2013 Annual Housing Market Webinar

A GOOD YEAR FOR THE CALIFORNIA
HOUSING MARKET SO FAR, HOW

DID WE GET THERE?

October 31, 2013
Oscar Wei, Senior Research Analyst

CALIFORNIA HOUSING MARKET
OUTLOOK
Sales of Existing Detached Homes
California, Sept. 2013 Sales: 412,880 Units, -3.1% YTD, -2.6% YTY

-
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 Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS
Median Price of Existing Detached Homes
California, September 2013: $428,810, Up 24.4% YTY
$-
$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% from
peak
SERIES: Median Price of Existing Single Family Homes
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 Homes
Supply of Inventory Remained Tight, But Continued
to Improve
0
1
2
3
4
Equity Sales REO Sales Short Sales
3.5
2.7
3.8
SERIES: Distressed Unsold Inventory Index

UNSOLD INVENTORY INDEX (MONTHS)
California: September 2013
For the 5
th
Month in a Row, the Supply of Distressed
Sales Improved
0
1
2
3
4
5
6
7
8
9
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Equity Sales REO Short Sales
SERIES: Distressed Months Supply of Inventory
UNSOLD INVENTORY INDEX (MONTHS)
Sales Bounce back in 2014, as Price Continues to
Grow
Units
(Thousand)
430
444
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013f
T
h
o
u
s
a
n
d
s

Sales of Existing Detached Homes
$409
$433
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013f
T
h
o
u
s
a
n
d
s

Median Price
Price
(Thousand)
SERIES: CA Housing Market Outlook
CA: Dollar Volume Steadily Improving
Up 25.3% in 2013, Up 9.3% in 2014
$301
$244
$164
$133
$131
$127
$121
$140
$176
$192
-40%
-30%
-20%
-10%
0%
10%
20%
30%
$0
$50
$100
$150
$200
$250
$300
$350
$400
2005 2006 2007 2008 2009 2010 2011 2012 2013f 2014f
$ Volume of Sales Percent Change
% Change $ in Billion
-60%
SERIES: CA Housing Market Outlook
2013 ANNUAL HOUSING
MARKET SURVEY
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.

Equity Sales vs. REO vs. Short Sales (2013)
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 60
SERIES: 2013 Housing Market Survey
Equity Sales (2011 vs. 2012 vs. 2013)

2011 2012 2013
Price / SF $250 $243 $270
% of All Cash Sales 25.5% 27.3% 25.2
REO Sales (2011 vs. 2012 vs. 2013)
2011 2012 2013
Price / SF $112 $116 $101
% of All Cash Sales 34.0% 43.1% 50.0%
Short Sales (2011 vs. 2012 vs. 2013)
2011 2012 2013
Price / SF $175 $154 $146
% of All Cash Sales 23.3% 26.7% 35.7%
Home Buyer Profile (By Type of Sales) - 2012
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%
Home Buyer Profile (By Type of Sales) - 2013
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%
Share of First-Time Buyers is the Lowest Since 2006
Q. Was the buyer a first-time buyer?
28%
0%
10%
20%
30%
40%
50%
2005 2006 2007 2008 2009 2010 2011 2012 2013
% First-Time Home Buyers Long Run Average
Long Run Average = 38%
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
Considerations, 21.0%
Desired Better
Location, 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
Community, 2.6%
Other, 8.8%
First-Time Buyers Bought Because They Were Tired
of Renting, Highest in Three Years
Q. Was the buyer a first-time buyer?
55%
40%
50%
60%
70%
2007 2008 2009 2010 2011 2012 2013
% Bought Because of Tired of Renting
$65,000
$70,000
20%
0%
5%
10%
15%
20%
25%
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
2005 2006 2007 2008 2009 2010 2011 2012 2013
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
Median Down Payment
First-Time Homebuyers Vs. Repeat Homebuyers
Q. What was the amount of downpayment?
$20,500
$31,420
$100,000
$96,300
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
2005 2006 2007 2008 2009 2010 2011 2012 2013
First-Time Buyers Repeat Buyers
Cash Source for Down Payment
First-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 Buyers Repeat 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%
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?
22%
56%
0%
10%
20%
30%
40%
50%
60%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Sale of Previous Residence Savings
Country of International Buyer
China (34%)

Canada (10%)

Mexico (15%)
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?
71%
14%
6%
4%
2%
4%
79%
9%
5%
3%
1%
3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
0 1 2 3 4 5+
2013
2012
# of Properties
% Who Sold to International Buyers
# of Properties Sold to International Buyers in the Last 12 Months
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
Community, 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%
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?
16%
0%
5%
10%
15%
20%
25%
30%
35%
2005 2006 2007 2008 2009 2010 2011 2012 2013
% of Homes Sold Due to Foreclosure/Short Sale/Default
Seller Household Formation
Equity vs. REO vs. 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%
Q. What was the net cash gain or net loss to the seller as a result of this sale?
$55,000
$0
$50,000
$100,000
$150,000
$200,000
$250,000
2005 2006 2007 2008 2009 2010 2011 2012 2013
After Reaching a Record Low in 2012, the Median
Net Cash Gain to Sellers Bounced Back.
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
For Those Who Do Not Plan to Repurchase, Here
Are Their Top 5 Reasons:
14.4%
8.1%
15.3%
8.6%
8.8%
22.0%
7.3%
7.1%
5.5%
5.0%
0% 5% 10% 15% 20% 25%
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
2012 2013
Reasons Sellers Not Planning to Buy Another Home
(2012)
Q. Why is the seller not planning to purchase another home?
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%
Reasons Sellers Not Planning to Buy Another Home
(2013)
Q. Why is the seller not planning to purchase another home?
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%
Top Reasons Under Other for Equity Sellers Not
Planning to Buy Another Home
13.2%
7.6%
4.5%
3.4%
2.8%
2.0%
0% 2% 4% 6% 8% 10% 12% 14%
Seller Has Another Home
Moved to Retirement Facility/Nursing Home
Deceased
Change in Family Status
Inheritance
Seller Is a Builder
IS THE HOUSING RECOVERY
SUSTAINABLE?
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%
5.9%
7.9%
5.1%
0%
10%
20%
30%
40%
50%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
All Hombuyers First-Time Buyers Repeat Buyers
Percent of Buyers with Zero Down Payment
Proportion of Transactions With Second Mortgages
Q. In addition to the first mortgage or assumption, was there a second mortgage?
2%
0%
10%
20%
30%
40%
50%
2005 2006 2007 2008 2009 2010 2011 2012 2013
Percent of Home Sales with Second Mortgage
Percent of Buyers with Second Mortgage
0%
10%
20%
30%
40%
50%
60%
70%
2005 2006 2007 2008 2009 2010 2011 2012 2013
First-Time Buyers Repeat Buyers
Q. Please indicate the type of mortgage.
Share of FHA Still Significantly Higher than 2007,
But Was the Lowest in 6 Years (First Mortgage)
17%
6%
0%
10%
20%
30%
40%
2005 2006 2007 2008 2009 2010 2011 2012 2013
FHA VA
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%
How Client Found Their Agent
Q. How did your client find and select you to represent them?
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%
Referral from a client
Represented Them in Previous Home Transaction
Client was Friend/Relative/Neighbor
Recommendations of Friends
Referral from Business Associates
Web page/Internet/Socia Media
Open House
Walk in /Floor Call
Yard Signs
Door-to-Door Farming
Listing Agent for Home Purchased
Relocation Referral
Print Ads/Newspaper & Magazine
Direct Mail Marketing
Telephone Marketing
Other
Real Estate Symposium
November 13, 2013
9 AM 4 PM
Skirball Cultural Center
Los Angeles, CA
car.org/MarketData/REVoic
es

SPEAKERS
Chief Economists of:
Other
Organizations:
Next Webinar

California's Future Home Buyers--What You Need to
Know to Convert Renters into Buyers

Thursday, Nov. 21
2 3 p.m.

To register, visit car.org/MarketData
http://www.car.org/marketdata/map
For more information:
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A GOOD YEAR FOR THE CALIFORNIA

HOUSING MARKET SO FAR, HOW

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