1. UNDERSTANDING CALIFORNIA HOME SELLERS September 24,2015 Oscar Wei, Senior Economist

2. CALIFORNIA HOUSING MARKET OUTLOOK

3. SALES OF EXISTING DETACHED HOMES California, Aug 2015 Sales: 431,800 Units, +7.4% YTD, +9.3% YTY *Sales are seasonally adjusted and annualized SERIES: Sales of Existing Single Family Homes SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® Aug-15: 431,800 Aug-14: 395,080

4. CALIFORNIA SALES SERIES: Sales of Existing Single Family Homes, Seasonally Adjusted SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

5. MEDIAN PRICE OF EXISTING DETACHED HOMES California, Aug 2015: $493,420, 1.0% MTM, +2.5% YTY SERIES: Median Price of Existing Single Family Homes SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® Aug-15: $493,420 Aug-14: $481,250

6. INVENTORY CONTINUED TO DECLINE FROM LAST YEAR 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. 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®

7. DEMAND OUTPACING SUPPLY SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® Aug 2015

8. 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 being counted in listing stats

9. SHORT SALES CONTINUED SHRINKING Q: Was the home sold as a short sale?

10. YEARS OWNED HOME BEFORE SELLING SERIES: 2015 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

11. FEWER MIDDLE-AGE ADULTS IN RECENT YEARS Source: Harvard Joint Center of Housing Studies, Census Bureau

12. DROP IN HOMEOWNERSHIP Source: Harvard Joint Center of Housing Studies, Census Bureau

13. DECLINE IN # OF TRADE UP BUYERS DUE TO POPULATION LOSS & DROP IN HOMEOWNERSHIP RATE Source: Harvard Joint Center of Housing Studies, Census Bureau

14. FEWER HOMEOWNERS IN THEIR 30’S, 40’S LED TO RECENT DECLINE IN TRADE UP BUYERS Source: Harvard Joint Center of Housing Studies, Census Bureau

15. ABOUT THE SELLER

16. SELLERS ARE YOUNGER Q: What is your age?

17. SELLERS BY GENERATION Q: What is your age?

18. FIRST-TIME SELLERS Q: Was this your first experience in selling a house?

19. FIRST-TIME SELLERS Q: Was this your first experience in selling a house?

20. MOST SELLERS ARE MARRIED Q:What was the marital status the head of your household at the time of the sale?

21. MEDIAN HOUSEHOLD INCOME: $100,000 Q: What is your annual household income?

22. MEDIAN ANNUAL INCOME HAS INCREASED Q: What is your annual household income? (Please enter only numbers, no characters --- ie. $, periods, or commas)

23. MEDIAN HOUSEHOLD INCOME: $100,000 Q: What is your total annual household income

24. TOP REASON TO SELL: MOVING TO A BETTER LOCATION Q: What was your primary reason for selling your home?

25. TOP 5 REASONS FOR SELLING THEIR HOME (FIRST TIME VS. REPEAT) Q: What was your primary reason for selling your home?

26. REASONS FOR MOVING DIFFER ACROSS GENERATIONS Q: What was your primary reason for selling your home? AllGen YGen XBoomersSilent Desired better location19%25%20% 4.5% Wanted larger home13%25%24%3.3%2.3% Downsizing12%1.6%6.6%14%32% Change in family status11%16%13%7.6%9.1% Relocating for work11%14%16%8.1%0% I was retiring8.0%0%0.6%17%5% Trouble making mortgage payment 4.3%4.7%5.4%2.9%7.0% I am an empty nester3.3%0%o%7.1%2.3% I lost my job2.9%3.1%1.8%4.3%0% For the investment advantages 2.1%1.6%3.0%0.5%6.8%

27. TECHNOLOGY USE

28. THERE IS A 7% INCREASE IN INTERNET USAGE

29. ¼ SELLERS LIST ZILLOW AS MOST USEFUL WEBSITE Q: What was the most useful website you visited during your home selling process? 25% 14% 4%

30. GOOD VARIETY IN MARKETING PROPERTIES Q: How was your property marketed?

31. SELLERS’ BIGGEST CONCERN: GETTING A GOOD PRICE Q: What were your biggest concerns as a home seller?

32. 67% OF SELLERS RECEIVED MULTIPLE OFFERS Q: How many offers did you receive from buyers?

33. SELLERS RECEIVING FEWER OFFERS Q: How many offers did you receive from buyers?

34. MAJORITY OF SELLERS ACCEPTED HIGHEST OFFER Q: Which offer did you accept?

35. MAJORITY OF SELLERS ACCEPTED HIGHEST OFFER 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. CategoryAllGen YGen XBoomersSilent Highest52%49%55%52% Buyer's ability to close fastest16%21%16%18%4% No contingencies16%13%17%16% Personal letter/appeal from buyer8%10%9%7%12% 1st received7%1%7%8%4% All cash6%8%5%4%20% Other9%13%7%9%12% Q: Which offer did you accept?

36. NET CASH GAIN TO SELLERS HIGHEST SINCE 2007 SERIES: 2015 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® Q. What was the net cash gain or net loss to the seller as a result of this sale?

37. 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?

38. SELLERS OUTLOOK ABOUT FUTURE HOME PRICES 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. CategoryAllGen YGen XBoomersSilent Up in 1 year65%63%67%65%64% Up in 5 years59% 58%59%61% Down in 1 year3.5%4.7%0.6%4.8%6.8% Down in 5 years10%13%8.4%9.0%14% Unsure in 1 year7%6%5%8%11% Unsure in 5 years16%13%17% 16% Q: Do you think home prices in your neighborhood will go up, down, or stay flat in 1 year? …in 5 years?

39. MORE THAN HALF OF ALL SELLERS ARE PLANNING TO BUY ANOTHER HOME SERIES: 2015 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

40. FEWER SELLERS MOVED OUT OF STATE Q. In which county is your current residence located?

41. TOP STATES WHERE CA SELLERS HAVE RELOCATED Q: Which state?

42. SELLER/AGENT RELATIONSHIP

43. SELLERS THAT DID NOT USE AN AGENT REMAINS UNDER 5% Q. How did you find your real estate agent?

44. SELLERS NEEDED MOST HELP WITH NEGOTIATION Q: In what part of the transaction seller needed the most assistance?

45. MAJORITY OF SELLERS FOUND AGENT BY REFERRAL/PERSONAL CONTACT Q. How did you find your real estate agent?

46. HOW SELLERS FOUND THEIR AGENT 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. CategoryAllGen YGen XBoomersSilent Personal contact29%34%25%27%43% Referral25%19%26%27%23% Previous client17%19%20%15%11% Internet4%6%2%6%0% Online4%6%2%6%0% "For Sale Sign"3%5%3% 2% Q. How did you find your real estate agent?

47. 70% OF 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?

48. SELLERS INTERVIEWED SLIGHTLY MORE AGENTS Q: How many agents did you interview prior to selecting the agent you used in your recent home selling process?

49. REASON SELLER SELECTED AGENT Q: What was the single most important reason for selecting the agent you used in your recent home sale?

50. REASON SELLER SELECTED AGENT 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. CategoryAllGen YGen XBoomersSilent Trustworthy18%14%20%18%10% Worked with agent previously 17%22%19%15%14% Recommended17%13%15%18%19% Friend/Acquaintance17%19%17%13%29% Good reputation16% 17%18%14% Fastest to repsond6% 7%6%2% Q: What was the single most important reason for selecting the agent you used in your recent home sale?

51. MORE SELLERS CHANGED AGENTS IN 2015 Q: Did you initially list your home with an agent other than the one with whom you sold it?

52. 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?

53. AGENTS MEET 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?

54. SELLER RESPONSE TIME EXPECTATIONS AllGen YGen XBoomersSilent Instantly5.1%4.8%7.9%3.9%0% Within 1 hour16% 17% 12% Within 2 hours12.%13%8.0%15%19% Within 1 business day28%24%31%26%33% Q. What was the typical response time you expected from your agent to return any form of communication to you?

55. SLIGHT DECLINE IN SELLER SATISFACTION 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”. Category20112012201320142015 Value received for what you paid your real estate agent 3.13.0 4.43.9 Overall satisfaction with the real estate agent 2.8 2.74.44.2 Overall satisfaction with the home selling process 2.62.52.64.44.0

56. SELLER SATISFACTION DECREASED IN 2015 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”.

57. SELLER SATISFACTION WAS NEGATIVELY AFFECTED BY MISCOMMUNICATION OR LACK OF COMMUNICATION Q: Please explain why you had that level of satisfaction with your agent.

58. SELLER ADVICE TO AGENTS Q: What advice would you give to real estate agents to improve the process or level of service?

59. 4/10 SELLERS WOULDN’T CHANGE ANYTHING ABOUT THEIR RECENT SALE Q: If there was one thing you could change about your recent home sale, what would it be?

60. CONCLUDING REMARKS

61. THE TAKEAWAY – CA housing market remains strong – Sellers are optimistic about the future housing market, and many want to buy another home – Sellers need help with negotiation

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