1. UNDERSTANDING CALIFORNIA HOME SELLERS Presented by Carmen Hirciag, MBA Senior Research Analyst 1

2. CA HOUSING MARKET 2

3. Sales of Existing Detached Homes Mar. 2015: 391,680 Units (+2.3% YTD, +7.3% YTY) *Sales are seasonally adjusted and annualized SERIES: Sales of Existing Single Family Homes SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® Mar-15: 391,680 Mar-14: 365,120

4. Inventory Improving From Last Year Feb 2014: 4.7 Months; Feb 2015: 5.0 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®

5. Methodology Telephone surveys conducted in October - November 2014 of 381 randomly selected home sellers who sold April – September 2014. 5

6. ABOUT THE HOME 6

7. Majority of Sellers are in Southern CA Q. County in which home was located. In which county is your current residence located? 7

8. Nearly ½ CA Home Owners Moved in Before 2000 Source: U.S. Census Bureau 2013 American Community Survey 8

9. Length of Ownership Continued Increasing Q: How many years did you own the home? 9

10. Most Sales are Single Family Homes Q: What type of home was it? 10

11. Most Homes are Primary Residence Q: Was it your … primary residence, vacation/second home, investment, or other residence? 11

12. Average Listing Price vs. Average Sale Price 12

13. THE SELLING PROCESS 13

14. Change in Family Status is #1 Reason for Selling Q: What was your primary reason for selling your home? 14

15. Change in Family Status is #1 Reason for Selling Q: What was your primary reason for selling your home? 15 AllGen YGen XBoomersSilent Change in family status32%44%38%28%33% Desired better/other location22%28%35%19%18% Downsizing14%01.7%15%20% Desired larger home5.8%22%6.9%6.4%2.7% Retirement4.5%005.8%6.2%

16. 62% of Sellers Received Multiple Offers Q: How many offers did you receive from buyers? 16

17. Sellers Received 3.3 Offers on Average Q: How many offers did you receive from buyers? 17

18. Majority of Homes Were on the Market 4 Weeks or Less Q: How many weeks was your home listed on the market prior to the opening of a successful escrow? 18

19. Decline in Average Weeks on Market Reflects Tight Inventory Q: How many weeks was your home listed on the market prior to the opening of a successful escrow? 19

20. Many Sellers Accepted Highest/1 st Offer Q: Which offer did you accept? 20

21. 1/2 Sellers Would Not Change Anything Q: If there was one thing you could change about your recent home sale, what would it be? Get more money for the house (7.9%)List at higher price (6.6%)Get a better/different agent (4.7%)Not have to sell (4.2%)Nothing, I wouldn’t change anything (50%) 21

22. Majority Sales Not Contingent on Finding Another Home to Purchase Q: Did your selling agent also help you with that purchase? Q: Was your home sale contingent on you finding another home to purchase? 22

23. 22% Sellers Didn’t Have Any Concerns Q: What were your biggest concerns as a home seller? 23

24. Technology Use 24

25. Most Useful Websites for Sellers Q: What was the most useful website you visited during your home selling process? 25

26. % of Sellers Who Did Not Use Internet 26 Q: What was the most useful website you visited during your home selling process?

27. 31% of Sellers Used Mobile Device in Selling Process Q: How did you use your smart phone, tablet, or other mobile device in the home selling process? 16% Communicate w/agent 7.9% Check neighborhood comps 3.1% Visit real estate sites or apps 1.6% Electronic signature 0.8% Check/send emails 27

28. 14% of Sellers Googled their Agents Q: Did you Google your agent? 28

29. Most Sellers Didn’t Check Agent’s Online Ratings Q: Did you check your agent’s online ratings by prior clients? 29

30. 16% of Sellers Checked Agent’s Online Ratings Q: Which websites did you check for agent ratings? 30

31. SELLERS WORKING WITH AGENTS 31

32. Majority of Sellers Found Agent by Referral/Personal Contact Q. How did you find your real estate agent? 32

33. 2/3 Sellers Interviewed Only 1 Agent Q: How many agents did you interview prior to selecting the agent you used in your recent home selling process? 33

34. Sellers Interviewed Fewer Agents Q: How many agents did you interview prior to selecting the agent you used in your recent home selling process? 34

35. Reason Seller Selected Agent Knew agent/prior experience (14%) Friend (11%) Good reputation/successful (10%) Trustworthy (9.8%) Recommended/nice person (6.8%) Q: What was the single most important reason for selecting the agent you used in your recent home sale? 35

36. Reason Seller Selected Agent 36 Q: What was the single most important reason for selecting the agent you used in your recent home sale?

37. Agent Satisfaction Ratings Improve Category2011201220132014 Value received for what you paid your real estate agent 3.13.0 4.4 Overall satisfaction with the real estate agent2.8 2.74.4 Overall satisfaction with the home selling process2.62.52.64.4 Q: Please rate your degree of satisfaction with your agent for each of the following aspects on a scale of 1 to 5, where 1 is least satisfied and 5 is most satisfied. Q: Please rate your degree of satisfaction with your agent on these three things using a 1 to 5 scale where 1 is “Least Satisfied” and 5 is “Most Satisfied”. 37

38. Seller Satisfaction Improved Q: Please rate your degree of satisfaction with your agent on these three things using a 1 to 5 scale where 1 is “Least Satisfied” and 5 is “Most Satisfied”. 38

39. Seller Satisfaction with Agent 1. Good/excellent job (30%) 2. Professional/stayed on top of process (7.6%) 3. Got a quick sale (5.4%) 1. Could have done a better job (3.8%) 2. Could have listed/sold for higher price (2.2%) 3. Poor communication/not responsive (1.4%) Q: Please explain why you had that level of satisfaction with your agent. 39

40. Good Variety in Marketing Properties Q: How was your property marketed? 40

41. Agent / Seller Communication in Sync 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? 41

42. Agents Meet Seller Response Time Expectations 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? 42

43. Seller Response Time Expectations Q. What was the typical response time you expected from your agent to return any form of communication to you? 43 AllGen YGen XBoomersSilent Instantly21%5.9%18%20%23% Within 1 hour20%18%23%20%21% Within 2 hours11%24%19%7.2% Within 1 business day 25%35%18%29%22%

44. Q. What was the typical response time you expected from your agent to return any form of communication to you? Fewer Sellers Expect Instant Response from Agent 44

45. FINANCING 45

46. Sellers Who Had a Mortgage 46

47. Majority of Sellers had Traditional Loans Q: What type of mortgage did you have? 47

48. Short Sales Continued Shrinking Q: Was the home sold as a short sale? 48

49. Percentage of Short Sales Q: Was the home sold as a short sale? 49

50. % of Loan Modifications Before Short Sale 50

51. 1/4 Sellers Tapped Into their Home Equity Q: At the time of your home sale, was any portion of your outstanding mortgage balance due to a cash-out refinance? 51

52. Sellers Who Tapped Into their Home Equity Q: At the time of your home sale, was any portion of your outstanding mortgage balance due to a cash-out refinance? 52

53. Fewer Sellers Considered Strategic Default Q: As you may be aware, some home owners decided to stop paying their mortgages because their home value was lower than the balance on their loan. This is known as strategic default. Did you consider a strategic default? 53

54. Sellers Who Considered Strategic Default Q: As you may be aware, some home owners decided to stop paying their mortgages because their home value was lower than the balance on their loan. This is known as strategic default. Did you consider a strategic default? 54

55. ABOUT THE SELLER 55

56. First-time Sellers Q: Was this your first experience in selling a house? 56

57. First-time Sellers Q: Was this your first experience in selling a house? 57

58. Asians Have Highest Proportion of First-time Sellers Q: Was this your first experience in selling a house? 58

59. More Sellers Are Repurchasing Q: Do you own or rent your current home? *Data from C.A.R. Market Pulse Survey 59

60. Sellers Are Optimistic About Future Home Prices Q: Do you think home prices in your neighborhood will go up, down, or stay flat in 1 year? …in 5 years? 60

61. Sellers Outlook About Future Home Prices Q: Do you think home prices in your neighborhood will go…? 61

62. Average Seller is 61 Years Old *Source: U.S. Census Bureau 2013 American Community Survey Q: What is your age? 62

63. Majority of Sellers are Male 63

64. Most Sellers are Married *Source: U.S. Census Bureau 2013 American Community Survey Q:What was the marital status the head of your household at the time of the sale? 64

65. Most Sellers are Married Q:What was the marital status the head of your household at the time of the sale? 65

66. Whites are the Majority Q: How would you describe your ethnic background? 66

67. Ethnic Background 67

68. Median Household Income: $100,000 Q: Which of the following categories best describes your total annual household income from all sources? 68

69. KEY TAKEAWAYS 69

70. Market Stable for Sellers Sales improving Pricing homes correctly Multiple offers Homes selling faster Few short sales 70

71. Sellers Generally Pleased w/ Sale Process ½ wouldn’t change anythingAgent & selling process ratings improvedAgent-seller communications in sync 71

72. Seller Advice to Agents 13% Be honest, ethical & up-front with clients 11% Listen to clients needs 8.4% Keep client informed 3% Work hard, stay on top of everything 2.7% Explain process, get sales price right Q: What advice would you give to real estate agents to improve the process or level of service? 72

73. Understanding California Home Buyers Thursday, May 28, 2015 2:00 PM – 3:00 PM To register: WWW. CAR.ORG/MARKETDATA/VIDEOS WWW. CAR.ORG/MARKETDATA/VIDEOS Join us for our next webinar…

76. THANK YOU! carmenh@car.org. 76