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A Good Year for the California Housing Market so Far, How did we Get there?

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.

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A Good Year for the California Housing Market so Far, How did we Get there?

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  1. A Good Year for the California Housing Market so Far, How did we Get there? October 31, 2013 Oscar Wei, Senior Research Analyst

  2. California housing market Outlook

  3. Sales of Existing Detached Homes • California, Sept. 2013 Sales: 412,880 Units, -3.1% YTD, -2.6% YTY SERIES: Sales of Existing Single Family Homes SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® *Sales are seasonally adjusted and annualized

  4. Median Price of Existing Detached Homes • California, September 2013: $428,810, Up 24.4% YTY SERIES: Median Price of Existing Single Family Homes SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  5. 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. SERIES: Unsold Inventory Index of Existing Single Family Homes SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  6. Change in Inventory by Price Range • (Year-to-Year) SERIES: Unsold Inventory Index of Existing Single Family Homes SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  7. Supply of Inventory Remained Tight, But Continued to Improve • California: September 2013 UNSOLD INVENTORY INDEX (MONTHS) SERIES: Distressed Unsold Inventory Index SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  8. For the 5th Month in a Row, the Supply of Distressed Sales Improved UNSOLD INVENTORY INDEX (MONTHS) SERIES: Distressed Months Supply of Inventory SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  9. California Housing Market Outlook SERIES: CA Housing Market Outlook SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  10. Sales Bounce back in 2014, as Price Continues to Grow Units (Thousand) Price (Thousand) SERIES: CA Housing Market Outlook SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  11. CA: Dollar Volume Steadily Improving Up 25.3% in 2013, Up 9.3% in 2014 $ in Billion % Change -60% SERIES: CA Housing Market Outlook SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  12. 2013 Annual Housing Market Survey

  13. 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.

  14. Supply Shortage Creates More Market Competition • Share of home sales with multiple offers is the highest in at least the last 15 years SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  15. Market Competition Leads to More Sales with Above Asking Price Long Run Average = 18%

  16. Market Competition Leads to More Sales with Above Asking Price

  17. Equity Sales vs. REO vs. Short Sales (2013) SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  18. Equity Sales (2011 vs. 2012 vs. 2013) SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  19. REO Sales (2011 vs. 2012 vs. 2013) SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  20. Short Sales (2011 vs. 2012 vs. 2013) SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  21. Share of Cash Buyers decreases for the first time after 7 years of continuous Increase • Over a quarter of buyers paid with all cash • The share of all cash buyers had been on the rise until this year SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  22. Demand for Investment & Second/ Vacation Homes Rises from Last Year’s Dip 6% 19% SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  23. For Those Who Purchased an Investment Property: 18% Investment to Flip 82% Rental Property SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  24. For Those Who Purchased an Investment Property: 2012 2013 Equity Sales REO Sales Short Sales

  25. Home Buyer Profile (By Type of Sales) - 2012 SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  26. Home Buyer Profile (By Type of Sales) - 2013 SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  27. Home Buyer Profile (By Type of Sales) - 2013 SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  28. More Distressed Sales Are Being Absorbed by Investors Overtime SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  29. Share of First-Time Buyers is the Lowest Since 2006 Long Run Average = 38% Q. Was the buyer a first-time buyer? SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  30. Reasons for Buying Q. What was the single most important reason for buying the property? SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  31. Reasons For Buying First Time Homebuyers Vs. Repeat Homebuyers Q. What was the single most important reason for selling/buying the property? SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  32. First-Time Buyers Bought Because They Were Tired of Renting, Highest in Three Years Q. Was the buyer a first-time buyer? SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  33. The Median Down Payment Up 8% from 2012, As Home Prices Continue to Increase Q. What was the amount of downpayment? SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  34. Median Down PaymentFirst-Time Homebuyers Vs. Repeat Homebuyers Q. What was the amount of downpayment? SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  35. Cash Source for Down PaymentFirst-Time Buyer vs. Repeat Buyer Q. What was the source of the cash the buyer used for a downpayment or to purchase the residence? SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  36. 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? SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  37. International Buyers are Getting a Bigger Slice of the Market than Last Year. Q. Was the buyer an international buyer – a person who was a citizen of another country who wished to purchase residential real estate in the U.S.? SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  38. Country of International Buyer • China (34%) • Canada (10%) • Mexico (15%) SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  39. REALTORS® Worked with International Buyers in the Past 12 Months % Who Sold to International Buyers # of Properties Sold to International Buyers in the Last 12 Months Q. How many properties have you sold to an international buyer in the last 12 months? SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  40. Reasons For Selling Q. What was the single most important reason for selling the property? SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  41. 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? SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  42. Reasons For Selling Home (2013)Equity vs. REO vs. Short Sales Q. What was the single most important reason for selling the property? SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  43. Seller Household FormationEquity vs. REO vs. Short Sales SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  44. After Reaching a Record Low in 2012, the Median Net Cash Gain to Sellers Bounced Back. Q. What was the net cash gain or net loss to the seller as a result of this sale? SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  45. Sellers with Net Cash Loss Dropped to the Lowest Level since 2007 Long Run Average = 12.8% Q. What was the net cash gain or net loss to the seller as a result of this sale? SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  46. Home Seller Profile(By Type of Sales) SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  47. More Sellers Are Planning to Buy Another Home As the Market Slowly Recovers Q. Is the seller planning on purchasing another home? SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  48. For Those Who Do Not Plan to Repurchase, Here Are Their Top 5 Reasons: SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  49. Reasons Sellers Not Planning to Buy Another Home(2012) Q. Why is the seller not planning to purchase another home? SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

  50. Reasons Sellers Not Planning to Buy Another Home (2013) Q. Why is the seller not planning to purchase another home? SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

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