2014 Annual Housing Market Survey

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 26,674 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 2014. The survey instrument was a questionnaire with both multiple choice and open-ended questions. There were 1,458 valid survey responses, equivalent to a response rate of 5.5 percent. The margin of error for this survey was +/- 2.6 percent at a 95 percent confidence level.

Demand for Investment & Second/ Vacation Homes Drops to the Lowest level since 2010 % to Total Sales 5% Long Run Average: 12 % With home prices increasing at double-digit rates for two consecutive years and housing inventory continued to deplete in the distressed market, many investors decided to pull out of the housing market. As such, the demand for investment properties in 2014 dropped to the lowest level since 2010. Fifteen percent of all sales went to investors (as compared to 19 percent in 2013), and five percent went to second or vacation homebuyers (as compared to 6 percent in 2013). In 2000, they were 7 percent and 5 percent respectively. While the share of investor sales in 2014 dropped to the lowest level in the last four years, it was still higher than the long-run average of 12 percent recorded since 1999. 15% SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

More Distressed Sales Are Being Absorbed by Investors Overtime SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Buying to Rent: Winning Investment Strategy 2013: 18% 2014: 30% Investment to Flip 2013: 82% 2014: 70% For those who purchased an investment property, 70 percent bought it as a rental property and the rest of them bought it as an investment to flip. Investors who bought their investment property to flip jumped from 18 percent in 2013, but still significantly lower than those who bought the property to rent it out. Rental Property

For Those Who Purchased an Investment Property: 2011 2012 2013 2014 Investment Flip – 15% Flip – 20% Flip – 12% Flip – 23% Rent – 85% Rent – 80% Rent – 88% Rent – 77% Equity Sales Investment Flip – 14% Flip – 9% Flip – 26% Flip – 62% Rent – 86% Rent – 91% Rent – 74% Rent – 38% Distressed Sales Investors who purchased a distressed property are more likely to flip the property than investors who purchased an equity sale.

Equity Sales vs. REO vs. Short Sales (2014) REO Sales Short Sales Share of Total Sales 93.5% 2.5% 3.6% Median Home Price $479,000 $280,000 $277,500 Square Footage 1,700 1,500 1,400 Price / SF $294 $143 $183 Sales-to-List Price Ratio 100.0% 99.1% % of Sales With Multiple Offers 51.4% 82.6% 65.0% Avg. Number of Offers 4.2 6.5 4.6 % of All Cash Sales 21.7% 30.8% Days on MLS 15 20 30 Days in Escrow 32 52 Over nine of ten sales are equity sales Distressed properties are less expensive/better value = More competition in the distressed market Short sales continue to take a longer time to close as the approval process remains a drag SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Equity Sales (2011 - 2014) 2011 2012 2013 2014 Share of Total Sales   2011 2012 2013 2014 Share of Total Sales 58.7% 64.7% 80.8% 93.5% Median Home Price $431,000 $448,000 $456,635 $479,000 Square Footage 1,783 1,750 1,678 1,700 Price / SF $250 $243 $270 $294 Sales-to-List Price Ratio 95.9% 97.3% 100.0% % of Sales With Multiple Offers 35.2% 50.9% 69.0% 51.4% Avg. Number of Offers 3.0 4.0 5.2 4.2 % of All Cash Sales 25.5% 27.3% 25.2 21.7% Days on MLS 67 32 10 15 Days in Escrow 35 30 The share of equity sales has been growing steadily as the housing market continued to improve. The market remained competitive as is evident in the increase in the sales-to-list price ratio and the high percentage of sales with multiple offers. SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

REO Sales (2011 - 2014) 2011 2012 2013 2014 Share of Total Sales 19.7% 12.3% 4.9% 2.5% Median Home Price $189,500 $185,000 $175,500 $280,000 Square Footage 1,500 1,400 Price / SF $112 $116 $101 $143 Sales-to-List Price Ratio 98.0% 100.0% 99.1% % of Sales With Multiple Offers 58.3% 70.8% 91.2% 82.6% Avg. Number of Offers 4.3 4.2 7.4 6.5 % of All Cash Sales 34.0% 43.1% 50.0% 21.7% Days on MLS 50 30 15 20 Days in Escrow 35 45 32 The share of REO sales declined further to less than 3 percent in 2014, after dropping to 4.9 percent in 2013. The median home price for REO sales and the median price per square foot, meanwhile, surged by more than 40 percent when compared to 2013. REO properties, nevertheless, remained the best bargain in the market, and the market competition was still the most intense in the REO market. More than eight of ten REO sales received multiple offers, as compared to nine of ten in 2013. SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Short Sales (2011 - 2014) 2011 2012 2013 2014 Share of Total Sales 20.2% 21.7% 14.0% 3.6% Median Home Price $287,000 $235,000 $276,500 $277,500 Square Footage 1,600 1,650 1,400 Price / SF $175 $154 $146 $183 Sales-to-List Price Ratio 95.9% 99.9% 103.0% 100.0% % of Sales With Multiple Offers 57.5% 66.1% 75.7% 65.0% Avg. Number of Offers 3.6 4.3 7.1 4.6 % of All Cash Sales 23.3% 26.7% 35.7% 30.8% Days on MLS 141 90 14 30 Days in Escrow 45 50 60 52 With home price increasing sharply in the last couple years, many properties that were considered “underwater” were no longer “underwater”. Many of those homeowners did not have to sell their home as a short sale. As such, the share of short sales dropped significantly from 14 percent in 2013 to 3.6 percent in 2014 The short sale market was not as competitive as the REO market, but almost two-thirds of the sales received multiple offers. The time it takes to close an escrow remained relatively high when compared to equity sales and REO sales. SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Market Competition Cools Down after Peaking in 2013 More than half of all home sales (53 percent) received multiple offers. On average, each home sale received 4.3 offers, a drop from 5.7 offers in 2013. SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Median Reduction = 4.5% of List Price Fewer Homes Sold above the Asking Price as Market Competition Cooled in 2014 Median Reduction = 4.5% of List Price The California housing market has become less competitive in 2014 when compared to the previous year, and it is reflected in the number of homes being sold above their listing price. Historically, 19 percent of all homes sold above their asking price. In 2014, while the share of home sales is still significantly above the long-run average, it dropped from 50 percent in 2013 to 33 percent in 2014. For a home sold with a price below its original asking price, the median price reduction from the list price was 4.5 percent. SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Fewer Homes Sold above the Asking Price as Market Competition Cooled in 2014 Long Run Average = 19% The California housing market has become less competitive in 2014 when compared to the previous year, and it is reflected in the number of homes being sold above their listing price. Historically, 19 percent of all homes sold above their asking price. In 2014, while the share of home sales is still significantly above the long-run average, it dropped from 50 percent in 2013 to 33 percent in 2014. A typical home sold with no discount in 2014, on par with what we have seen in 2013. The price discount remained at the lowest level since 2005, and was lower than the long run average of 2.9 percent. After the median time on MLS reached its lowest level since 2004, it bounced back to 2.1 weeks in 2014 from 1.6 weeks in 2013. Historically, a property stayed on the market for an average of 6.1 weeks.

Price Reduction Prior to an Offer Being Made Avg. Reduction $ = $10,000 Almost three out of ten sellers made an adjustment to their list price prior to an offer was being made to their property. More than one-third of them reduced their list price by $1,000 or less, 18 percent made a price reduction between $1,000 to $10,000, and 45 percent lowered the list price by more than $10,000. The average price reduction made in 2014 was $10,000. Q. Was there any price reduction made to the list price prior to an offer being made to the property? Q. How much was the price reduction? SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Share of Cash Buyers Is the Lowest Since 2009 More than one-fifth of all homebuyers paid with all cash in 2014, and it continues to stay above the long-run average of 15.1 percent since 1998. However, the share of all cash buyers decreased for the second consecutive year, after peaking at 30 percent in 2012. The share of all cash buyers is the lowest in the last five years. With the current statewide median price significantly higher than what it was in 2012, it was not surprise to see the number of all cash buyers gradually dropping in recent years. Almost one-fourth of buyers paid with all cash The share of all cash buyers is the lowest in the last 5 years SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

The Share of International Buyers Declines from 2013, but Still the 2nd Highest in the Last 6 Years The share of international buyers is the second highest in the last six years. More than a third (37%) of all international buyers paid with all cash, and the share was much higher than that of the total sales. 69 percent of all international buyers bought the property as a primary residence, 16 percent as investment/rental property, 11 percent as second/vacation home, and 5 percent as investment to flip. 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: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

REALTORS® Worked with International Buyers in the Past 12 Months # of Properties Sold to International Buyers in the Last 12 Months % Who Sold to International Buyers Almost three of ten REALTORS® worked with an international buyers in the past 12 months 69 percent of all international buyers bought the property as primary residence, 16 percent as investment/rental property, 11 percent as second/vacation home, and 5 percent as investment to flip. Q. How many properties have you sold to an international buyer in the last 12 months? SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Country of International Buyer China (36%) Canada (10%) India (12%) China, India, and Canada were the top 3 Countries of Origin for International buyers. 2013 Numbers: China 34.4% Mexico 14.8% Canada 9.8% SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Share of First-Time Buyers Up But Still Below Long-Run Average Share of FTB bounced back after dipping to the lowest level since 2006. It remains below the long run average of 38 percent, and it is the second lowest in the last 7 years. The slight increase in the share of FTB could be attributed to the growth in the economy and the slowdown in investors activity. 2004 – 26.0% (lowest on record) Q. Was the buyer a first-time buyer? SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Financial characteristics: First-Time vs. Repeat   First-time Buyers Repeat Buyers All Buyers Median Household Income $80,000 $120,000 $100,000 Median Monthly Mortgage Payment $1,477 $1,868 $1,800 Median Downpayment (in $$) $32,500 $70,000 Median Downpayment (in % to Price) 10% 20% 19.7% C.A.R.’s 2014 Annual Housing Market Survey shows that first-time homebuyers have lower annual median incomes -- $80,000 versus $120,000, when compared to repeat buyers. They also make significantly smaller median downpayments than repeat buyers do -- $32,500 against $100,000. The median loan-to-value (LTV) ratio faced by first-time homebuyers is higher at 90 percent, as compared to the 79 percent loan-to-value ratio faced by repeat buyers. The higher LTV ratio could also place first-timers in a higher risk category, which is typically discounted with a higher mortgage rate. Factoring in the higher loan-to-value ratio, many first-time homebuyers have to shoulder a large monthly financial burden. SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

The Median Down Payment Remained the same as in 2013 The percent of down payment to price and the median down payment remained virtually the same in 2014. Q. What was the amount of downpayment? SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Median Down Payment First-Time Homebuyers Vs. Repeat Homebuyers First-time buyers increased down payment by 3.4% to $32,500, and repeat buyers increased down payment by 3.8% to $100,000 Q. What was the amount of downpayment? SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Downpayment (Median) SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Cash Source for Down Payment First-Time Buyer vs. Repeat Buyer   First-time Buyers Repeat Buyers All Buyers Personal saving 63.3% 50.8% 54.8% Proceeds from sale of previous residence 0.0% 22.7% 15.6% Borrowed or gift from relatives 15.5% 4.5% 8.1% Sale of personal assets other than real property 1.7% 3.5% 2.9% Inheritance 4.0% 3.2% Proceeds from sale or refi of another property 4.6% Other 13.5% 11.0% 12.2% The cash source for down payment used to be quite different before 2007… Q. What was the source of the cash the buyer used for a downpayment or to purchase the residence? SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Buyer Household Formation (over the years)   2000 2005 2010 2011 2012 2013 2014 Single 30.8% 29.7% 32.4% 28.6% 28.9% 22.4% 21.7% Married Couple with Dependents 33.8% 36.9% 34.8% 33.6% 39.4% 42.6% Married Couple without Dependents 27.1% 19.2% 23.8% 24.2% 24.0% 25.1% 23.5% 2 or More Individuals (Related or Unrelated) 7.2% 13.8% 11.2% 10.7% 11.5% 9.6% 9.1% Other 1.4% 0.5% 1.8% 1.7% 2.0% 3.5% 3.1% Total 100.0% Household income for a married couple is typically higher than that for a single. As more Americans decided to get married at a later age, many singles simply did not have the purchasing power to buy a home as prices continued to rise at a double-digit rate in the past two years. As a result, the number of single home buyers declined in recent years. SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Location of Buyer’s Previous Residence   First-time Buyers Repeat Buyers All Buyers Within the same county 63.9% 56.2% 58.2% In another county in California 18.1% 21.6% 20.0% In another state 1.4% 11.0% 7.9% Out of US 3.6% 2.1% 2.5% Don't Know/Not sure 13.1% 9.1% 11.4% Total 100.0% SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Location of Buyer’s Previous Residence   2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Within the same county 63% 61% 65% 64% 62% 57% 58% In another county in California 21% 23% 22% 17% 18% 24% 19% 20% In another state 6% 8% 7% Out of US 1% 2% 3% Don't Know/Not sure 9% 10% 11% 12% Total 100% SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Reasons for Changing County SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Percent of Buyers with Zero Down Payment The share of first-time buyers who put zero down payment increased to 11.3 percent. The share of zero down payment is the highest since 2007. SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Proportion of Transactions With Second Mortgages Very few home buyers are using a second mortgage to finance their new property, partly because of the decline in home prices from the peak years and partly because of tighter lending standards. Since 2006, the percent of home sales with second mortgage has dropped from 43.4% to 4.1% in 2014. Q. In addition to the first mortgage or assumption, was there a second mortgage? SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Percent of Buyers with Second Mortgage The impact was more pronounced to first-time buyers than to repeat buyers. First-time buyers with second mortgage declined from 62.8 percent in 2006 to 5.8 percent in 2014, while repeat buyers declined from 35.0 percent in 2006 to 3.2 percent. SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Share of FHA Still Significantly Higher than 2007, But Was the Lowest in 7 Years (First Mortgage) After the housing market collapsed in 2008, the popularity of FHA loans grew markedly as conventional loans became more difficult to obtain. FHA and VA loans have become more favorable to home buyers since late 2007 as a result of the changing environment in the financial market. FHA loans generally require a lower down payment and have less-rigid credit-qualifying guidelines than conventional loans. Because of these advantages, there has been an increase in the demand for FHA loans since 2007. FHA loans as a first mortgage accounted for just one percent of total mortgages between 2004-2007, but has jumped from 1.2 percent of all loans in 2007 to 16 percent in 2014. Since it peaked in 2009 though, the share of FHA has been declining for the last five years and it was at the lowest level in the last 7 years. Q. Please indicate the type of mortgage. SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Buyers’ Financial Profile (by Age range)   Age 30 and under Age 30-44 Age 45-64 Age 65 and up Median Income $65,000 $100,000 $120,000 Median Price $284,000 $508,500 $495,000 $400,000 Downpayment ($) $20,000 $62,000 $109,000 Downpayment (% to Sale Price) 5.0% 13.7% 20.0% 22.0% % of First-Time Buyers 85.4% 45.6% 13.3% 4.5% Diff. Between Median Income and Mini. Req. Income -$26,508 $8,492 $28,492 % Can Afford to Buy a Median-Priced Home 28.6% 64.8% 66.4% 59.1% Housing affordability differs between age groups, as their financial characteristics vary. Potential homebuyers aged 30 and under are the ones who face the biggest challenge in the current housing affordability crisis. Based on results from the C.A.R. 2014 Annual Housing Market Survey, this group of young consumers not only has a lower household income than other age groups, but they also put a smaller downpayment when buying a property. As such, they are the group that is the least qualified to buy a median –priced home. Many of them also tend to purchase their home in the lower-priced segment, which is also the market with the tightest housing supply and the most competitive. Not surprisingly, this is also the age group with the most first-time buyers. SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Reasons for Buying Home buyers bought for many different reasons. More than 2 of 10 buyers bought because they were tired of renting a property and another 18 percent purchased their home because they desired a larger home. Other top reasons for buying include the desire for a better location (16%) and buying for investment /tax considerations. Q. What was the single most important reason for buying the property? SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Reasons For Buying First Time Homebuyers Vs. Repeat Homebuyers First-time buyers bought their property for different reasons. Over half of first time buyers wanted to buy because they were tired of renting. With average rents continuing to rise in many markets in California and the cost of borrowing remaining below the historical norms, buying makes more sense than renting to many buyers. Other top reasons to buy include: Desire for a larger home (14 percent) Desire for a better location (10 percent) Change in family status (7 percent) The primary reason to buy for repeat buyers was split among the desire for a larger home, the desire for a better location, and for investment/tax considerations Q. What was the single most important reason for selling/buying the property? SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

First-Time Buyers Bought Because They Were Tired of Renting Q. Was the buyer a first-time buyer? SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Years Owned Home Before Selling SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Reasons For Selling Q. What was the single most important reason for selling the property? SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Sellers Who Sold Because Their Properties Were in Distressed Status Were Back to 2007 Level Note: Prior to 2007, only those who selected “Foreclosures” were included in the percent of homes sold due to Foreclosure/Short Sale/Default. Q. What was the single most important reason for selling/buying the property? SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Sellers with Net Cash Loss Dropped to the Lowest Level since 2006 Long Run Average = 12.2% Another sign of the housing market improving: Number of sellers who sold their home with a loss dropped for the second consecutive years and was at the lowest level since 2006. Only 8 percent of all sellers sold their home with a loss in 2012, a drop from the 13.2 percent recorded in 2013. Q. What was the net cash gain or net loss to the seller as a result of this sale? SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Net Cash Gain to Sellers Rose Again for the Second Year Net cash gain climbed up to $100,000 in 2014 after increasing to $55,000 in 2013. It was the highest since 2008, when the net cash gain was also $100,000 in 2008. Q. What was the net cash gain or net loss to the seller as a result of this sale? SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Nearly Half of All Sellers Are Planning to Buy Another Home As the Market Recovers Sellers continued to feel optimistic about the housing market and were more comfortable with their financial situation in the last couple years. As the economy and the housing market continued to recover from the Great Recession, many of them regained confidence in owning a property. The share of sellers who planned on purchasing another home was about the same as 2013. Almost half (48%) of them planned to repurchase as the housing market continued to recover, and it was the second highest in the last 7 years. Those who planned on purchasing were primarily sellers with non-distressed properties, as 50 percent of them planned to repurchase. Only 24 percent of distressed home sellers planned to buy another house . Q. Is the seller planning on purchasing another home? SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Location of Seller’s New Home   2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Within the same county 38% 41% 37% 45% 47% 42% 49% 46% 44% In another county in California 23% 18% 24% 17% 21% 19% 20% In another state 31% 28% 29% 27% 22% Out of US 1% 2% 0% Don't Know/Not sure 7% 11% 9% 10% 12% 16% 15% 13% Total 100% After peaking in 2011 and 2012, the share of sellers who relocated within the same county started dropping again in the last couple years. The surge in home prices in recent years, which led in the decline in housing affordability in many regions across the state, was a factor in the drop of the share of sellers who want to stay within the same county. SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

For Those Who Do Not Plan to Repurchase, Here Are Their Top Reasons: Top reasons for home sellers not planning to repurchase were 1) they preferred to have less financial obligation (21 percent), 2) they already owned another house (16 percent), and 3) they decided to live with family/friends (9 percent). The top reasons were different from those in 2012 when nearly half of all home sales were distressed properties. While sellers preference for less financial obligation and sellers owning another property were also top reasons for not repurchasing, the number one reason that seller did not plan on repurchasing in 2012 was that seller is a lender. Lack of cash for down payment and poor credit background were also top reasons not to repurchase in 2012. SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

How Client Found Their Agent Leads come from the “basics”: provide good service to your clients, keep in touch with them, be prompt in response, and know how to communicate effectively with them. All that will put your name on your clients’ contact list, and they will call you when they want to buy or sell a home, or when they know someone who want to buy or sell a home. Q. How did your client find and select you to represent them? SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Repair Costs/Price Adjustments The amount paid for repair costs and/or price adjustments dropped to the lowest level since 2003. Q. Did the seller repair items, make adjustments to the purchase price, or make any other concessions during escrow due to discovered defects? SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Buyers Have More “Skin” in the Game 2006 2012 2013 2014 % of buyers with 20% or more down payment 43.2% 54.4% 52.2% 51.7% % of buyers with zero down payment 21.1% 4.6% 5.9% 8.4% % of cash buyers 11.0% 29.6% 27.4% 22.3% % of home buyers with a second mortgage 43.4% 1.8% 2.2% 4.1% % of buyer with ARM 32.6% 3.5% 4.0% 6.4% SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Less Likelihood to Default as Monthly Payment Is More Affordable 2006 2012 2013 2014 Average mortgage rate (FRM) 6.4% 3.7% 4.0% 4.3% Median home price for existing single- family homes $556,430 $319,310 $408,600 $463,500 Median household income for home buyers $100,000 Housing Affordability Index 12% 51% 36% 30% SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

MLS Related SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Pocket Listings SERIES: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

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: 2014 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®