2015 Home Seller Survey

UNDERSTANDINGCALIFORNIAHOME SELLERS

September 24,2015

Oscar Wei, Senior Economist

CALIFORNIA HOUSING MARKETOUTLOOK

SALES OF EXISTING DETACHED HOMES

California, Aug 2015 Sales: 431,800 Units, +7.4%YTD, +9.3%YTY

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

Jan

-05

Jul-

05

Jan

-06

Jul-

06

Jan

-07

Jul-

07

Jan

-08

Jul-

08

Jan

-09

Jul-

09

Jan

-10

Jul-

10

Jan

-11

Jul-

11

Jan

-12

Jul-

12

Jan

-13

Jul-

13

Jan

-14

Jul-

14

Jan

-15

Jul-

15

*Sales are seasonally adjusted and annualizedSERIES: Sales of Existing Single Family HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Aug-15:431,800

Aug-14:395,080

CALIFORNIA SALES

SERIES: Sales of Existing Single Family Homes, Seasonally AdjustedSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

Jan

-10

Ap

r-10

Jul-

10

Oct

-10

Jan

-11

Ap

r-11

Jul-

11

Oct

-11

Jan

-12

Ap

r-12

Jul-

12

Oct

-12

Jan

-13

Ap

r-13

Jul-

13

Oct

-13

Jan

-14

Ap

r-14

Jul-

14

Oct

-14

Jan

-15

Ap

r-15

Jul-

15

Year-over-Year % Chg 6 per. Mov. Avg. (Year-over-Year % Chg)

MEDIAN PRICE OF EXISTING DETACHED HOMES

California, Aug 2015: $493,420, 1.0% MTM, +2.5%YTY

$-

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

Jan

-05

Jul-

05

Jan

-06

Jul-

06

Jan

-07

Jul-

07

Jan

-08

Jul-

08

Jan

-09

Jul-

09

Jan

-10

Jul-

10

Jan

-11

Jul-

11

Jan

-12

Jul-

12

Jan

-13

Jul-

13

Jan

-14

Jul-

14

Jan

-15

Jul-

15

P: May-07$594,530

T: Feb-09$245,230-59% frompeak

SERIES: Median Price of Existing Single Family HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Aug-15:$493,420

Aug-14:$481,250

INVENTORY CONTINUED TODECLINE FROM LASTYEAR

Aug 2014: 4.0 Months; Aug 2015: 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. Theremaining inventory for the month is defined as the number of properties that were “Active”, “Pending”, and “Contingent” (when available) and dividethe sum by the number of “Sold” properties for the month in question.

0

2

4

6

8

10

12

14

16

18

Jan

-05

Jul-

05

Jan

-…

Jul-

06

Jan

-07

Jul-

07

Jan

-…

Jul-

08

Jan

-…

Jul-

09

Jan

-10

Jul-

10

Jan

-11

Jul-

11

Jan

-12

Jul-

12

Jan

-13

Jul-

13

Jan

-14

Jul-

14

Jan

-15

Jul-

15

SERIES: Unsold Inventory Index of Existing Single Family HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

DEMAND OUTPACING SUPPLY

0%

7%

13%

-12%

-7%

-1%

-20%

-10%

0%

10%

20%

San Francisco Bay Area Southern California Central Valley

Sales Active ListingsYear-to-Year % Chg

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Aug 2015

WHERE IS THE INVENTORY?

– Investors renting instead of flipping

– Mortgage Lock-In Effect

– Where will I go?

– Foreclosure pipeline is dry

– New construction recovering but LOW

– Off-market (aka “pocket’) listings not beingcounted in listing stats

SHORT SALES CONTINUED SHRINKING

56%

88% 93% 96%

44%

12% 6.0% 4.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2012 2013 2014 2015

Equity Sale Short Sale

Q: Was the home sold as a short sale?

YEARS OWNED HOME BEFORE SELLING

10

0

2

4

6

8

10

12 All Sellers

SERIES: 2015 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

FEWER MIDDLE-AGE ADULTS IN RECENTYEARS

Source: Harvard Joint Center of Housing Studies, Census Bureau

DROP IN HOMEOWNERSHIP


DECLINE IN # OF TRADE UP BUYERS DUE TO POPULATION LOSS &DROP IN HOMEOWNERSHIP RATE


FEWER HOMEOWNERS IN THEIR 30’S, 40’S LED TORECENT DECLINE IN TRADE UP BUYERS


ABOUT THE SELLER

SELLERS AREYOUNGER

4346 47 46 46 46

41

3740

3537

46

63

52

0

10

20

30

40

50

60

70

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Median Age

Average Age

Q: What is your age?

SELLERS BY GENERATION

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Gen Y (1980-1999) Gen X (1965-1979) Boomers (1946-1964) Seniors (before 1946)

Q: What is your age?

FIRST-TIME SELLERS

21%

16%

20%18% 17%

15%

33%

44%47% 48%

57%

35%

25%

40%

0%

10%

20%

30%

40%

50%

60%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Q: Was this your first experience in selling a house?

FIRST-TIME SELLERS

91%

53%

24%

9%

40%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Gen Y Gen X Boomers Silent All

Q: Was this your first experience in selling a house?

MOST SELLERS ARE MARRIED

0%

20%

40%

60%

80%

100%

120%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

24%13%

39% 37% 36%30% 34% 37% 35% 32% 33% 32%

12% 17%

76%87%

61% 63% 64%

53% 50% 48% 50%46% 47% 48%

71%71%

17% 17% 16% 16%22% 20% 19% 12%

13%

Single Married Other

Q:What was the marital status the head of your household at the time of the sale?

MEDIAN HOUSEHOLD INCOME: $100,000

23%

14%

11%

24%

13%

15%

< $50,000

$50,000-$74,999

$75,000-$99,999

$100,000-$149,999

$150,000-$199,999

$200,000+

0% 5% 10% 15% 20% 25%

Q: What is your annual household income?

MEDIAN ANNUAL INCOME HAS INCREASED

Q: What is your annual household income? (Please enter only numbers, no characters --- ie. $, periods, orcommas)

$81,918

$100,000

0

20,000

40,000

60,000

80,000

100,000

120,000

2014 2015

MEDIAN HOUSEHOLD INCOME: $100,000

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

< $50,000 $50,000-$74,999 $75,000-$99,999

$100,000-$149,999 $150,000-$199,999 $200,000+

Q: What is your total annual household income

TOP REASON TO SELL:MOVING TO A BETTER LOCATION

Q: What was your primary reason for selling your home?

0% 5% 10% 15% 20%

Other

For the investment advantages

I lost my job

To get the highest price for the home

I am an empty nester

I had trouble making the mortgage payment

I was retiring

I had to relocate for work

I had a change in family status (i.e. marriage,…

I wanted to downsize

I wanted a larger home

I wanted to move to a better location

12%

2.3%

2.5%

2.8%

2.9%

4.6%

7.9%

10%

11%

12%

14%

19%

TOP 5 REASONS FOR SELLING THEIR HOME(FIRST TIME VS. REPEAT)


7%

9%

14%

20%

22%


I had to relocate forwork

I had a change in familystatus (i.e. marriage,

child birth, divorce, etc.)

I wanted to move to abetter location


First Time Sellers

9%

10%

12%

16%

17%


I had to relocate forwork

I was retiring


I wanted to move to abetter location

Repeat Sellers

REASONS FOR MOVING DIFFER ACROSSGENERATIONS


All GenY Gen X Boomers Silent

Desired better location 19% 25% 20% 20% 4.5%

Wanted larger home 13% 25% 24% 3.3% 2.3%

Downsizing 12% 1.6% 6.6% 14% 32%

Change in family status 11% 16% 13% 7.6% 9.1%

Relocating for work 11% 14% 16% 8.1% 0%

I was retiring 8.0% 0% 0.6% 17% 5%

Trouble making mortgagepayment

4.3% 4.7% 5.4% 2.9% 7.0%

I am an empty nester 3.3% 0% o% 7.1% 2.3%

I lost my job 2.9% 3.1% 1.8% 4.3% 0%

For the investmentadvantages

2.1% 1.6% 3.0% 0.5% 6.8%

TECHNOLOGY USE

THERE IS A 7% INCREASE IN INTERNET USAGE

0%

10%

20%

30%

40%

50%

60%

70%

80%

Gen Y Gen X Boomers Silent All

72% 71%

63%

35%

57%

78% 75%

60%

32%

64%

2014 2015

¼ SELLERS LIST ZILLOW AS MOST USEFULWEBSITE

Q: What was the most useful website you visited during your home selling process?

25%

14%

14%

4%

GOOD VARIETY IN MARKETING PROPERTIES

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

Social media

Online

Virtual tour

Privately marketed to agent's network

Open house

MLS

13%

27%

33%

41%

63%

80%

Q: How was your property marketed?

SELLERS’ BIGGEST CONCERN:GETTING A GOOD PRICE

7.7%

13%

13%

17%

47%

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

Finding qualified buyer

Selling house

Finding new house

Selling quickly

Getting good price

Q: What were your biggest concerns as a home seller?

67% OF SELLERS RECEIVED MULTIPLE OFFERS

0%

5%

10%

15%

20%

25%

30%

35%

1 2 3 4 5+

33%

23%

20%

7.6%

16%

Q: How many offers did you receive from buyers?

SELLERS RECEIVING FEWER OFFERS

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2012 2013 2014 2015

3.1

5.9

3.33.1

Nu

mb

er

ofO

ffe

rs

Average

Q: How many offers did you receive from buyers?

MAJORITY OF SELLERS ACCEPTED HIGHESTOFFER

Q: Which offer did you accept?

9%

6%

7%

8%

16%

16%

52%

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

Other

All cash

1st received

Personal letter/appeal from buyer

Buyer's ability to close fastest

No contingencies

Highest

MAJORITY OF SELLERS ACCEPTEDHIGHEST OFFER

Q: Please rate your degree of satisfaction with your agent for each of the followingaspects on a scale of 1 to 5, where 1 is least satisfied and 5 is most satisfied.

Category All GenY Gen X Boomers Silent

Highest 52% 49% 55% 52% 52%

Buyer's ability to close fastest 16% 21% 16% 18% 4%

No contingencies 16% 13% 17% 16% 16%

Personal letter/appeal from buyer 8% 10% 9% 7% 12%

1st received 7% 1% 7% 8% 4%

All cash 6% 8% 5% 4% 20%

Other 9% 13% 7% 9% 12%

Q: Which offer did you accept?

NET CASH GAIN TO SELLERS HIGHEST SINCE 2007

$120,000

$0

$50,000

$100,000

$150,000

$200,000

$250,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015


Q. What was the net cash gain or net loss to the seller as a result of this sale?

SELLERS ARE OPTIMISTIC ABOUT FUTUREHOME PRICES

3.4%9.1%

23%15%

66% 60%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1 Year 5 Years

Down Flat Up

Q: Do you think home prices in your neighborhood will go up, down, or stay flat in 1 year? …in 5 years?

SELLERS OUTLOOK ABOUTFUTURE HOME PRICES



Up in 1 year 65% 63% 67% 65% 64%

Up in 5 years 59% 59% 58% 59% 61%

Down in 1 year 3.5% 4.7% 0.6% 4.8% 6.8%

Down in 5 years 10% 13% 8.4% 9.0% 14%

Unsure in 1 year 7% 6% 5% 8% 11%

Unsure in 5 years 16% 13% 17% 17% 16%

Q: Do you think home prices in your neighborhood will go up, down, or stay flat in 1 year? …in 5 years?

MORE THAN HALF OF ALL SELLERSARE PLANNING TO BUY ANOTHER HOME

53%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015


FEWER SELLERS MOVED OUT OF STATE

5% 6% 6%

15%

23%

34%

28%

34%

44% 44%

21%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2015

Q. In which county is your current residence located?

TOP STATES WHERE CA SELLERS HAVERELOCATED

4.3%

4.3%

5.4%

6.5%

7.0%

7.6%

8.6%

10%

0% 2% 4% 6% 8% 10% 12%

Florida

Idaho

Colorado

Oregon

Washington

Nevada

Texas

Arizona

Q: Which state?

SELLER/AGENT RELATIONSHIP

SELLERS THAT DID NOT USE AN AGENTREMAINS UNDER 5%

98.0%

96.9%

97.7%

95%

96%

97%

98%

99%

100%

2013 2014 2015

% that used an agent

Q. How did you find your real estate agent?

SELLERS NEEDED MOST HELP WITHNEGOTIATION

Q: In what part of the transaction seller needed the most assistance?

7%

10%

12%

16%

17%

18%

20%

0% 5% 10% 15% 20%

Other

Negotiating the price

Preparing transaction documents

Preparing home for sale

Marketing the property

Setting the right price

Negotiating terms of sale

MAJORITY OF SELLERS FOUND AGENT BYREFERRAL/PERSONAL CONTACT

2%

3%

4%

4%

17%

25%

29%

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

Didn't use agent

"For Sale Sign"

Internet

Online

Previous client

Referral

Personal contact


HOW SELLERS FOUND THEIR AGENT



Personal contact 29% 34% 25% 27% 43%

Referral 25% 19% 26% 27% 23%

Previous client 17% 19% 20% 15% 11%

Internet 4% 6% 2% 6% 0%

Online 4% 6% 2% 6% 0%

"For Sale Sign" 3% 5% 3% 3% 2%


70% OF SELLERS INTERVIEWED ONLY 1AGENT

0%

10%

20%

30%

40%

50%

60%

70%

80%

1 2 3 4 5+

66%

14%

7.9%

1.4% 1.5%

70 %

13%11%

2.5% 2.9%

Number of Agents

2014

2015

Q: How many agents did you interview prior to selecting the agent you used in your recent home selling process?

SELLERS INTERVIEWED SLIGHTLY MOREAGENTS

2.3 2.2

3.13.5

4.4

5.4

6.2

5.0

3.5 3.6 3.5

1.5 1.6

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Nu

mb

er

ofA

ge

nts

Average

Q: How many agents did you interview prior to selecting the agent you used in your recent home selling process?

REASON SELLER SELECTED AGENT

Trustworthy (18%)

Worked with agent on previous transaction (17%)

Recommended (17%)

Friend / acquaintance (17%)

Good reputation/successful (16%)

Fastest to respond (6%)

Q: What was the single most important reason for selecting the agent you used in your recent home sale?

REASON SELLER SELECTED AGENT



Trustworthy 18% 14% 20% 18% 10%

Worked with agentpreviously

17% 22% 19% 15% 14%

Recommended 17% 13% 15% 18% 19%

Friend/Acquaintance 17% 19% 17% 13% 29%

Good reputation 16% 16% 17% 18% 14%

Fastest to repsond 6% 6% 7% 6% 2%

Q: What was the single most important reason for selecting the agent you used in your recent home sale?

MORE SELLERS CHANGED AGENTS IN 2015

0%

10%

20%

30%

40%

50%

60%

70%

2009 2011 2012 2013 2014 2015

64%

22%

44%

31%

4.1%8.1%

Q: Did you initially list your home with an agent other than the one with whom you sold it?

AGENT / SELLER COMMUNICATION IN SYNC

0%

5%

10%

15%

20%

25%

30%

35%

40%37%

25%

20%

15%

39%

25%24%

10%

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?

AGENTS MEET RESPONSE TIME EXPECTATIONS

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Instantly Within 30Minutes

Within 1Hour

Within 2Hours

Within 4Hours

Within 1business

day

> 1 businessday

8.8%

26%

16%

10%

15%16%

6.4%5.1%

16% 16%

13%

21%

28%

1.0%

Actual Expected

Q: On average, what was the ACTUAL time in which your agent responded to your communications?

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

SELLER RESPONSE TIME EXPECTATIONS

All GenY Gen X Boomers Silent

Instantly 5.1% 4.8% 7.9% 3.9% 0%

Within 1 hour 16% 16% 17% 17% 12%

Within 2 hours 12.% 13% 8.0% 15% 19%

Within 1 business day 28% 24% 31% 26% 33%

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

SLIGHT DECLINE IN SELLER SATISFACTION


Q: Please rate your degree of satisfaction with your agent on these three things using a 1 to 5 scale where 1 is “LeastSatisfied” and 5 is “Most Satisfied”.

Category 2011 2012 2013 2014 2015

Value received for what you paid your realestate agent

3.1 3.0 3.0 4.4 3.9

Overall satisfaction with the real estateagent

2.8 2.8 2.7 4.4 4.2

Overall satisfaction with the home sellingprocess

2.6 2.5 2.6 4.4 4.0

SELLER SATISFACTION DECREASED IN 2015

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Agent Selling process

Q: Please rate your degree of satisfaction with your agent on these three things using a 1 to 5 scale where 1 is “LeastSatisfied” and 5 is “Most Satisfied”.

SELLER SATISFACTION WAS NEGATIVELY AFFECTED BYMISCOMMUNICATION OR LACK OF COMMUNICATION

1. Stayed on top of process(44%)

2.Good/excellent job (13%)

3. Agent was professional(11%)

1. Didn’t communicate well(5.6%)

2. Could have done a betterjob (5.4%)

3. Could have sold for higherprice (1.8%)

Q: Please explain why you had that level of satisfaction with your agent.

SELLER ADVICE TO AGENTS

47% • Work hard and stay on top of everything

47% • Be honest and ethical

46% • Keep client informed

34% • Listen to client needs

33% • Be up front with clients

30% • Explain the process

27% • Set the correct listing price

Q: What advice would you give to real estate agents to improve the process or level of service?

4/10 SELLERS WOULDN’T CHANGE ANYTHINGABOUT THEIR RECENT SALE

Q: If there was one thing you could change about your recent home sale, what would it be?

Sell Home for higher price (22%)

Hire a better real estate agent (13%)

Not have to sell (10%)

Sell the home faster (5%)

Do more research about selling process (4%)

CONCLUDING REMARKS

THE TAKEAWAY

– CA housing market remains strong

– Sellers are optimistic about the futurehousing market, and many want to buyanother home

– Sellers need help with negotiation

2015 Annual Housing Market Survey:An Overview of the California

Housing Market

Thursday, October 29, 2015

2:00 PM – 3:00 PM

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