THE HOME BUYERS OFTOMORROWWHATMILLENNIALS REALLY WANTPresented byCarmen Hirciag, MBASenior Research Analyst

Survey Methodology

1,000 online surveys conducted in Aug 2014

Respondents: CA residents, age 18-34

WHO ISTHETYPICALMILLENNIAL?Demographics

Famous Millennials

genY! echo boomers! generation next!

1980-1996

3 out of4

1 out of5 80%

20 texts/day

18-34 11million

56%

computers

Typical Millennial

24Years Old

28%College

Educated

62%Minority

50%Single

$35KMedianIncome

MedianAge: 24

What is your age?

0%

2%

4%

6%

8%

10%

12%

18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34

11%

9%

7% 7%6%

6%

7%

5%6%

4% 4%5%

6%

4% 4% 4% 4%

Age (Years)

Millennials Not Married

What is your marital status?

Married 26%

Single 50%

In a committedrelationship

23%

Other 2%

Marital StatusVaries by Age Group

23% 21% 23%

62%

29%

50%

13%

47%

26%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

18-26 27-34 All

Married

Single

In a committed relationship

Other

*Source: 2013 American Community Survey, U.S. Census BureauWhat is your marital status?

Education

*Source: 2013 American Community Survey, U.S. Census BureauWhat is the highest level of education you have completed?

6%

22%

38%

23%

4%

11%

36%

27%

11%

3%

3%

14%

44%

30%

4%

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

Graduate school

Four-year college

Some College

High school

Some High school

18-26

27-34

All

62% are Minorities

What is your ethnic background?

0%

5%

10%

15%

20%

25%

30%

35%

40%

Caucasian/White

Hispanic/ Latino Asian AfricanAmerican

Other

38%35%

18%

7%

4%

1/2 Millennials are Employed

Student 24%

Unemployed20%

Employed 52%

Other 3%

What is your employment status?

Majority Employed

What is your employment status?

2% 5% 3%

43%

68%

52%

20%

21%

20%

35%

6%

24%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

18-26 27-34 All

Student

Unemployed

Employed

Other

Only 1/3 Millennials Have FullTime Jobs

What is your employment status?

3%

33%

19%

14%

6%

20%

4%

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

Other

Full time

Part time

Unemployed, looking for a job

Unemployed, not looking for work

Full time student

Part time student

Employment StatusVaries byAge Group

What is your employment status?

3%

33%

19%

14%

6%

20%

4%

5%

54%

14%

13%

8%

2%

4%

2%

22%

21%

15%

5%

5%

30%

0% 10% 20% 30% 40% 50% 60%

Other

Full time

Part time

Unemployed, looking for a job

Unemployed, not looking for work

Full time student

Part time student

18-26

27-34

All

Top Millennial Professions

What is your profession?

MedianYears in Current Job: 2

How many years have you been in your current job?

0%

5%

10%

15%

20%

25%

Majority Earn Less than $40k/Year

What is your annual household income?

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%18%

15% 15%

11%

10%

5%4%

7%

3%

6%5%

3%

Income (In Thousands)

Older Millennials Have Higher Earnings

$0

$10,000

$20,000

$30,000

$40,000

$50,000

18-26 27-34 All

$30,000

$50,000

$35,000

Age Group

Median Annual Household Income

What is your annual household income?

Nearly 2/5 Millennials Live w/Parents

What is your current living situation?

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

I rent I live with myparents

I own I live in a dorm Other:

41%

36%

20%

1%1%

Nearly of 18-26Year Olds Live w/Parents

What is your current living situation?

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

I own I rent I live with myparents

I live in a dorm Other:

11%

37%

49%

2% 2%

38%

49%

12%

1%

20%

41%

36%

1% 1%

18-26

27-34

All

Majority Have Lived in Current Home

Slightly More than Half Live in Single Family Homes

In which type of home do you currently live?

Single family55%

Multifamily42%

Other3%

> 1/2 Live in Single Family Homes

In which type of home do you currently live?

0%

10%

20%

30%

40%

50%

60%

Single familyhome

Apartment Condo Townhouse Dorm Other

55%

31%

5% 5%

1% 3%

0%

10%

20%

30%

40%

50%

60%

0 1 2 3 4 5 6Number of People

Adults Children

Nearly Half Dont Have Children

How many people live in the home?

Nearly Half Dont Have Children

How many people live in the home?

0%

10%

20%

30%

40%

50%

60%

0 1 2 3 4 5 6

Number of people

Adults Children

18-2627-34

Most Households are Families

Please indicate the relationship between you and the other people living with you.

Family 86%

Roomates 10%

Other 6%

RENTERS

Median Monthly Rent: $1,075

How much is your monthly rent?

0%

2%

4%

6%

8%

10% 9%

7%6%

5%

10%

7%

8%

5%

9%

6%

5%

6%6%

3%

6%

4%

Rent ($)

Affordable Rent isTop Reason forChoosingCurrentResidence

What was the most important reason for electing to live in your current residence?

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Other

Near shopping

Close to public transportation

Amenities

School district

Quiet/privacy

Larger space

Near family

Near work

Near school

I like the neighborhood

Affordable rent

2%

1%

1%

2%

2%

3%

4%

5%

6%

7%

17%

48%

1/10 Renters PreviouslyOwned a Home

Have you ever owned a primary residence?

Yes 12%

No 88%

Majority Sold HomeAfter 2009

What year did you sell your primary residence?

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

4%6%

2%4%

4%

2%

6%

2%

4%

11%

4%

13%

7%

9%

6%

20%

Many Sold Home Due to Financial Distress

Why did you sell your previous primary residence?

0% 5% 10% 15% 20% 25% 30% 35% 40%

Other

Believe housing market is going down

Recent rise in home values

Opted to become a renter

Needed to move for work

Needed to move for family reasons

Financial distress

12%

2%

7%

10%

22%

24%

39%

Majority Rent Because theyCantAfford to Buy

Why do you rent instead of buying?

2%

4%

7%

9%

10%

15%

16%

17%

20%

24%

37%

67%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Other

Believe housing market will decline in the near future

No interest in buying

Don't want the responsibility of owning

Don't have a job

Enjoy the flexibility/freedom of renting

Too costly to maintain property as owner

Can't qualify for a mortgage

Don't have a down payment

It's easier to rent

Not ready to buy

Can't afford to buy

Most Expect to Buy a HomeWithin 5Years

When do you expect to buy a home?

0%

5%

10%

15%

20%

25%

30%

35%

Within ayear

In 1-3years

In 3-5years

When Iget

married

When Ihave achild

Never Other Don'tknow

18-26

27-34

All

Affordable Home Price is #1 Motivator to Buy Now

What would most motivate you to buy a home now?

0% 5% 10% 15% 20% 25% 30% 35% 40%

Other

Tax incentives

Favorable interest rates

Improvement in credit score

Nothing, I don't want to buy a home

Starting a family

Improvement in finances

Having money for down payment

Affordable home price

2%

1%

4%

4%

9%

13%

15%

16%

36%

Most Plan to Buy Locally

Where do you plan to buy your next primary residence?

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Don't know/unsure

Another country

Another state

In another county in California

In the same neighborhood where I currently reside

Within the same county where I currently reside

19%

1%

7%

9%

18%

46%

Millennials Prefer Single Family Homes

What type of residence do you plan to purchase?

0%

10%

20%

30%

40%

50%

60%

70%

Detached single-family home

Townhouse/condominium

Don't know/ unsure Other

67%

12%

20%

1%

Big Lots in the Suburbs are Highly Desirable

Which of the following features would you like to have in your ideal home?

3%

8%

12%

27%

34%

36%

41%

42%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Other

Don't know/ unsure

High rise building

Urban location

Live/ work space

View

Suburban location

Lots of land/ big lot

Ideal Neighborhood Features

Which of the following features would you like to have in your ideal neighborhood?

1%

8%

10%

11%

14%

17%

20%

21%

22%

28%

41%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Other

Resort area

Ethnic

Rural

Don't know/ unsure

Urban pioneer

Cul-de-sac

Urban core

Historic

Gated community

Pedestrian-oriented

MajorityWould Begin Home SearchOnline

How would you begin your search for a home to purchase?

0% 10% 20% 30% 40% 50% 60%

Other

Consult friends/family

Contact real estate agent

Online search

7%

15%

22%

56%

8/10 Feel Home Ownership is Important

How important is home ownership to you on a scale of one to 10, with one being not at all important and 10being extremely important?

0%

5%

10%

15%

20%

25%

30%

1 - Not atall

Important

2 3 4 5 6 7 8 9 10 - VeryImportant

2% 2%

5%3%

8%

12%

15%

26%

12%

16%

Advantages of Home Ownership

In your opinion, what are the advantages of home ownership?

24%

39%

43%

45%

46%

49%

56%

64%

0% 10% 20% 30% 40% 50% 60% 70%

Tax deductions

Equity/investment

Stability/security

More space

Better quality of life

Satisfaction of ownership

Privacy

Freedom to do what you want with the property

Advantages of Home Ownership

In your opinion, what are the advantages of home ownership?

45%

51%

34%

60%

0% 10% 20% 30% 40% 50% 60% 70%

Equity/investment

Privacy

18-26 27-34

Millennials Biggest Concerns

What are your biggest concerns about home ownership?

Price/Affordability (45%)

Problems with Credit, Mortgages, or Taxes (19%)

Maintenance/Upkeep (14%)

Satisfaction with Home/Location (7%)

Responsibility (4%)

HousingCrisisAffected HomeOwnershipPerspective

Has the recent (2007-2008) housing crisis made you less likely to consider owning a home a good investment?

Yes, 41%

No, 59%

Have Student Debt

What is the balance of your outstanding student debt?

0%

5%

10%

15%

20%

25%

$1-10K $10K-20K $20K-50K $50K-100K >$100K

21%

12% 12%

3%2%

Student Debt (In Thousands)

Student Debt Not Preventing Most from Buying

Is your student debt preventing you from qualifying for a mortgage?

Yes 12%

No 61%

Don't know27%

More than Half haveOther Debt that Prevents Buying aHome

What other type of debt do you have that would make it difficult to buy a home?

4%

7%

8%

17%

41%

43%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Other

Private loan from friend/ relative

Consolidated personal loan

Auto loan

Credit cards

None

Older Millennials Have more Debt

What other type of debt do you have that would make it difficult to buy a home?

9%

23%

50%

8%

13%

36%

0% 10% 20% 30% 40% 50% 60%

Consolidated personal loan

Auto loan

Credit cards

18-26

27-34

Most Uncertain/Doubtful theyCouldObtain aMortgage Now

Could you obtain a mortgage if you applied now?

Yes 22%

No 33%

Don't know45%

HOME OWNERS

Most Homes Purchased after 2009

What year was the home purchased?

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

3%1%

2%

0%2% 2% 2% 1%

6%

11%

8%10%

19%

15%

5%

Year

Majority Purchased their Homes

Who originally purchased the home?

9%

9%

79%

4%

36%

57%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

My spouse/significant other

My parent(s)

I purchased the home

18-26

27-34

Most Millennials are First-Time Buyers

Was this your first home purchase?

Yes, 88%

No, 12%

Median Purchase Price: $267,000

What was the purchase price of the home?

0%

2%

4%

6%

8%

10%

12%

9%10%

11% 11%

8%7%

9%

4%

6% 6%

3%

Purchase Price (In Thousands)

OlderCohort Purchased Pricier Homes

What was the purchase price of the home?

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

18-26 27-34 All

$210,500

$295,500

$267,000

Median Price

Purchase Price Highest in NorCal

What was the purchase price of the home?

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

Northern CA Southern CA Other CA All

$400,000

$267,000

$200,000

$267,000

Median Price

Affordability is Main Reason for Buying a Home

What were your main reasons for buying a home?

1%

1%

2%

5%

11%

17%

22%

23%

24%

29%

30%

37%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Other

To rent it out

To flip it for a profit

Desired smaller home

Investment/Tax advantages

Favorable financing

Changed jobs/Relocated

Tired of renting

Desired better/other location

Desired larger home

Change in family status

Affordable price

Many Didnt Buy Sooner Due to Lack of Urgency

Why didnt you buy a home sooner?

5%

7%

8%

26%

26%

27%

32%

33%

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

Other

Difficulty qualifying for mortgage

Needed to sell existing home first

Not many good housing options

Waited until finances improved

Needed to save for down payment

Waited to see when prices would stabilize

No buying urgency

Location! Location! Location!

What was the most important reason for selecting the home you purchased?

2%

4%

5%

6%

8%

18%

57%

0% 10% 20% 30% 40% 50% 60%

Other

School district

Size

Walkability

Home features

Neighborhood

Location

Majority Found HomeThroughAgent

How did you find the home you purchased?

4%

4%

6%

7%

26%

54%

0% 10% 20% 30% 40% 50% 60%

Other

Newspaper

Open House

For sale sign

Internet

Real estate agent

Most Found Home on Zillow or Realtor.com

If found home on internet, on which website did you find your home?

6%

2%

3%

5%

6%

6%

10%

23%

39%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Other

Broker

Zip Realty

Redfin

Trulia

Agent

Craigslist

Realtor.com

Zillow

Future Home Price Expectations are Positive

11% 15%

9%12%

21% 10%

59% 63%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

In one year In five years

Up

Flat

Don't know

Down

Do you think home prices in the neighborhood where you purchased will go up, down or stay flat in

PositiveAttitudeToward Home Buying Process

How would you describe your attitude towards the home buying process?

0%

10%

20%

30%

40%

50%

60%

Positive Negative Neutral N/A Other

50%

34%

8%4%

4%

Home Buying Experience vs. Expectations

How did the actual home buying experience compare to your expectations prior to beginning the process?

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Better thanexpected/Good

Worse than expected/Bad Same as expected

40%

25%20%

More than 4/5 are Satisfied with Home

Are you satisfied with the home you purchased or do you feel like you selected the best option given the limitedsupply of homes?

Satisfied, 85%

Selected bestoption given

limited supply,15%

Most Planning to Keep Property

Older Millennials Plan to Keep Home 1Year Longer

How long do you plan to keep the property?

0.0

1.0

2.0

3.0

4.0

5.0

18-26 27-34 All

3.8

4.74.3#

of

Years

Millennial Age Group

Average

MostWant BetterAgent Communication

If there were one thing you could change about your home buying experience, what would it be?

9%

16%

31%

53%

64%

69%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Other

Better agent negotiation

Faster agent response

Nothing, I would not change anything

Better market understanding

Better communication with agent

Advice to First-Time Buyers

What advice would you give to other first time buyers?

3%

13%

16%

22%

24%

28%

33%

54%

0% 10% 20% 30% 40% 50% 60%

Other

Find out how frequently your agent will be in contact

Don't use the sellers' agent

Get pre-qualified for a mortgage by more than 1 lender

Check agents' references

Make your agent prove he/she will negotiate hard for you

Find out how fast your agent will respond to you

Do your homework online

MostWouldnt Sell Home Now

Would you consider selling your home now?

Yes, 27%

No, 57%

Don't know,16%

Financing

MajorityObtained Financing

How did you pay for the home you purchased?

Obtainedfinancing, 83%

All cash, 17%

Cash Funds Mainly from Personal Savings

If all cash, where did the funds come from? N = 41

2%

2%

5%

12%

17%

22%

27%

51%

0% 10% 20% 30% 40% 50% 60%

Supplied by employer contribution

Supplied from governent

Other

Sales from personal assets

Borrowed or gifted

Inheritance

Proeeds from a previous residence

Personal savings

Average Down Payment: 26%

0%

2%

4%

6%

8%

10%

12%

14%

16%

0 1 to 5 6 to 10 11 to 15 16 to 20 21 to 25 26 to 30 31 to 35 36 to 50 50+

5%

8%

13%

8%

15%14%

9%8%

11%

12%

Down Payment (%)

How much was your down payment for the home purchased (as a percentage of the sale price)?

Average Difficulty Rating: 4.4

Please rate how easy or difficult it was to obtain financing on a scale of one to 10, with one being very easy and10 being very difficult.

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

1 -VeryEasy

2 3 4 5 6 7 8 9 10 - VeryDifficult

9%10%

19%

13%

17%

15%

8% 8%

1% 1%

Buyer/ Agent Relationship

Many Related to Agent

How did you find your real estate agent?

2%

3%

3%

6%

6%

8%

10%

12%

19%

31%

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

Prior dealings with the company in other areas

Other

Prior dealings with real estate agent

"For Sale" signs in the neighborhood

Met at an event

Agent's farming material

Did not use an agent

Internet

Referral from friends, relatives, neighbors, or othercontacts

Agent is a relative or friend

Average Number of Agents Interviewed: 2

How many agents did you interview prior to selecting the agent you used in your recent home purchase?

0%

10%

20%

30%

40%

50%

60%

1 2 3 4 5 6+

58%

22%

12%

4%2% 3%

Agents Interviewed

ResponsiveAgents are Most Desired

What was the single most important reason for selecting that agent?

3%

4%

8%

9%

17%

27%

31%

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

Distressed property knowledge

Seemed most aggressive

Negotiating ability

Other

Previously used agent

Most knowledgeable

Seemed most reponsive

4/10 GoogledTheirAgent

Did you Google (conduct an internet search for) your agent to find out information about him/her?

Yes, 40%

No, 52%

Don't know,8%

Average Number of HomesViewed: 8.2

How many different homes did you preview and visit with your agent prior to making a purchase?

0%

5%

10%

15%

20%

25%

1 2 3 4 5 6-10 11-20 21+

10% 11%

19%

7%

12%

21%

13%

7%

Homes Viewed

Average Number ofOffers onOther Homes: 2.3

How many offers did you make on other homes?

0%

5%

10%

15%

20%

25%

30%

0 1 2 3 4 5 6 to 10 11+

20%

28%25%

12%

3%

6%4%

3%

Number of Offers

Preferred vs.Actual Communication

0%5%

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

Preferred Actual

What was your preferred method of communicating with your agent and how did your agent primarilycommunicate with you?

Preferred vs.Actual Response Rate

2%

28%

48%

22%

3%

29%

48%

20%

0%

10%

20%

30%

40%

50%

60%

>1 business day Within 1 business day Within 1 hour Instantly

Preferred Actual

When attempting to reach your agent, what response time were you typically expecting for your agent to getback to you, and on average, what was the actual response time for your agent to return your communication?

Overall Home Buying ProcessAverageSatisfactionRating: 7.3

Please rate your degree of satisfaction with the overall process of buying a home on a scale of one to 10, whereone is least satisfied and 10 is most satisfied.

0%

5%

10%

15%

20%

25%

30%

35%

1 - LeastSatisfied

2 3 4 5 6 7 8 9 10 - MostSatisfied

1% 1%4%

2%6%

11%

21%

33%

11% 11%

AverageAgent Satisfaction Rating: 7.5

Please rate your degree of satisfaction with your real estate agent on a scale of one to 10, where one is leastsatisfied and 10 is most satisfied.

0%

5%

10%

15%

20%

25%

30%

1 - LeastSatisfied

2 3 4 5 6 7 8 9 10 - MostSatisfied

2%1%

4%2%

6%9%

17%

28%

14%17%

WhyWere Millennials Satisfied with theirAgent?

Why do you have that level of satisfaction with your agent?

2%

4%

7%

16%

18%

38%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Other

Agent was always quick to respond

Agent listened to my needs

Agent helped find the best home

Agent negotiated good deal

Agent worked hard

WhatCouldAgents Improve?

Why do you have that level of satisfaction with your agent?

3%

3%

4%

5%

0% 1% 2% 3% 4% 5% 6%

Agent did not communicate according to my preference

Agent was not aggressive in negotiation

Agent needed to do a better job of monitoring thetransaction

Agent did not communicate efficiently

Value of Hiring anAgent

What value did you receive from hiring an agent to represent you in the transaction?

0%

5%

10%

15%

20%

25%25%

19%

10% 10%

8% 8%6%

4% 4%

4/5WouldWork with SameAgentAgain

Would you work with the same agent again?

Yes, 78%

No, 12%

Don't know,11%

Where do Millennials NeedAgentAssistance?

In which part(s) of the transaction did you need the most assistance from your agent?

2%

6%

6%

16%

27%

43%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Other

Determining comps

Determining affordability

Negotiating terms of sale

Negotiating purchase price

Finding the right home

Advice for Real EstateAgents

What advice would you give to real estate agents to improve the home buying process or their level of service?

5%

16%

17%

26%

35%

40%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Other

Communicate better

Understand the real estate market better

Negotiate better

Respond faster

Communicate according to clientpreference

Baby Boomers in the HousingMarketWhats Ahead in their

GoldenYears?Thursday, October 30, 2014

2:00 PM - 3:00 PM

To register:WWW.CAR.ORG/MARKETDATA/VIDEOS

Join us for our next webinar

THANKYOU!Questions?carmenh@car.org