1

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

CA HOUSING MARKET

Sales of Existing Detached Homes

Mar. 2015: 391,680 Units (+2.3%YTD, +7.3%YTY)
700,000
600,000
Mar-14: Mar-15:
365,120 391,680

500,000
400,000
300,000
200,000
100,000

SERIES: Sales of Existing Single Family Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS

*Sales are seasonally adjusted and annualized

Jan-15

Jul-14

Jan-14

Jul-13

Jan-13

Jul-12

Jan-12

Jul-11

Jan-11

Jul-10

Jan-10

Jul-09

Jan-09

Jul-08

Jan-08

Jul-07

Jan-07

Jul-06

Jan-06

Jul-05

Jan-05

Inventory Improving From LastYear

Feb 2014: 4.7 Months; Feb 2015: 5.0 Months
18
16
14
12
10
8
6
4

Jan-15

Jul-14

Jan-14

Jul-13

Jan-13

Jul-12

Jan-12

Jul-11

Jan-11

Jul-10

Jan-10

Jul-09

Jan-

Jul-08

Jan-

Jul-07

Jan-07

Jul-06

Jul-05

Jan-05

Jan-

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

Methodology
Telephone surveys conducted in October - November

2014 of 381 randomly selected home sellers who sold

April September 2014.

ABOUTTHE HOME

Majority of Sellers are in SouthernCA

SoCal

NorCal

Other CA

19%

27%

28%

18%

52%

55%

2013

2014

Q. County in which home was located. In which county is your current residence located?

Nearly CA HomeOwners Moved in Before 2000

California Home Owner Move-inYear

40%

37%

35%
30%
25%
20%

22%
17%

15%

12%

10%

8%
5%

5%
0%
after 2009

2000-2009

1990-1999

Source: U.S. Census Bureau 2013 American Community Survey

1980-1989

1970-1979

before 1970

Length of OwnershipContinued Increasing

% Short Sales

Median # of Years

16

50%
44%

14

45%

41%

14

35%

10
8

30%
22%

25%

20%

15%

12%

4
2

40%

6%

10%
5%

0%
2010

2011

Q: How many years did you own the home?

2012

2013

2014

% Short Sales

Number ofYears

12

10

Most Sales are Single Family Homes

Condo/Townhome
12%

Other 2%

Single-family
detached 86%
Q: What type of home was it?

11

Most Homes are Primary Residence

100%
90%

3%

8%
1%

2%

80%
70%

Investment property

60%
50%

91%

95%

Primary residence

40%
30%
20%
10%
0%
2013

Vacation/2nd home

2014

Q: Was it your primary residence, vacation/second home, investment, or other residence?

12

Average Listing Price vs.Average Sale Price

Listing Price

Sale Price

2011

2012

$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$0
2009

2010

2013

2014

13

THE SELLING PROCESS

14

Change in Family Status is #1 Reason for Selling

32%

Change in family status

22%

Desired better/other location

14%

Downsizing
5.8%

Desired larger home

Retirement

4.5%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%

Q: What was your primary reason for selling your home?

15

Change in Family Status is #1 Reason for Selling

All

GenY

Gen X

Boomers

Silent

Change in family status

32%

44%

38%

28%

33%

Desired better/other location

22%

28%

35%

19%

18%

Downsizing

14%

1.7%

15%

20%

Desired larger home

5.8%

22%

6.9%

6.4%

2.7%

Retirement

4.5%

5.8%

6.2%

Q: What was your primary reason for selling your home?

16

62% of Sellers Received MultipleOffers

35%

32%

30%
25%
21%
20%

20%
14%

15%
7.6%

10%
5%
0%
1

Q: How many offers did you receive from buyers?

5+

17

Sellers Received 3.3 Offers on Average

5.9

6.0
5.0
4.0

3.3

3.1
3.0
2.0
1.0
0.0
2012

Q: How many offers did you receive from buyers?

2013

2014

18

Majority of HomesWere on the Market 4Weeks or

Less
60%
51%
50%
40%
30%
16%

20%

12%

12%
6%

10%

3%

0%
<1

1-4

5-8
9-12
Weeks on Market

10-12

Q: How many weeks was your home listed on the market prior to the opening of a successful escrow?

13+

19

Decline inAverageWeeks on Market ReflectsTight

Inventory
Average Weeks

31.0

29.2

27.4
26.0
20.5

21.0
16.0

14.0
10.7

11.0
6.0

26.0

25.6

8.5

7.0

3.3

1.0
2005

2006

2007

2008

2009

2010

2011

2012

Q: How many weeks was your home listed on the market prior to the opening of a successful escrow?

2013

2014

20

Many SellersAccepted Highest/1st Offer

Silent

Boomers

Gen X

Gen Y

All

Highest
1st received
All cash
No contingencies
Only 1 received
Buyer's ability to close fastest
0%
Q: Which offer did you accept?

5%

10%

15%

20%

25%

30%

35%

21

1/2 SellersWould Not ChangeAnything

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 wouldnt change anything (50%)

Q: If there was one thing you could change about your recent home sale, what would it be?

22

Majority Sales NotContingent on FindingAnother

Home to Purchase
Contingent 27%

Agent didn't
help 30%

N/A 1.9%
Not contingent
73%

Agent helped
w/purchase 67%

Q: Was your home sale contingent on you finding another home to purchase?
Q: Did your selling agent also help you with that purchase?

23

22% Sellers Didnt HaveAny Concerns

Getting good price

21%

Selling house

11%

Selling quickly

6.6%

Finding qualified buyer

6.0%

Finding new house

0.0%

5.5%
5.0%

Q: What were your biggest concerns as a home seller?

10.0%

15.0%

20.0%

25.0%

24

Technology Use

25

Most UsefulWebsites for Sellers

Q: What was the most useful website you visited during your home selling process?

26

% of SellersWho Did Not Use Internet

65%

70%
60%
50%
40%

43%

37%
28%

29%

30%
20%
10%
0%
Gen Y

Gen X

Boomers

Silent

Q: What was the most useful website you visited during your home selling process?

All

27

31% of Sellers Used Mobile Device in 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

Q: How did you use your smart phone, tablet, or other mobile device in the home selling process?

28

14% of Sellers Googled theirAgents

60%

60%
52%

50%
40%
30%
14%

20%
10%
0%
2012

Q: Did you Google your agent?

2013

2014

29

Most Sellers DidntCheckAgentsOnline Ratings

Unsure/can't
remember 1.6%

Didn't check
ratings 83%

Q: Did you check your agents online ratings by prior clients?

Checked ratings
16%

30

16% of Sellers CheckedAgents Online Ratings

Q: Which websites did you check for agent ratings?

31

SELLERS WORKINGWITH
AGENTS

32

Majority of Sellers FoundAgent by

Referral/PersonalContact
Silent

Boomers

Gen X

Gen Y

All

Referral
Personal contact
Previous client
Didn't use agent
Internet
0%
Q. How did you find your real estate agent?

10%

20%

30%

40%

50%

60%

33

2/3 Sellers Interviewed Only 1 Agent

70%

66%

60%
50%
40%
30%
14%

20%

7.9%
10%

1.5%

1.4%

0%
1

5+

Q: How many agents did you interview prior to selecting the agent you used in your recent home selling process?

34

Sellers Interviewed FewerAgents

Average
7.0

6.2

6.0

5.4

5.0

4.4

4.0
3.0

5.0

3.1
2.3

3.5

3.5

3.6

3.5

2.2

2.0

1.5

1.0
0.0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Q: How many agents did you interview prior to selecting the agent you used in your recent home selling process?

35

Reason Seller SelectedAgent

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?

36

Reason Seller SelectedAgent

Silent

Boomers

Gen X

Gen Y

All

Experienced/knowledgeable

Trustworthy

Good reputation

Friend

Knew agent
0%

2%

4%

6%

8%

10%

12%

14%

16%

Q: What was the single most important reason for selecting the agent you used in your recent home sale?

18%

20%

37

Agent Satisfaction Ratings Improve

Category

2011

2012

2013

2014

Value received for what you paid your real estate

agent
Overall satisfaction with the real estate agent

3.1

3.0

3.0

4.4

2.8

2.8

2.7

4.4

Overall satisfaction with the home selling process

2.6

2.5

2.6

4.4

Q: Please rate your degree of satisfaction with your agent for each of the following
Q: Please
your
of satisfaction
your agent
three things using a 1 to 5 scale where 1 is Least
aspects
on arate
scale
ofdegree
1 to 5, where
1 is leastwith
satisfied
and 5on
is these
most satisfied.
Satisfied and 5 is Most Satisfied.

38

Seller Satisfaction Improved

Agent

Selling process

5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

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.

39

Seller Satisfaction withAgent

1. Good/excellent job (30%)

2. Professional/stayed on top
of process (7.6%)
3. Got a quick sale (5.4%)

Q: Please explain why you had that level of satisfaction with your agent.

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%)

40

GoodVariety in Marketing Properties

73%

MLS
Open house

66%

Internet

65%
55%

Privately marketed to agent's network

Virtual tour
Social media

51%
44%
0% 10% 20% 30% 40% 50% 60% 70% 80%

Q: How was your property marketed?

41

Agent / SellerCommunication in Sync

55%

57%

Preferred

Actual

22%
13%

11%

7%

12%

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?

19%

42

Agents Meet Seller ResponseTime Expectations

Actual
30%
25%

Expected

27%

25%
21%

20%

20%

18%

17%

15%

12%

10%

11%11%
7%

4.9%
4.9%

5%

3.5%3.5%

0%
Instantly

Within 30
Minutes

Within 1
Hour

Within 2
Hours

Within 4
Hours

Within 1
business
day

> 1 business
day

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 time in which your agent responded to your communications?

43

Seller ResponseTime Expectations

All

GenY

Gen X

Boomers

Silent

Instantly

21%

5.9%

18%

20%

23%

Within 1 hour

20% 18%

23%

20%

21%

Within 2 hours

11%

24%

19%

7.2%

7.2%

Within 1
business day

25% 35%

18%

29%

22%

Q. What was the typical response time you expected from your agent to return any form of communication to you?

44

Fewer Sellers Expect Instant Response fromAgent

44%

45%

44%

45%

43%

40%
35%

35%
30%
25%
20%
15%

14%

15%

16%

2003

2004

2005

17%

2006

19%

20%

2007

2008

21%

10%
5%
0%
2009

2010

2011

2012

2013

Q. What was the typical response time you expected from your agent to return any form of communication to you?

2014

45

FINANCING

46

SellersWho Had a Mortgage

90%

90%
80%

78%
70%

70%

64%

60%
50%

43%

40%
30%
20%
10%
0%
Gen Y

Gen X

Boomers

Silent

All

47

Majority of Sellers hadTraditional Loans

100%
6%

90%
80%
70%

31%
52%

60%

Interest Only

50%

ARM

40%
30%

0%

FRM

43%

20%
10%

Other

No financing
36%

11%
2013

Q: What type of mortgage did you have?

2014

48

Short SalesContinued Shrinking

Equity Sale
100%
90%
80%
70%

Short Sale
12%

6%

88%

93%

2013

2014

44%

60%
50%
40%
30%
20%

56%

10%
0%
2012
Q: Was the home sold as a short sale?

49

Percentage of Short Sales

12.0%
9.6%

10.0%
8.0%

5.8%

6.0%

5.7%
4.2%

4.0%
2.0%
0.0%

0.0%
Gen Y

Q: Was the home sold as a short sale?

Gen X

Boomers

Silent

All

50

% of Loan Modifications Before Short Sale

60%
50%

50%
40%

40%

43%

43%

30%
20%
10%
0%

0%
Gen Y

Gen X

Boomers

Silent

All

51

1/4 SellersTapped Into their Home Equity

Cash-out Refinance
79%

80%
70%
60%
50%
40%
30%

27%

32%

31%
25%

25%

20%
10%
0%
2009

2010

2011

2012

2013

2014

Q: At the time of your home sale, was any portion of your outstanding mortgage balance due to a cash-out refinance?

52

SellersWhoTapped Into their Home Equity

Cash-out Refinance
35%

31%

30%

25%

23%

25%

25%

20%
15%
10%
5%

0%

0%
Gen Y

Gen X

Boomers

Silent

All

Q: At the time of your home sale, was any portion of your outstanding mortgage balance due to a cash-out refinance?

53

Fewer Sellers Considered Strategic Default

87%
90%

74%

80%
70%
60%
50%

35%
29%

40%
30%
20%
10%
0%
2011

2012

2013

2014

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

SellersWho Considered Strategic Default

43%
45%
40%
35%

29%

30%
20%

25%
20%
15%
10%
5%

0%

0%

0%
Gen Y

Gen X

Boomers

Silent

All

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?

55

ABOUTTHE SELLER

56

First-time Sellers
60%

57%

50%
44%

47%

48%

40%

35%

33%
30%

25%
21%

20%

20%
16%

18%

17%

2005

2006

15%

10%

0%
2002

2003

2004

Q: Was this your first experience in selling a house?

2007

2008

2009

2010

2011

2012

2013

2014

57

First-time Sellers
80%
72%
70%
60%
50%

50%
40%
30%

25%

21%

20%

12%
10%
0%
Gen Y

Gen X

Q: Was this your first experience in selling a house?

Boomers

Silent

All

58

Asians Have Highest Proportion of First-timeSellers

45%

43%

40%
33%

35%
30%

27%
24%

25%

21%

20%
15%
10%
5%
0%
Asian

Black

Q: Was this your first experience in selling a house?

Hispanic

Other

White

59

More SellersAre Repurchasing

100%
19%

90%
80%

31%
45%

53%

58%

70%
60%

88%

50%

81%

40%
30%

69%
55%

47%

42%

20%
10%

12%

0%
2009

2010

2011
Own

*Data from C.A.R. Market Pulse Survey

Q: Do you own or rent your current home?

2012
Rent

2013

2014*

60

SellersAreOptimisticAbout Future Home Prices

Down

Flat

Up

100%
90%
80%
70%
60%

64%

66%

50%
40%
30%
20%

23%

16%

4.5%

5.2%

1 Year

5 Years

10%
0%

Q: Do you think home prices in your neighborhood will go up, down, or stay flat in 1 year? in 5 years?

61

SellersOutlookAbout Future Home Prices

Gen Y

Gen X

Boomers
75%

67%

Silent

All

66%
61%

33%

17%

17%

3%

5% 4% 6% 5%

4% 4% 5%

Down in 1 Year

Up in 5 Years

Q: Do you think home prices in your neighborhood will go?

Down in 5 Years

62

Average Seller is 61YearsOld

Gen Y (1980-1999)

Gen X (1965-1979)

Boomers (1946-1964)

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2014
*Source: U.S. Census Bureau 2013 American Community Survey
Q: What is your age?

CA homeowners*

Seniors (before 1946)

63

Majority of Sellers are Male

Female 45%

Male 55%

64

Most Sellers are Married

Single

Married

Other

120%
100%

17%

17%

16%

16%

50%

48%

50%

22%

20%

19%

12%

4%

80%
60%

53%

61%
46%

47%

32%

33%

48%

71%

40%
20%

30%

34%

37%

35%

0%

*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?

35%

32%
12%

65

Most Sellers are Married

Single

100%

0%

3%

90%

Married

Other

15%

22%

12%

65%

71%

13%

12%

80%
70%
60%
50%

94%

88%

72%

40%
30%
20%
10%
0%

6%

9%

Gen Y

Gen X

13%

Boomers

Q:What was the marital status the head of your household at the time of the sale?

Silent

All

66

Whites are the Majority

White

80%

Hispanic

11%

Other

4.1%

African American

3.2%

Asian

2.1%

0.0%

Q: How would you describe your ethnic background?

20.0%

40.0%

60.0%

80.0%

67

Ethnic Background
100%
90%
80%
70%

Other

60%

Black

50%

Asian
Hispanic

40%

White

30%
20%
10%
0%
Gen Y

Gen X

Boomers

Silent

All

68

Median Household Income: $100,000

$200,000+

14%

$150,000-$199,999

10%

$100,000-$149,999

29%

$75,000-$99,999

18%

$50,000-$74,999

14%

< $50,000

15%
0%

5%

10%

15%

20%

25%

Q: Which of the following categories best describes your total annual household income from all sources?

30%

35%

69

KEYTAKEAWAYS

70

Market Stable for Sellers

Sales improving
Pricing homes correctly
Multiple offers
Homes selling faster
Few short sales

71

SellersGenerally Pleased w/ Sale Process

wouldnt change anything
Agent & selling process ratings improved
Agent-seller communications in sync

72

SellerAdvice 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?

Join us for our next webinar

Understanding California Home

Buyers
Thursday, May 28, 2015
2:00 PM 3:00 PM
To register:

WWW.CAR.ORG/MARKETDATA/VIDEOS

76

THANKYOU!
carmenh@car.org.