Market Pulse-October 2016 (Public)

1
MARKET PULSE
October 2016
Survey Methodology
Monthly online survey of more than 300
California REALTORS.
The survey was sent via email to a random
sample of 10,000 REALTORS throughout
California. The sample represented the
geographical distribution of C.A.R.
membership across the state.
Respondents are asked about their last
closed transaction and business activity in
their market area for the previous month.
MARKET CONDITIONS
Floor Calls Continue to Decline

Index (>50 is positive)
80
70
Index
60
50
40
30
40
49
41
20
10
0
Q: Compared to last month, the number of floor calls from potential clients in your market area this
month was
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey
Listing Appointments/Client Presentations

Decline
80
70
60
Index
50
40
30
46
40
20
10
0
Q: Compared to last month, the number of listing appointments and presentations to

clients in your market area this month was
41
Open House Traffic Decline

90
80
70
Index
60
52
50
40
45
30
20
10
0
Q: Compared to last month/year, open house traffic in your market area this month was
47
All Cash Purchases Remain Flat

70
Index
60
Index
50
40
30
43
37
20
10
0
Q: Compared to last month/year, the number of all cash purchases in your market area this month was
38
Lack of Inventory is the Biggest Concern

Lack of Inventory
26%
Decline in housing affordability
22%
Inflated home prices
18%
Slow down in economic

growth
8.7%
Housing bubble
6.0%
Rising interest rates
5.7%
Lending & financing
5.7%
Policy & regulations
2.4%
0%
10%
Q: What is your biggest concern about the current real estate market?
20%
30%
REALTORS Remain MostConcerned

About Inventory &Affordability
Inventory
Affordability
50%
40%
30%
20%
10%
0%
10
Affordability and Prices are the

Biggest Concerns for REALTORS
Prices (Affordability, Prices, Bubble)
Inventory
60%
50%
40%
30%
20%
10%
0%
11
Expectations for Market Conditions Continue to

Trend Downward
90
80
70
Index
60
57
54 54
50
40
30
20
10
0
Q: What are your expectations for market conditions over the next year?
12
LAST TRANSACTION
13
Fewer Properties Selling Below Asking Price

from Year Ago
Below
At
Over
100%
90%
80%
27%
31%
28%
70%
60%
25%
50%
29%
28%
40%
30%
20%
47%
10%
0%
Q: Did your last closed transaction sell over, at or below asking price?
44%
40%
14
Fewer Properties Selling Below Asking Price From

a Year Ago
Net % of Properties Selling Below/Above Asking Price
10%
0%
-9%
-10%
-20%
-16%
-20%
-30%
-40%
-50%
Q: Did your last closed transaction sell over, at or below asking price?
15
Premium Paid Unchanged From Last Year

Average
14.0%
12.0%
10.0%
8.9%
8.0%
6.0%
4.0%
2.0%
0.0%
Q: At what percentage was your last closed transaction sold over asking price?
9.1%
7.7%
16
% Paid Below Asking Price Lowest in Over a Year

-2%
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Jun-16
Jul-16
Aug-16
Sep-16
Oct-16
0%
-4%
-6%
-8%
-8.9%
-10%
-12%
-12%
-14%
-16%
Q: At what percentage was your last closed transaction sold below asking price?
-12%
17
59% of Properties Received Multiple Offers

80%
70%
60%
64%
63%
59%
50%
40%
30%
20%
10%
0%
Q: How many offers did the seller in your last closed transaction receive?
18
Competition Slowly Declining

Average
4.0
3.5
3.0
2.6
2.4
2.5
2.0
1.5
1.0
0.5
Sep-16
Jul-16
May-16
Mar-16
Jan-16
Nov-15
Sep-15
Jul-15
May-15
Mar-15
Jan-15
Nov-14
Sep-14
Jul-14
May-14
Mar-14
Jan-14
0.0
2.3
19
Properties Receiving 3+ Offers Similar from a Year Ago

Oct-15
40%
40%
Oct-16
35%
35%
27%
30%
29%
22%
25%
18%
20%
15%
7.1%
10%
5.4%
5%
2.5% 3.4%
3.5% 2.9%
0%
1
3
4
Number of Offers
6+
20
Proportion of 3+ Offers Down From A Year Ago

100%
1-2
3+
90%
80%
36%
35%
30%
70%
60%
50%
40%
30%
70%
64%
20%
10%
0%
65%
21
3+ Offers Highest in Mid Range & Luxury

Percentage of Properties Receiving
3+ Offers
Oct-15
50%
43%
45%
40%
35%
30%
25%
20%
33%
29%
Oct-16
42%
43%
41%
39%
36%
36%
50%
28%
23%
18%
21%
21%
15%
10%
5%
0%
20%
22
31% of Properties Had Listing Price Reductions

35%
32%
31%
30%
25%
20%
15%
10%
5%
0%
Q: Were there any listing price reductions before escrow opened in your last closed transaction?
25%
23
Proportion of Buyers Who Were Renters Declined YTY

60%
48%
50%
39%
40%
30%
20%
10%
Q: Was the buyer of your last closed transaction a renter immediately prior to purchasing the property?
Sep-16
Jul-16
May-16
Mar-16
Jan-16
Nov-15
Sep-15
Jul-15
May-15
Mar-15
Jan-15
Nov-14
Sep-14
Jul-14
May-14
Mar-14
Jan-14
0%
24
Fewer Sellers Became Renters from Last Year

25%
20%
18%
15%
14%
15%
10%
5%
Q: Did the seller of your last closed transaction become a renter immediately after selling the property?
Sep-16
Jul-16
May-16
Mar-16
Jan-16
Nov-15
Sep-15
Jul-15
May-15
Mar-15
Jan-15
Nov-14
Sep-14
Jul-14
May-14
Mar-14
Jan-14
0%
25
Share of First-time Buyers Dipped At Long Run Average

45%
% First-time Buyers
Long Run Average
40%
34%
35%
32%
30%
31%
25%
20%
15%
10%
5%
Q: Was the buyer of your last closed transaction a first-time buyer?

Sep-16
Jul-16
May-16
Mar-16
Jan-16
Nov-15
Sep-15
Jul-15
May-15
Mar-15
Jan-15
Nov-14
Sep-14
Jul-14
May-14
Mar-14
Jan-14
0%
26
Majority Purchases are Primary Residences

Primary residence
Investment
Vacation home
Other
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Jun-16
Jul-16
Aug-16
Sep-16
Oct-16
0%
Q: What was the intended/actual use of the property?

27
Share of Investment Properties Decreased

Investment
Vacation home
30%
25%
20%
3.2%
4.5%
15%
10%
17%
13%
5%
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Jun-16
Jul-16
Aug-16
Sep-16
Oct-16
0%
Q: What was the intended/actual use of the property?

28
Proportion of International Buyers Declined

% International Buyers
Long Run Average (6.2%)
12%
9.9%
10%
8%
6.5%
6%
4%
2%
0%
Q: Was the buyer an international client (one who was not a citizen or permanent resident of the U.S.)?
5.3%
29
Top 10 Counties of Respondents

September 2016
October 2016
Los Angeles
Los Angeles
Riverside
Riverside
San Diego
San Diego
Contra Costa
Alameda
Orange
Sacramento
San Bernardino
Contra Costa
Placer
Santa Clara
Sacramento
Orange
Santa Clara
San Luis Obispo
10
Alameda
Placer
Q: In which county do you live?

30
What are REALTORS Saying?

Cost of housing is once again exceeding the entry
level buyer's ability to qualify.
Too much regulation!
Appraisal turn around time is to slow and doesn't

match contract, brings a lot of stress.
There is no inventory under $500K, which is a real
problem.
Q: Do you have any specific comments, professional observations, or information that you
would like to share with us--such as information on multiple bidding, changing buyer
preferences, mortgage credit issues, or other topics?

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1

Floor Calls Continue to Decline

Listing Appointments/Client Presentations

Q: Compared to last month, the number of listing appointments and presentations to

Open House Traffic Decline

Index (>50 is positive)

All Cash Purchases Remain Flat

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

Lack of Inventory is the Biggest Concern

Decline in housing affordability

Inflated home prices

Slow down in economic

Rising interest rates

Lending & financing

Policy & regulations

REALTORS Remain MostConcerned

Affordability and Prices are the

Expectations for Market Conditions Continue to

Fewer Properties Selling Below Asking Price

Fewer Properties Selling Below Asking Price From

Premium Paid Unchanged From Last Year

% Paid Below Asking Price Lowest in Over a Year

59% of Properties Received Multiple Offers

Competition Slowly Declining

Properties Receiving 3+ Offers Similar from a Year Ago

Proportion of 3+ Offers Down From A Year Ago

3+ Offers Highest in Mid Range & Luxury

31% of Properties Had Listing Price Reductions

Proportion of Buyers Who Were Renters Declined YTY

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

Fewer Sellers Became Renters from Last Year

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

Share of First-time Buyers Dipped At Long Run Average

Long Run Average

Q: Was the buyer of your last closed transaction a first-time buyer?

Majority Purchases are Primary Residences

Q: What was the intended/actual use of the property?

Share of Investment Properties Decreased

Q: What was the intended/actual use of the property?

Proportion of International Buyers Declined

Long Run Average (6.2%)

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

Top 10 Counties of Respondents

San Luis Obispo

Q: In which county do you live?

What are REALTORS Saying?

Too much regulation!

Appraisal turn around time is to slow and doesn't

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

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