2012 real estate market update
Post on 19-Oct-2014
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DESCRIPTION
Leslie Appleton-Young, Chief Economist/California Association of Realtors presents his annual report to the California Desert Association of Realtors. The Palm Springs desert area (Coachella Valley) housing market is on the upswing once again.TRANSCRIPT
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Real Estate Market Update/ 2012 FORECAST
California Desert AOR January 26, 2012Leslie Appleton-Young, Chief Economist
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Overview
US and California EconomiesCalifornia Housing MarketRegional & Local Markets2011 Annual Market Survey2012 Housing Market ForecastCA Buyers & Sellers in Today’s Housing Market
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U.S. Economic Outlook
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Economy Slowly Gaining Post-Stimulus Momentum
-8%-7%-6%-5%-4%-3%-2%-1%0%1%2%3%4%5%6%7%8%
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
Q3-
10
Q1-
11
Q3-
11
GDP 2010: 2.8% 2011:1.8% 2012: 2.6%
ANNUAL QTRLY
2009 Largest Annual Drop since 1938 (-3.4%)
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Performance Targets for National Economy
Current Target
This Year - Projected
Unemployment 6% 9.0%
US GDP 3% or higher 1.8%
Nonfarm Job Growth
3%+ or 400K+/mo 1.0%
CPI 2.5% 3.2%
SOURCE: California Association of REALTORS®
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QUARTERLY PERCENT CHANGE
Consumer Spending ReboundingHoliday and Auto Sales
Consumer Spending 2011 Q3: 2.4%
SOURCE: US Dept of Commerce, Bureau of Economic Analysis
-4%
-2%
0%
2%
4%
6%
8%
1Q-2
000
1Q-2
001
1Q-2
002
1Q-2
003
1Q-2
004
1Q-2
005
1Q-2
006
1Q-2
007
1Q-2
008
1Q-2
009
1Q-2
010
1Q-2
011
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INDEX, 100=1985
Consumer Confidence: Nov/Dec ReboundHoliday Shoppers & Improved Jobs Reports
December 2011: 64.5
20
40
60
80
100
120
140
160
Jan-
00
Jul-0
0
Jan-
01
Jul-0
1
Jan-
02Ju
l-02
Jan-
03
Jul-0
3
Jan-
04
Jul-0
4
Jan-
05
Jul-0
5
Jan-
06Ju
l-06
Jan-
07Ju
l-07
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11Ju
l-11
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CA Underwater Mortgages:Reverse Wealth Effect
SOURCE: CoreLogic
30.2%
4.6%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Q4‐2009
Q1‐2010
Q2‐2010
Q3‐2010
Q4‐2010
Q1‐2011
Q2‐2011
Negative Equity Share in CA Near Negative Equity Share in CA
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Unemployment: Heading Lower U.S. at 3 year low
December 2011
SOURCE: CA Employment Development Division
0%
2%
4%
6%
8%
10%
12%
14%
Jan-
00
Jan-
01
Jan-
02
Jan-
03
Jan-
04
Jan-
05
Jan-
06
Jan-
07
Jan-
08
Jan-
09
Jan-
10
Jan-
11
CA US
California (11.1%) vs. United States (8.5%)
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-1,000,000
-800,000
-600,000
-400,000
-200,000
0
200,000
400,000
600,000
Jan-
08
Apr
-08
Jul-0
8
Oct
-08
Jan-
09
Apr
-09
Jul-0
9
Oct
-09
Jan-
10
Apr
-10
Jul-1
0
Oct
-10
Jan-
11
Apr
-11
Jul-1
1
Oct
-11
U.S. Non-farm Job Growth: Gaining!
SOURCE: US Dept of Labor, Bureau of Labor Statistics
Month-to-Month Changes
Recession Job Losses: 8.8 millionSince Jan’10: +2.4 million
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-160000-140000-120000-100000
-80000-60000-40000-20000
020000400006000080000
100000
Jan-
08M
ar-0
8M
ay-0
8Ju
l-08
Sep-
08N
ov-0
8Ja
n-09
Mar
-09
May
-09
Jul-0
9Se
p-09
Nov
-09
Jan-
10M
ar-1
0M
ay-1
0Ju
l-10
Sep-
10N
ov-1
0Ja
n-11
Mar
-11
May
-11
Jul-1
1Se
p-11
Nov
-11
California Non-farm Job Growth
SOURCE: CA Employment Development Division
Month-to-Month ChangesRecession Job Losses: 1.3 million
Since Jan’10: +282,000
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Where are California’s Jobs? Employment Trends:
Construction & Financial Sectors Biggest Losers
SOURCE: California Association of REALTORS®
Industry 2005 Jul-11 Year to Date
Mining and Logging 23,600 27,600 4,000Construction 905,300 567,300 -338,000Manufacturing 1,502,600 1,257,600 -245,000Trade, Transportation & Utilities 2,822,100 2,641,500 -180,600Information 473,600 455,400 -18,200Financial Activities 920,300 755,800 -164,500Professional & Business Services 2,160,700 2,136,200 -24,500Educational & Health Services 1,593,400 1,837,000 243,600Leisure & Hospitality 1,475,200 1,531,600 56,400Other Services 505,500 484,500 -21,000Government 2,420,200 2,380,200 -40,000TOTAL 14,802,500 14,074,700 -727,800
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CA New Housing Permits2011: 47,015 units, Up 5.0% from 2010
0
50,000
100,000
150,000
200,000
250,000
300,00019
88
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
Single Family Multi-Family
SOURCE: CBIA
Household Growth: 220,000-250,000/yr
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SOURCE: Federal Home Loan Mortgage Corporation
Classic Liquidity Trap: Consumers DeleveragingLow Rates and Tight Credit
Fed easing through 2012
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
Jan-
00
Jan-
01
Jan-
02
Jan-
03
Jan-
04
Jan-
05
Jan-
06
Jan-
07
Jan-
08
Jan-
09
Jan-
10
Jan-
11
FRMARMFederal Funds
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US Deficit Highest in Decades2010: 11% of GDP (Revenues – Expenses)
‐12.0%
‐10.0%
‐8.0%
‐6.0%
‐4.0%
‐2.0%
0.0%
2.0%
4.0%1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
Deficit as a % of GDP
Source: US Treasury, BEA, compiled by C.A.R.Note: Positive = Surplus
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Federal Issues – Critical Concerns for the REALTOR Party
Future of Fannie and Freddie? FHA?
Tax Reform on the horizon – Mortgage Interest
Deduction?
QRM (Qualified Residential Mortgage)
20% Down requirement -- Is the future of the
30 year mortgage in doubt?
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U.S. Economic Outlook
•2005 2006 2007 2008 2009 2010 2011f 2012f
US GDP 3.1% 2.7% 2.0% 0.0% -2.6% 2.9% 1.8% 2.6%
Nonfarm Job Growth 1.7% 1.8% 1.1% -0.6% -4.4% -0.7% 1.0% 0.9%
Unemployment 5.1% 4.6% 4.6% 5.8% 9.3% 9.6% 9.0% 8.9%
CPI 3.4% 3.2% 2.8% 3.8% -0.4% 1.6% 3.2% 2.3%
Real Disposable Income, % Change
1.3% 4.0% 2.2% 0.5% 0.9% 1.4% 1.7% 1.5%
SOURCE: California Association of REALTORS®Forecast Date: January 2012
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California Economic Outlook
•2005 2006 2007 2008 2009 2010 2011f 2012f
Nonfarm Job Growth 1.8% 1.7% 0.8% -1.3% -6.0% -1.4% 1.5% 2.1%
Unemployment Rate 5.4% 4.9% 5.4% 7.2% 11.4% 12.4% 12.0% 11.2%
Population Growth 1.2% 1.1% 1.1% 1.2% 1.1% 0.9% 0.9% 0.9%
Real Disposable Income, % Change
1.3% 3.4% 1.5% 0.1% -2.2% 1.6% 1.5% 2.0%
SOURCE: California Association of REALTORS®
Forecast Date: January 2012
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California Housing Market
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Sales Hit Bottom 4 Years Ago Median Price 2011 = 2002
“Lost Decade” UNITS/MEDIAN PRICE $
SOURCE: California Association of REALTORS®
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
Sales of Existing Detached Homes Median Price
-61% -25%
-44%
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Sales of Existing Detached Homes and Pacific West Consumer Confidence• California, December 2011 Sales: 520,940 Units, Up 1.1% YTD, Up 0.1% YTY
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
Jan-
00
Jan-
01
Jan-
02
Jan-
03
Jan-
04
Jan-
05
Jan-
06
Jan-
07
Jan-
08
Jan-
09
Jan-
10
Jan-
11
0
20
40
60
80
100
120
140
160
Sales Consumer Confidence INDEXUNITS
SOURCE: California Association of REALTORS®; The Conference Board
*Sales are seasonally adjusted and annualized
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INDEX, 100 = 03/16/90
Mortgage Loan Applications for PurchaseJanuary 20, 2012: 184.8
0
100
200
300
400
500
600
Jan-
90
Jan-
91
Jan-
92
Jan-
93
Jan-
94
Jan-
95
Jan-
96
Jan-
97
Jan-
98
Jan-
99
Jan-
00
Jan-
01
Jan-
02
Jan-
03
Jan-
04
Jan-
05
Jan-
06
Jan-
07
Jan-
08
Jan-
09
Jan-
10
Jan-
11
Jan-
12
Source: Mortgage Bankers Association
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Source: Mortgage Bankers Association
Mortgage Applications – Total Purchase Loans (Weekly % Chg.)
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
Jan-
11
Feb-
11
Mar
-11
Apr
-11
May
-11
Jun-
11
Jul-1
1
Aug
-11
Sep-
11
Oct
-11
Nov
-11
Dec
-11
Jan-
12
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P: May-07$594,530
T: Feb-09$245,230
-59% frompeak
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000Ja
n-00
Jan-
01
Jan-
02
Jan-
03
Jan-
04
Jan-
05
Jan-
06
Jan-
07
Jan-
08
Jan-
09
Jan-
10
Jan-
11
Median Price of Existing Detached HomesCalifornia, December 2011: $285,920, Down 6.2% YTY
SOURCE: California Association of REALTORS®
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Trough vs. Current Price – December 2011Southern California
Region Trough Month
Trough Price
Dec-11 Median
% Chg From Trough
San Bernardino County May-09 $120,410 $128,450 6.7%Ventura Couty Feb-09 $359,630 $391,060 8.7%Orange County Jan-09 $442,170 $484,630 9.6%San Diego County Mar-09 $326,830 $359,930 10.1%Palm Springs/Lower Desert Apr-09 $150,140 $165,960 10.5%Inland Empire Apr-09 $150,860 $172,430 14.3%CALIFORNIA Feb-09 $245,230 $285,920 16.6%Southern California Apr-09 $246,063 $286,950 16.6%Los Angeles Metro Apr-09 $227,370 $265,830 16.9%Riverside County Apr-09 $171,480 $203,650 18.8%Los Angeles County May-09 $248,850 $306,950 23.3%
SOURCE: California Association of REALTORS®
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Unsold Inventory IndexCalifornia, December 2011: 4.2 Months
0
2
4
6
8
10
12
14
16
18
20
Jan-
88
Jan-
89
Jan-
90
Jan-
91Ja
n-92
Jan-
93
Jan-
94
Jan-
95
Jan-
96Ja
n-97
Jan-
98
Jan-
99
Jan-
00
Jan-
01
Jan-
02Ja
n-03
Jan-
04
Jan-
05
Jan-
06
Jan-
07Ja
n-08
Jan-
09
Jan-
10
Jan-
11
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
MONTHS
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Tight Supply of Inventory for REO Sales
0123456789
Equity Sales REO Sales Short Sales
6.7
2.7
8.9
2011Unsold Inventory Index (Months)
SOURCE: California Association of REALTORS®
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Price Range (Thousand) Dec-10 Nov-11 Dec-11
$1,000K+ 8.2 9.6 8.3$750-1000K 5.7 7.0 5.9$500-750K 4.7 6.0 4.5$300-500K 4.9 5.3 4.4$0-300K 4.9 4.7 3.9
Higher Price = Higher Inventory Unsold Inventory Index
(Months of Supply)
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
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California’s Million-Dollar Home Sales
2252918,621
24,43642,506
50,01054,773
36,99020,595
15,70310,658
13,1018,9065,366
3,7622,6512,0172,5222,2982,8903,3623,7734,271
2,7180
1000
0
2000
0
3000
0
4000
0
5000
0
6000
0
19881989199019911992199319941995199619971998199920002001200220032004200520062007200820092010
Source: DataQuick Information Systems
Year
Number of Homes
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Market Breakdown: Equity v. Distressed
Sales
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REOs, 24.6%
Short Sales, 22.2%
Other Distressed Sales (Not
Specified), 0.5%
Equity Sales, 52.7%
Dec‐11
Share of Distressed Sales to Total Sales
SOURCE: California Association of REALTORS®
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SOURCE: ForeclosureRadar.com
0%
10%
20%
30%
40%
50%
60%
Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11
Equity Sales Short Sale Bank Owned
Share of Equity Sales Increased Throughout 2011
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SOURCE: California Association of REALTORS®
Distressed Sales: Southern California(Percent of Total Sales)
0%
20%
40%
60%
80%
100%
Los AngelesOrange
RiversideSan
Bernardino San Diego
49%
42%
63% 67%
28%
Dec-11
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SOURCE: California Association of REALTORS®
REO & Short Sales: Southern California(Percent of Total Sales)
0%
20%
40%
60%
80%
100%
Los AngelesOrange
RiversideSan
Bernardino San Diego
21%15%
31%47%
18%
27%
26%
31%19%
10%
Dec 2011
Short Sales
REO Sales
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Mortgage Foreclosure & Delinquency RatesCalifornia: Q3-2011
7.6%
3.6%
0%
2%
4%
6%
8%
10%
12%
Q1/
74Q
2/75
Q3/
76Q
4/77
Q1/
79Q
2/80
Q3/
81Q
4/82
Q1/
84Q
2/85
Q3/
86Q
4/87
Q1/
89Q
2/90
Q3/
91Q
4/92
Q1/
94Q
2/95
Q3/
96Q
4/97
Q1/
99Q
2/00
Q3/
01Q
4/02
Q1/
04Q
2/05
Q3/
06Q
4/07
Q1/
09Q
2/10
Q3/
11
Delinquency Rate Foreclosure Rate
SOURCE: Mortgage Bankers Association
Delinquencies: Long Run Average: 4.4%
Foreclosure Rate: Long Run Average: 1.2%
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California Foreclosure Outcomes, Dec. 2011REO: -16.4% YTD • 3rd Party: +5.0% YTD • Cancel: -13.1% YTD
0
5,000
10,000
15,000
20,000
25,000
30,000
Jan-
07
Apr
-07
Jul-0
7
Oct
-07
Jan-
08
Apr
-08
Jul-0
8
Oct
-08
Jan-
09
Apr
-09
Jul-0
9
Oct
-09
Jan-
10
Apr
-10
Jul-1
0
Oct
-10
Jan-
11
Apr
-11
Jul-1
1
Oct
-11
REOs Sold to 3rd Party Cancellations
SOURCE: ForeclosureRadar.com
6 Month Average:
REO: 8,950
3rd Party: 3,353
Cancelled: 13,243
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California Foreclosure Inventories, Dec. 2011Preforeclosure: -19.7% YTD • Schedule for Sale: -21.7% YTD •
Bank Owned: 0.6% YTD
0
50,000
100,000
150,000
200,000
Jan-
07
Apr
-07
Jul-0
7
Oct
-07
Jan-
08
Apr
-08
Jul-0
8
Oct
-08
Jan-
09
Apr
-09
Jul-0
9
Oct
-09
Jan-
10
Apr
-10
Jul-1
0
Oct
-10
Jan-
11
Apr
-11
Jul-1
1
Oct
-11
Preforeclosure Scheduled for Sale Bank Owned
SOURCE: ForeclosureRadar.com
6 Month Average:
Preforeclosure: 109,200
Schedule for Sale: 89,029
Bank Owned: 100,887
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ForeclosuresSouthern California
0
10
20
30
40
50
60
Q1/
84Q
1/85
Q1/
86Q
1/87
Q1/
88Q
1/89
Q1/
90Q
1/91
Q1/
92Q
1/93
Q1/
94Q
1/95
Q1/
96Q
1/97
Q1/
98Q
1/99
Q1/
00Q
1/01
Q1/
02Q
1/03
Q1/
04Q
1/05
Q1/
06Q
1/07
Q1/
08Q
1/09
Q1/
10Q
1/11
SOURCE: Real Estate Research Council
THOUSANDS
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Palm DesertPreforeclosure: 199 • Auction: 123 • Bank Owned: 88
Source: ForeclosureRadar.com as of 01/19/2012.
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La QuintaPreforeclosure: 159 • Auction: 138 • Bank Owned: 100
Source: ForeclosureRadar.com as of 01/19/2012.
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IndioPreforeclosure: 315 • Auction: 205 • Bank Owned: 157
Source: ForeclosureRadar.com as of 01/19/2012.
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SacramentoPreforeclosure: 2,216 • Auction: 1,905 • Bank Owned: 1,560
Source: ForeclosureRadar.com as of 08/19/11
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SacramentoPreforeclosure: 2,216 • Auction: 1,905 • Bank Owned: 1,560
Source: ForeclosureRadar.com as of 08/19/11
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SacramentoPreforeclosure: 2,216 • Auction: 1,905 • Bank Owned: 1,560
Source: ForeclosureRadar.com as of 08/19/11
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SacramentoPreforeclosure: 2,216 • Auction: 1,905 • Bank Owned: 1,560
Source: ForeclosureRadar.com as of 08/19/11
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Local Market Conditions
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Sales of Residential PropertiesPalm Desert, 2011: 1,514 Units, Up 7.4% YTY
SOURCE: Clarus Market Metrics
020406080
100120140160180
Jan
Feb
Mar
Apr
May Ju
n
Jul
Aug
Sept Oct
Nov Dec
2010
2011
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Sales of Residential HomesPalm Desert, December 2011: 121 Unit
, Up 17.5% MTM, Down 2.4% YTY
SOURCE: Clarus Market Metrics
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Median Price of Residential HomesPalm Desert, December 2011: $265,000
Up 6.0% MTM, Down 8.5% YTY
SOURCE: Clarus Market Metrics
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Sales of Residential PropertiesLa Quinta, 2011: 1,353 Units, Up 5.5% YTY
SOURCE: Clarus Market Metrics
0
20
40
60
80
100
120
140
160Ja
n
Feb
Mar
Apr
May Jun
Jul
Aug
Sept Oct
Nov Dec
2010
2011
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Sales of Residential HomesLa Quinta, December 2011: 129 Units
Up 51.8% MTM, Up 18.3% YTY
SOURCE: Clarus Market Metrics
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Median Price of Residential HomesLa Quinta, December 2011: $285,000
Down 9.8% MTM, Up 0.4% YTY
SOURCE: Clarus Market Metrics
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Sales of Residential PropertiesIndio, 2011: 1,461 Units, Down 2.1% YTY
SOURCE: Clarus Market Metrics
020406080
100120140160180200
Jan
Feb
Mar
Apr
May Ju
n
Jul
Aug
Sept Oct
Nov Dec
2010
2011
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Sales of Residential HomesIndio, December 2011: 125 UnitsUp 26.3% MTM, Down 4.6% YTY
SOURCE: Clarus Market Metrics
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Median Price of Residential HomesIndio, December 2011: $159,900Up 6.6% MTM, Down 8.6% YTY
SOURCE: Clarus Market Metrics
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2011 Annual Housing Market Survey
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Equity vs. REO vs. Short SalesEquity Sales REO Sales Short Sales
Share of Total Sales 58.7% 19.7% 20.2%
Median Home Price $431,000 $240,000 $287,000
Square Footage 1,783 1,500 1,600
Price / SF $250 $112 $175
Sales‐to‐List Price Ratio 95.9% 98.0% 95.9%
% of Sales With Multiple Offers 35.2% 58.3% 57.5%
Avg. Number of Offers 3.0 3.0 3.6
% of All Cash Sales 25.5% 34.0% 23.3%
Days on MLS 67 50 141
Days in Escrow 35 35 45
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Proportion of Sellers Planning to Repurchase
0%
10%
20%
30%
40%
50%
60%
70%
80%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Q. Is the seller planning on purchasing another home?
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Reasons Sellers Not Planning to Buy Another Home
Q. Why is the seller not planning to purchase another home?
2.7%
4.7%
4.9%
5.7%
10.9%
11.4%
19.8%
0% 10% 20% 30% 40% 50%
Seller is a lender/bank
Seller prefers to have less financial obligation
Poor credit background
Lack of cash for down payment
Out of work/unemployment
Decide to live with family/friends
Waiting for market to bottom
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Reasons For SellingAll Home Sellers
0% 5% 10% 15% 20% 25% 30% 35%
Foreclosure/ShortSale/Default
Change in Family Status
Retirement/Move toRetirement Community
Investment/ TaxConsderations
Desired Better Location
Desired Smaller Home
Changed Jobs
Desired Larger Home
Other
Q. What was the single most important reason for selling/buying the property?
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Investments & Second/Vacation Homes
0%
5%
10%
15%
20%
25%
17%
7%
Investment/Rental Property Vacation/Second Home
![Page 63: 2012 Real Estate Market Update](https://reader034.vdocuments.us/reader034/viewer/2022051411/5443cd0cafaf9fa0098b462f/html5/thumbnails/63.jpg)
Foreign Buyers
8%
5% 6%6%
0%
2%
4%
6%
8%
10%
2008 2009 2010 2011
% of Foreign Buyers
Q. Was the buyer a foreign buyer?
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California Housing Market Forecast
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Forecast Progress Report
2010 Projected October 2010
2010 Actual
2011 Forecast October 2010
2011 Projected
SFH Resales (000s)
492.0 491.5 502.0 491.1
% Change ‐10.0% ‐10.1% 2.0% ‐0.1%Median Price ($000s)
$306.5 $303.1 $312.5 $291.0
% Change 11.5% 10.2% 2.0% ‐4.0%
Source: CALIFORNIA ASSOCIATION OF REALTORS®
Forecast Date: September 2011 vs October 2010
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California Housing Market Outlook2005 2006 2007 2008 2009 2010 2011f 2012f
SFH Resales (000s) 625.0 477.5 346.9 441.8 546.9 491.5 491.1 496.2
% Change 0.03% -23.6% -27.3% 27.3% 23.8% -10.1% -0.1% 1.0%Median Price ($000s)
$522.7 $556.4 $560.3 $348.5 $275.0 $303.1 $291.0 $296.0
% Change 16.0% 6.5% 0.7% -37.8% -21.1% 10.2% -4.0% 1.7%
30-Yr FRM 5.9% 6.4% 6.3% 6.0% 5.1% 4.7% 4.5% 4.7%
1-Yr ARM 4.5% 5.5% 5.6% 5.2% 4.7% 3.5% 3.0% 3.1%
Source: CALIFORNIA ASSOCIATION OF REALTORS®
Forecast Date: September 2011
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Real Estate Buyers & Sellers in Today’s
Market
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How Buyers Found Home- 2011 -
Q. How did you find the home your purcahsed?
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The Buying Experience
Considered buying for over 4 monthsShopped 2.5 months before contacting agentViewed 12 homes in 8 weeks with agent76% of buyers didn’t close escrow on time49% owned previous homeMotivated by price decreases, low mortgage rates and tax deductions80% found home through agent
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The Selling Experience
Home was listed more than 2 months before opening escrowMedian escrow length was 1.5 monthsOnly 40% of sellers said their escrow closed on time20% of sellers used electronic signature
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Why Buyers Chose their Agent
1. Most responsive (28%)2. Worked with agent before (18%)3. First to respond (17%)4. Most aggressive (16%)5. Most knowledgeable (6%)
Q. What was the single most important reason for selecting the agent that you used in your recent home purchase?
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Why Sellers Chose their Agent
1. First to Respond (21%)2. Seemed most responsive (21%)3. Seemed most aggressive (19%)4. Worked with agent before (16%)5. Understanding of distressed properties (6%)
Q. What was the single most important reason for selecting the agent that you used in your recent home purchase?
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Buyer Method of Communicating With Agent
Q. What was your preferred method of communicating with your agent? How did your agent actually communicate with you?
Preferred ActualE-mail 73% 70%Telephone 37% 50%Text message 32% 1%Twitter 21% 0%Facebook 14% 0%In-person 6% 3%
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Agent / Seller Communication Gap
69%64%
26%18%
6%5%
73%
1%
47%
3%
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?
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Buyer Expected vs Actual Agent Response Time
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Instantly Within30mins.
Within 1hr.
Within 2hrs.
Within 4hrs.
Same day 1businessday
37%28%
15%11% 8%
2% 0%
18%
7% 6%
37%
13% 16%
4%
Expected Actual
Q. What was the typical response time you expected from your agent to return any form of communication to you?
Q. On average, what was the actual response time of your agent to return any form of communication to you?
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Seller Response Time is of the Essence
0%5%
10%15%20%25%30%35%40%45%
Instantly Within 30 Minutes
Within 1 Hour
Within 2 Hours
Within 4 Hours
Same day 1 business
day
Actual Expected
Q: On average, what was the ACTUAL time of your agent to return any form of communication to you?
Q: What was the typical response time you EXPECTED from your agent to return any form of communication with you?
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Buyer Reasons for Satisfaction With Agent
1. Worked hard on my behalf (55%)2. Helped find the best home for me (55%)3. Always quick to respond (31%)4. Negotiated good deal on my behalf (29%)5. Listened to what we needed (20%)
Q. Why do you have that level of satisfaction with your agent?
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Buyer Reasons for Dissatisfaction With Agent
1. Slow to respond (51%)2. Communication problems (19%)3. Didn’t communicate effectively during
transaction (14%)4. Didn’t negotiate aggressively on my behalf
(12%)5. Wasted time with homes I’m not likely to buy
(3%)Q. Why do you have that level of satisfaction with your agent?
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What Buyers Would Like to Change About their Home Buying Experience
1. Faster response from agent (30%)
2. Better agent negotiation (27%)
3. Better agent communication (25%)
4. Better market direction understanding (19%)
5. Escrow close on time (9%)
Q. If there is one thing you would like to change about your home buying experience, what would that be?
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Quick Facts About Buyers
• 59% found their agent online• 51% Googled their agent• 52% used social media in the buying process• 93% are receptive to receiving information via
social media
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How Internet Was Used
Activity Percentage of Buyers
Preview homes to narrow search 75%
Find an agent 68%
Identify homes for agent to show 47%
Find a real estate firm 40%
Learn about neighborhoods 33%
Get information about financing & downpayments 33%
Q. For which of the following did you use the internet as a part of your home buying process?
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Buyer Importance of OnlineFeatures in Home Viewing
Q. Please rate the following online features by the level of importance in your home viewing on a scale of one to five, with five being extremely important and one being not at all important.
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Top 10 Websites Used
Real estate agent websiteQ. Which websites did you use as part of your home buying process?
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52% of Buyers Used Social Media
Activity Percent of Buyers Who Engaged in Activity
Agent referrals 33%
Video home tours 26%
Agent Facebook page 24%
Home buying tips 23%
Comments on neighborhoods 21%
Neighborhood lifestyle 20%
Q. How did you use social media (such as Facebook, Twitter, LinkedIn, etc.) in your home buying process?
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77% of Sellers Used Social Media
Q: Which social media websites did you use to learn more about and communicate with real estate agents and companies?
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Closing Thoughts
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Direction of Home Prices: Sellers Skeptical; Buyers Hopeful
0%
20%
40%
60%
80%
100%
Sellers Buyers
Down Flat Unsure Up
Q: Do you think home prices in your neighborhood will go up, down or stay flat in one year, five years and 10 years?
![Page 88: 2012 Real Estate Market Update](https://reader034.vdocuments.us/reader034/viewer/2022051411/5443cd0cafaf9fa0098b462f/html5/thumbnails/88.jpg)
Real Estate: It’s Time To Buy Again
SOURCE: “Real estate: It’s time to buy again” Fortune Magazine’s 3/28/11 article written by Shawn Tully
“Forget stocks. Don't bet on gold. After four years of plunging home prices, the most attractive asset class in America is housing.”
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8 in 10 Americans Agree Buying a Home is the Best Investment One Can Make
SOURCE: Pew Research Center’s “Home Sweet Home. Still. Five Years After the Bubble Burst”
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8 in 10 Renters Would Like to Buy in the Future
“…renters are hardly immune to the allure of homeownership, even in the face of the five-year decline in prices. Asked if they rent out of choice or because they cannot afford to buy a home, just24% say they rent out of choice.”
SOURCE: Pew Research Center’s “Home Sweet Home. Still. Five Years After the Bubble Burst”
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C.A.R. Strategic Planning Books