers 3.0 3.0 3.6

% of All Cash Sales 25.5% 34.0% 23.3%

Days on MLS 67 50 141

Days in Escrow 35 35 45

Proportion of Sellers Planning to Repurchase

0%

10%

20%

30%

40%

50%

60%

70%

80%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Q. Is the seller planning on purchasing another home?

Reasons Sellers Not Planning to Buy Another Home

Q. Why is the seller not planning to purchase another home?

2.7%

4.7%

4.9%

5.7%

10.9%

11.4%

19.8%

0% 10% 20% 30% 40% 50%

Seller is a lender/bank

Seller prefers to have less financial obligation

Poor credit background

Lack of cash for down payment

Out of work/unemployment

Decide to live with family/friends

Waiting for market to bottom

Reasons For SellingAll Home Sellers

0% 5% 10% 15% 20% 25% 30% 35%

Foreclosure/ShortSale/Default

Change in Family Status

Retirement/Move toRetirement Community

Investment/ TaxConsderations

Desired Better Location

Desired Smaller Home

Changed Jobs

Desired Larger Home

Other

Q. What was the single most important reason for selling/buying the property?

Investments & Second/Vacation Homes

0%

5%

10%

15%

20%

25%

17%

7%

Investment/Rental Property Vacation/Second Home

Foreign Buyers

8%

5% 6%6%

0%

2%

4%

6%

8%

10%

2008 2009 2010 2011

% of Foreign Buyers

Q. Was the buyer a foreign buyer?

California Housing Market Forecast

Forecast Progress Report

2010 Projected October 2010

2010 Actual

2011 Forecast October 2010

2011 Projected

SFH Resales (000s)

492.0 491.5 502.0 491.1

% Change ‐10.0% ‐10.1% 2.0% ‐0.1%Median Price ($000s)

$306.5 $303.1 $312.5 $291.0

% Change 11.5% 10.2% 2.0% ‐4.0%

Source: CALIFORNIA ASSOCIATION OF REALTORS®

Forecast Date: September 2011 vs October 2010

California Housing Market Outlook2005 2006 2007 2008 2009 2010 2011f 2012f

SFH Resales (000s) 625.0 477.5 346.9 441.8 546.9 491.5 491.1 496.2

% Change 0.03% -23.6% -27.3% 27.3% 23.8% -10.1% -0.1% 1.0%Median Price ($000s)

$522.7 $556.4 $560.3 $348.5 $275.0 $303.1 $291.0 $296.0

% Change 16.0% 6.5% 0.7% -37.8% -21.1% 10.2% -4.0% 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%

Source: CALIFORNIA ASSOCIATION OF REALTORS®

Forecast Date: September 2011

Real Estate Buyers & Sellers in Today’s

Market

How Buyers Found Home- 2011 -

Q. How did you find the home your purcahsed?

The Buying Experience

Considered buying for over 4 monthsShopped 2.5 months before contacting agentViewed 12 homes in 8 weeks with agent76% of buyers didn’t close escrow on time49% owned previous homeMotivated by price decreases, low mortgage rates and tax deductions80% found home through agent

The Selling Experience

Home was listed more than 2 months before opening escrowMedian escrow length was 1.5 monthsOnly 40% of sellers said their escrow closed on time20% of sellers used electronic signature

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?

Why Sellers Chose their Agent

1. First to Respond (21%)2. Seemed most responsive (21%)3. Seemed most aggressive (19%)4. Worked with agent before (16%)5. Understanding of distressed properties (6%)

Q. What was the single most important reason for selecting the agent that you used in your recent home purchase?

Buyer Method of Communicating With Agent

Q. What was your preferred method of communicating with your agent? How did your agent actually communicate with you?

Preferred ActualE-mail 73% 70%Telephone 37% 50%Text message 32% 1%Twitter 21% 0%Facebook 14% 0%In-person 6% 3%

Agent / Seller Communication Gap

69%64%

26%18%

6%5%

73%

1%

47%

3%

Preferred Actual

Q: What was the actual method of communication used most frequently with your agent?

Q: What was your preferred method of communication with your agent?

Buyer Expected vs Actual Agent Response Time

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Instantly Within30mins.

Within 1hr.

Within 2hrs.

Within 4hrs.

Same day 1businessday

37%28%

15%11% 8%

2% 0%

18%

7% 6%

37%

13% 16%

4%

Expected Actual

Q. What was the typical response time you expected from your agent to return any form of communication to you?

Q. On average, what was the actual response time of your agent to return any form of communication to you?

Seller Response Time is of the Essence

0%5%

10%15%20%25%30%35%40%45%

Instantly Within 30 Minutes

Within 1 Hour

Within 2 Hours

Within 4 Hours

Same day 1 business

day

Actual Expected

Q: On average, what was the ACTUAL time of your agent to return any form of communication to you?

Q: What was the typical response time you EXPECTED from your agent to return any form of communication with you?

Buyer Reasons for Satisfaction With Agent

1. 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?

Buyer Reasons for Dissatisfaction With Agent

1. 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?

What Buyers Would Like to Change About their Home Buying Experience

1. Faster response from agent (30%)

2. Better agent negotiation (27%)

3. Better agent communication (25%)

4. Better market direction understanding (19%)

5. Escrow close on time (9%)

Q. If there is one thing you would like to change about your home buying experience, what would that be?

Quick Facts About Buyers

• 59% found their agent online• 51% Googled their agent• 52% used social media in the buying process• 93% are receptive to receiving information via

social media

How Internet Was Used

Activity Percentage of Buyers

Preview homes to narrow search 75%

Find an agent 68%

Identify homes for agent to show 47%

Find a real estate firm 40%

Learn about neighborhoods 33%

Get information about financing & downpayments 33%

Q. For which of the following did you use the internet as a part of your home buying process?

Buyer Importance of OnlineFeatures in Home Viewing

Q. Please rate the following online features by the level of importance in your home viewing on a scale of one to five, with five being extremely important and one being not at all important.

Top 10 Websites Used

Real estate agent websiteQ. Which websites did you use as part of your home buying process?

52% of Buyers Used Social Media

Activity Percent of Buyers Who Engaged in Activity

Agent referrals 33%

Video home tours 26%

Agent Facebook page 24%

Home buying tips 23%

Comments on neighborhoods 21%

Neighborhood lifestyle 20%

Q. How did you use social media (such as Facebook, Twitter, LinkedIn, etc.) in your home buying process?

77% of Sellers Used Social Media

Q: Which social media websites did you use to learn more about and communicate with real estate agents and companies?

Closing Thoughts

Direction of Home Prices: Sellers Skeptical; Buyers Hopeful

0%

20%

40%

60%

80%

100%

Sellers Buyers

Down Flat Unsure Up

Q: Do you think home prices in your neighborhood will go up, down or stay flat in one year, five years and 10 years?

Real Estate: It’s Time To Buy Again

SOURCE: “Real estate: It’s time to buy again” Fortune Magazine’s 3/28/11 article written by Shawn Tully

“Forget stocks. Don't bet on gold. After four years of plunging home prices, the most attractive asset class in America is housing.”

8 in 10 Americans Agree Buying a Home is the Best Investment One Can Make

SOURCE: 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 of homeownership, even in the face of the five-year decline in prices. Asked if they rent out of choice or because they cannot afford to buy a home, just24% say they rent out of choice.”

SOURCE: Pew Research Center’s “Home Sweet Home. Still. Five Years After the Bubble Burst”

C.A.R. Strategic Planning Books

http://en.wikipedia.org/wiki/File:Steve_Jobs_by_Walter_Isaacson.jpg

Thank You

www.car.org.marketdata

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2012 Real Estate Market Update

Business

Transcript of 2012 Real Estate Market Update