UNDERSTANDING TODAYS HOME

BUYER
Presented by

Carmen Hirciag, MBA
Senior Research Analyst
Survey Methodology

1,400 telephone interviews
conducted in February 2014
home buyers who purchased Aug. 2013 Jan. 2014
SoCal
55%
NorCal
20%
Other CA
26%
WHO IS THE 2014 BUYER?
Demographics
Typical CA Home Buyer
Average Age: 48
12%
32%
26%
25%
7%
25-34
35-44
45-54
55-64
65+
0% 5% 10% 15% 20% 25% 30% 35%
A
g
e

Q. What is your age?
Buyer Age Continues Rising
40
41 41 41
44
41
40
38
37
36
35
38
48
0
10
20
30
40
50
60
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Average Age
Q. What is your age?
Younger Buyers Continue to Decline
0%
20%
40%
60%
80%
100%
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
2
0
1
2
2
0
1
3
2
0
1
4
Refused
65+
55-64
45-54
35-44
25-34
Under 25
Q. What is your age?
Housing Affordability Index
0%
10%
20%
30%
40%
50%
60%
CA
Housing Affordability (State) Peak vs. Current
0%
10%
20%
30%
40%
50%
60%
70%
80%
US
CA SFH
CA
Condo/Townhomes
Los Angeles
Metropolitan Area
Inland Empire
S.F. Bay Area
59%
33%
41%
34%
48%
22%
71%
56%
64%
56%
71%
45%
Q1-2014 Q1-2012
Minimum Annual Income Required Peak vs. Current
By Counties, 2014 Q1 vs. 2012 Q1
Region Peak 2014 Q1 % CHG
CA SFH $56,320
$86,419
53%
CA Condo/Townhomes $44,440
$71,994
62%
Los Angeles Metropolitan Area
$53,780 $81,195
51%
Inland Empire
$35,170 $55,302
57%
S.F. Bay Area
$90,370 $140,977
56%
US
$32,000 $39,734
24%
SERIES: Housing Affordability Index of Existing Detached Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS
Percent of First-time Buyers Continues Decline
8%
7%
15%
25%
25%
19%
19%
38%
46%
43%
54%
42%
12%
Q. Was this your first home purchase?
Minorities are the Majority
White 36%
Hispanic 26%
Black 12%
Asian/Pacific
Islander 26%
Q. How would you describe your ethnic background?
Majority of Buyers are Married
married 59%
Single 27%
Other 14%
Married Buyers on the Decline
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Married Single Other
Q. What is your marital status?
More than Half of Buyers have College Degrees
High
School
Some
College
Vocation/
Technical
College
Grad
Post Grad
0%
10%
20%
30%
40%
50%
7%
11%
23%
50%
11%
Q. What is the highest level of education you have completed?
7/10 Buyers have Annual Household Income >
$100K
$50-000-$74,999
$75,000-$99,999
$100,000-$149,999
$150,000-$199,999
$200,000 +
0%
5%
10%
15%
20%
25%
30%
3%
25%
27%
27%
17%
Q. Which of the following categories best represents you total annual income from all sources?
Buyers Annual Household Income Rises
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
$200,000 +
$150,000-$199,999
$100,000-$149,999
$75,000-$99,999
$50-000-$74,999
Under $50,000
Q. Which of the following categories best represents you total annual income from all sources?
Fewer Repeat Buyers Previously Under Water
Q. Was the outstanding loan balance on your previous home higher than the sale price?
0%
2%
4%
6%
8%
10%
12%
2013 2014
12%
4%
THE BUYING EXPERIENCE
Listing Price Rises 7%
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
2013 2014
$355,000
$380,000
Median
Q. What was the initial listing price of the home you purchased?
Median Purchase Price Rises 25% YTY
$0
$100,000
$200,000
$300,000
$400,000
$500,000
Q. What was the price of the home you purchased?
Purchase Price
26%
27%
24%
7%
5%
3%
10%
-5% 5% 15% 25% 35% 45%
$200,000-
$299,999
$300,000-
$399,999
$400,000-
$499,999
$500,000-
$599,999
$600,000-
$699,999
$700,000-
$799,999
$800,000+
Median: $375,000
Q. What was the price of the home you purchased?
Purchase/Listing Prices Nearly Equal
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
Listing Purchase
$380,000
$375,000
Median
Q. What was the price of the home you purchased?
Median Distance from Previous Residence: 15
Miles
0% 5% 10% 15% 20% 25% 30% 35% 40%
1-10
11-25
26-100
>100
38%
22%
16%
24%
M
i
l
e
s

Q. How many miles away was your previous residence from the home you bought?
Buyers Staying Closer to Previous Residence
Q. How many miles away was your previous residence from the home you bought?
0
5
10
15
20
25
2013 2014
25
15
M
i
l
e
s

Median
Nearly 6/10 Buyers Were Previous Home Owners
Owned
59%
Rented
40%
Lived with
Parents
2%
Q. What was the living arrangement immediately before your recent home purchase?
More Buyers Owned Previous Residence
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2011 2012 2013 2014
Owned Rented Lived w/parents Other
Q. What was the living arrangement immediately before your recent home purchase?
Buyers Spending Less Time than Last Year
Considering Purchase Before Contacting Agent
0
5
10
15
20
25
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Q. How many weeks did you consider buying a home before contacting a real estate agent? (Asked if agent was used)
Average Weeks
Buyers Spending Less Time than Last Year Investigating
Homes & Neighborhoods Before Contacting Agent
0
5
10
15
20
25
30
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
W
e
e
k
s

Q. How many weeks did you spend investigating homes and neighborhoods before contacting a real estate agent? (Asked if agent was used)
Average Weeks
The Home Search is Getting Lengthier
0
5
10
15
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Average Weeks
Q. Once you found your agent, about how many weeks did you spend looking for a home with your agent? (Asked if agent was used)
All Buyers Viewed at Least 10 Homes Before
Buying
29%
16%
37%
19%
10 12-18 20 > 20
Number of Homes
Q. How many different homes did you preview and visit with your agent prior to making a purchase?
Increase in Homes Viewed Reflects Inventory
Improvement
0
5
10
15
20
25
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Q. How many different homes did you preview and visit with your agent prior to making a purchase?
Median
91% of Buyers Made Offers on Other Homes
0%
5%
10%
15%
20%
25%
30%
35%
0 1 2 3 4 5+
9%
10%
11%
24%
14%
32%
Number of Offers
Q. How many offers did you make on other homes?
Buyers Made More Offers on Other Homes
Q. How many offers did you make on other homes?
3
3.6
0
0.5
1
1.5
2
2.5
3
3.5
4
2013 2014
Average
Price Decreases are Main Reason for Buying
Change in family
Long term appreciation
Desired larger home
Investment/Tax advantage
Desired better/other location
Favorable price/financing
Low interest rates
Promotion/raise
Price decreases
8%
9%
13%
15%
16%
17%
29%
34%
54%
Q. What were your main reasons for buying your home?
Buyers Didnt Purchase Sooner Because
57%
Not many good housing options
53%
Waited to see when prices would stabilize
36%
No real buying urgency
30%
Difficulty qualifying for mortgage
21%
Needed to sell existing home
20%
Needed to save for down payment
15%
Waited until finances improved
Q. Why didnt you buy a home sooner?
Nearly Half of Buyers Settled on Best Available Home
Satisfied 54%
Selected best
option given
limited supply
46%
Q. Are you satisfied with the home you purchased or do you feel like you selected the best option given the limited supply of homes?
More Buyers Settled on Best Available Home
Q. Are you satisfied with the home you purchased or do you feel like you selected the best option given the limited supply of homes?
0%
20%
40%
60%
80%
100%
2013
2014
66%
54%
34%
46%
Satisfied Settled
Most Buyers Found Home through Agent
Home builder/developer
For sale sign
Open house
Website
Agent
0%
20%
40%
60%
2%
3%
3%
39%
54%
Q. How did you find the home you purchased?
More Buyers are Finding Homes Online
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2009
2010
2011
2012
2013
2014
Agent Website Other
Q. How did you find the home you purchased?
Most Homes Were Listed on MLS
Yes
81%
No
19%
Q. Was the home you purchased listed on a multiple listing service?
Fewer Homes Were Listed on MLS
Q. Was the home you purchased listed on a multiple listing service?
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2013 2014
Buyers Plan to Keep Homes Longer
Q. How long do you plan to keep the property?
0
1
2
3
4
5
6
7
8
9
2013 2014
6
8.8
Average Years
Buyers Optimistic About Long Term Direction of
Home Prices
60%
26%
14%
81%
10%
9%
Up
Flat
Unsure
1 Year 5 Years
Q Do you think home prices in the neighborhood where you purchased will go up, down, or stay flat in one year, in five years?
More Buyers Believe Prices Will Rise
60%
81%
8%
35%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
In 1 Year In 5 Years
2014
2009
Q Do you think home prices in the neighborhood where you purchased will go up in one year, in five years?
Internet Use
More Buyers Using Mobile
85%
91%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2013 2014
Q. Did you use a mobile device in the home buying process?
91% of Buyers Used Mobile Device in Buying Process
78%
Look for comparable prices
45%
Search for homes
45%
Communicate
43%
Take photos of homes/amenities/neighborhoods
42%
Research a particular home
41%
Search websites
39%
Communicate w/agent
22%
Research communities/neighborhoods
Q. How did you use your mobile device in the home buying process? N = 1269
Zillow is Most Useful App
Q. What was the most useful app that you used during the home buying process? N = 1269
Realtor.com & Zillow are Most Useful Websites in
Buying Process
4%
5%
8%
9%
10%
22%
31%
0% 5% 10% 15% 20% 25% 30% 35%
Q. What was the single most useful website that you visited during your home buying process?
Brokerage
Agent
Realtor.com & Zillow Most Useful Websites
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2007 2008 2009 2010 2011 2012 2013 2014
Zillow realtor.com Brokerage Yahoo Redfin
Q. What was the single most useful website that you visited during your home buying process?
Most Buyers Found Home on Realtor.com or
Zillow
4%
5%
8%
12%
13%
26%
33%
0% 5% 10% 15% 20% 25% 30% 35%
Q. On which website did you find your home?
Realtor.com & Zillow Helped Most Buyers Find
Homes
0%
5%
10%
15%
20%
25%
30%
35%
2011 2012 2013 2014
realtor.com Zillow Trulia Redfin
Q. On which website did you find your home?
Social Media Use Continues Rising
0%
10%
20%
30%
40%
50%
60%
70%
80%
2011 2012 2013 2014
52%
68%
75%
77%
Q. Did you use social media (such as Facebook, Twitter, YouTube, etc.) in your home buying process?
77% of Buyers Used Social Media in Buying
Process
Q. Which social media websites did you use during your home buying process? N = 1073
Social Media Used for Buying Tips &
Neighborhood Info
0% 10% 20% 30% 40% 50%
Agents' YouTube
Neighborhood profiles
Home buying info
Neighborhood amenities
Neighborhood lifestlye
Agent referrals
Agent's Facebook page
Neighborhood info from friends
Buying tips, suggestions from friends
20%
23%
23%
31%
33%
35%
42%
44%
44%
Q. How did you use social media (such as Facebook, Twitter, YouTube, etc.) in your home buying process? N = 1073
92% of Buyers are Receptive to Receiving
Information via Social Media
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
2011 2012 2013 2014
4.2
4.1
4.1
4.1
Average
Q. How receptive would you be to receiving information about the home buying process directly from your real estate agent via social
media? (Scale: 1-5)
Fewer Buyers Google their Agent
0%
10%
20%
30%
40%
50%
60%
70%
80%
2007 2008 2009 2010 2011 2012 2013 2014
Q. Did you Google your agent?
Internet Info as Useful as Agent Info
Agent info as
useful as
internet info
28%
Internet info
less useful than
agent info 26%
Internet info
more useful
than agent info
23%
Internet info
different from
agent info 19%
Q. How would you compare the information you gathered on the Internet to the information provided by your real estate agent?
N = 1238
Financing
Fewer Buyers Obtained Financing
0%
20%
40%
60%
80%
100%
2009
2010
2011
2012
2013
2014
100%
94%
92%
96%
91%
74%
Q. Did you obtain financing for your home purchase?
More than Buyers Paid Cash
Financing 74%
Cash 26%
Q. How did you pay for the home you purchased?
Most Cash Buyers Used Proceeds from Previous
Residence
0% 20% 40% 60% 80% 100%
Borrowed/gifted
Pension fund
Proceeds from sale/refi of another
Inheritance
Personal savings
Sale of personal assets
Proceeds from previous residence
5%
16%
29%
32%
40%
44%
95%
Q. If all cash, where did the funds come from? N = 367
Average Down Payment Remains Above 20%
25%
31%
26%
25%
25%
28%
0%
5%
10%
15%
20%
25%
30%
35%
2009 2010 2011 2012 2013 2014
Average
Q. What was your down payment for the home purchased, in percent of the home value?
Most Buyers Obtain Fixed Rate Loans
Fixed 92%
Adjustable 8%
Q. What type of loan do you have?
Fixed Rate Loans Remain Majority
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2009 2010 2011 2012 2013 2014
69%
79%
84%
93%
91% 92%
31%
15%
16%
7%
8%
8%
6%
1%
Fixed Adjustable Other
Q. What type of loan do you have?
85% of Loans are for 30 Years
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2011
2012
2013
2014
85%
87%
85%
86%
15%
13%
15%
14%
15 Year 30 Year
Q. What was the duration of your loan?
Buyers Have Less Difficulty With Financing
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
2009
2010
2011
2012
2013
2014
8.1
8.5
8.0
8.5
8.6
7.1
Average
Q. Please rate how easy or difficult it was to obtain financing on a scale of 1 to 10 with 1 being very easy and 10 being very difficult.
2/3 Buyers Did Not Have Appraisal Problems
66%
15%
19%
None
Had to get 2nd appraisal
Had to find more recent
comps
Q. What, if any, problems did you have with the home appraisal when attempting to obtain financing?
More Buyers Had Appraisal Problems
Q. What, if any, problems did you have with the home appraisal when attempting to obtain financing?
0%
50%
100%
2013
2014
None Had to get 2nd appraisal Had to get more recent comps
BUYER/AGENT RELATIONSHIP
Fewer Buyers Used Agent
74%
86% 86%
84%
86%
89%
87%
90%
92%
94%
96%
91%
88%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Q. Did you use a real estate agent in your home buying process?
Most Buyers Find Agents Online
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Relationships/Contacts Advertising Internet Other
Q. How did you find your real estate agent?
More than Buyers Interviewed at Least 2 Agents
0%
5%
10%
15%
20%
25%
1 2 3 4 5 6 7
24%
23%
10%
18%
16%
5%
4%
# of Agents Interviewed
Q. How many agents did you interview prior to selecting the agent you used in your recent home purchase?
Buyers Continue Interviewing Multiple Agents
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
2.3 2.3
2.4
2.5 2.5
2.4
2.8
2.2
1.8
2.2
3.2
3.1
Average
Q. How many agents did you interview prior to selecting the agent you used in your recent home purchase?
Previous Performance Important to Buyers in
Selecting Agent
3%
7%
8%
13%
13%
22%
29%
Most knowledgeable
Distressed property knowledge
Negotiating ability
1st to respond
Seemed most aggressive
Seemed most reponsive
Previously used agent
Q. What was the single most important reason for selecting the agent that you used in your recent home purchase?.
Gap in Phone & Text Communication
Telephone
Email
Text Message
In Person
11%
47%
40%
1%
38%
46%
15%
0%
Preferred Actual
Q. What was your preferred method of communicating with your agent?
Q. How did your agent actually communicate with you?
10%
24%
35%
38%
37%
42%
44%
49%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2007 2008 2009 2010 2011 2012 2013 2014
Q. What was the typical response time you expected from your agent to return any form of communication to you?
More Buyers Expect Instant Response from Agents
Room for Improvement in Agent Response Time
0%
10%
20%
30%
40%
50%
60%
Instantly Within 30
mins.
Within 1
hr.
Within 2
hrs.
Within 4
hrs.
Same day 1 business
day or
longer
49%
29%
16%
4%
2%
0% 0%
18%
7%
11%
17%
24%
13%
10%
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?
Agent Satisfaction Ratings Improve
- Average Ratings on 1-5 Scale -
2013 2014
Your real estate agents negotiating skills 3.2 3.4
Overall process of finding a home 3.2 3.3
Overall satisfaction with your real estate agent 3.1 3.3
Q. Please rate your degree of satisfaction with the following aspects of your home buying experience on a scale of 1-5, where 1 is least
satisfied and 5 is most satisfied.
Buyer Satisfaction Improves Slightly
1
1.5
2
2.5
3
3.5
4
4.5
5
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Process of Finding a Home Satisfaction with Agent
Q. Please rate your degree of satisfaction with the following aspects of your home buying experience on a scale of 1-5, where 1 is least
satisfied and 5 is most satisfied.
Reasons for Satisfaction With Agent
Q. Why do you have that level of satisfaction with your agent?
Reasons for Dissatisfaction With Agent
Q. Why do you have that level of satisfaction with your agent?
More Buyers Would Work w/Agent Again
88%
87%
50%
67%
61%
64%
72%
54%
60%
52%
61%
2%
3%
4%
3%
15%
13%
11%
11%
12%
22%
33%
10% 10%
46%
30%
25%
22%
17%
35%
28%
26%
6%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Unsure No Yes
Q. Would you work with the same agent again?
What Buyers Would Change About the Home
Buying Experience
1. Better Communication with agent (38%)
2. Faster agent response (26%)
3. Better agent negotiation (19%)
4. Better market understanding (14%)
5. More assistance with mortgage approval (3%)
Q. If there was one thing you could change about the home buying experience, what would it be?
SO WHAT?
Key Conclusions & Opportunities
Buyer Demographics are Changing
Buying Process Begins Before Agent is Contacted
Buyers Need Most Agent Assistance in Finding the
Right Home
0% 10% 20% 30% 40% 50% 60% 70% 80%
Determine affordability
Determine comps
Negotiate terms of sale
Price negotiation
Find the right home
30%
56%
60%
75%
79%
Q. In which part(s) of the transaction did you need the most assistance from your agent?
Communication
Important to buyers
in agent selection
Response time
Being aggressive
Negotiation skills
Knowledgeable
Communicate better
Respond
immediately
Market your
skills effectively
Communicate
according to
client preference
Importance of Mobile
Financing
Buyers had
difficulty
obtaining
financing
54%
Lender
contacts
Loan options
Downpayment
assistance
programs
Provide
solutions
What Buyers Would Change About the Home
Buying Experience
1. Better Communication with agent (38%)
2. Faster agent response (26%)
3. Better agent negotiation (19%)
Q. If there was one thing you could change about the home buying experience, what would it be?
Advice to Agents from Buyers
Respond faster (63%)
Communicate according to client preference (55%)
Communicate better (44%)
Negotiate better (24%)
Understand market direction better (12%)
Q. What advice would you give to real estate agents to improve the process or the level of service?
THANK YOU!
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Interior Designer Thom
Filicia
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Terri
Sjodin
Best-selling author of
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Impact
Captain Chesley
Sully
Sullenberger
Best-selling author
of Highest Duty
Leslie
Appleton-Young
C.A.R. Vice President
and Chief Economist
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