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CALIFORNIA’S FUTURE HOME BUYERS— WHAT YOU NEED TO KNOW TO CONVERT RENTERS INTO BUYERS Presented by Carmen Hirciag, MBA Research Analyst.

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Presentation on theme: "CALIFORNIA’S FUTURE HOME BUYERS— WHAT YOU NEED TO KNOW TO CONVERT RENTERS INTO BUYERS Presented by Carmen Hirciag, MBA Research Analyst."— Presentation transcript:

1 CALIFORNIA’S FUTURE HOME BUYERS— WHAT YOU NEED TO KNOW TO CONVERT RENTERS INTO BUYERS Presented by Carmen Hirciag, MBA Research Analyst

2 2013 C.A.R. Renter Survey Methodology 1,675 telephone & online surveys Conducted in April, May & Aug 2013 with CA renters Overall error range: + 3.5% at 95% confidence interval

3 RENTER DEMOGRAPHICS

4 Gender Q. What is your gender?

5 Renter vs. Buyer Gender Q. What is your gender? (Home Buyer Data from C.A.R Home Buyer Survey)

6 Median Age: 42 Q. What is your age?

7 Renter vs. Buyer Age Q. What is your age? (Home Buyer data from C.A.R Home Buyer Survey)

8 Marital Status Q.What is your marital status?

9 Renter vs. Buyer Marital Status Q.What is your marital status? (Home Buyer Data from C.A.R Buyer Survey)

10 Education Q.What is the highest level of education you have completed?

11 Buyer vs. Renter Education Q.What is the highest level of education you have completed? (Home Buyer Data from C.A.R Buyer Survey)

12 Ethnic Background Q.What is your ethnic background?

13 Renter vs. Buyer Ethnic Background Q.What is your ethnic background? (Home Buyer Data from C.A.R Buyer Survey)

14 Ethnicity by Age Q.What is your ethnic background?

15 Household Income Q.What is your annual household income?

16 Household Income Q.What is your annual household income? (Home buyer data from the C.A.R Home Buyer Survey)

17 Student Loan Debt Q.Do you have any outstanding debt from student loans? Q.How much is the outstanding student loan debt?

18 Other Debt Q.What other type of debt do you have that would make it difficult to buy a home?

19 Residence Location Northern California 23% of respondents 21.3% Occupied Rental Units Median Income: $50,000 Mean Income: $63,689 Median Rent: $1,221 Mean Rent: $1,341 Other 18% of respondents 20.8% Occupied Rental Units Median Income: $24,000 Mean Income: $29,412 Median Rent: $675 Mean Rent: $733 Southern California 57% of respondents 57.9% Occupied Rental Units Median Income: $40,000 Mean Income: $50,031 Median Rent: $1,050 Mean Rent: $1,130

20 Average Household Size: 2.6 Q.How many adults age 18 or older live in the home? Q. How many children under 18 live in the home?

21 Household Composition

22 Single Parents

23 Property Ownership Q: Do you currently own real estate? Q: Have you ever owned a primary residence?

24 Reasons for Selling Primary Residence Q.Why did you sell your primary residence? N = 439

25 Reasons for Selling Primary Residence After 2007 Q.Why did you sell your primary residence? N = 187

26 CURRENT RESIDENCE

27 Type of Rental Q.What type of home do you rent?

28 Number of Bedrooms Q.How many bedrooms do you have?

29 Number of Bathrooms Q.How many bathrooms do you have?

30 Utilities & Amenities Included in Rent Q.Which utilities and amenities are included in your rent? Parking 64% Exercise Facility 13% Water 66% Jacuzzi 13% Trash Collection 66% Central Air Conditioning 19% Sewer 48% Central Heating 21% Appliances 48% Electricity 16% Recycling 38% Club House 11% Storage Space 27% Cable or Satellite 7% Secured Entrance 22% Internet Service 7% Pool 28% Basketball Courts 3% Barbecue Area 18% Tennis Courts 5% Gas 16%

31 Most Important Reason for Selecting Rental Q.What was the most important reason for selecting the place you currently rent?

32 Importance of Each in Selecting Rental (1-10 Scale, 10=Most Important) Q.Please rate how important each of the following was in selecting the home you are currently renting.

33 Years in Current Residence Q.How long have you been renting your current residence?

34 Monthly Rent Q.How much is the monthly rent?

35 Most Recent Rent Increase Q.By how much did the rent increase?

36 Satisfaction with Property Management Q.What is your level of satisfaction with the management of your property?

37 Intention to Remain or Move Q.How much longer do you intend to live in your current residence?

38 How Long Renters and Buyers Intend to Inhabit Current Residence Q.How much longer do you intend to live in your current residence? (Home Buyer Data from C.A.R Buyer Survey)

39 RENTERS AS POTENTIAL BUYERS

40 Importance of Home Ownership Q.How Important is home ownership to you on a scale of one to ten?

41 Advantages of Home Ownership Equity: Investment for future/ for children’s future 47% Freedom/Control: Can do what you want 44% It’s Yours: Ownership / Satisfaction / Pride 35% Tax deductions24% Privacy / Less Noise / Less Crowded 26% Stability / Permanence / Security26% Quality of Life / Better for family19% Bigger / More Space20% No advantage to ownership4% Q.In your opinion, what are the advantages, if any, of home ownership compared to renting?

42 Expect to Buy a Home Q.Do you expect to buy a home in the future?

43 Buying is Good Investment Q.Has the recent ( ) housing crisis made you less likely to consider buying a home a good investment?

44 Buying Still a Good Investment Q.Has the housing crisis that started back in 2007 and 2008 changed your opinion of buying a home as a good investment?

45 When Renters Plan to Buy a Home Q.When do you plan to buy your next home? (N=385 that expect to buy)

46 When Renters Plan to Buy Q.When do you plan to buy your next home? (N=385 that expect to buy)

47 Reasons for Renting Instead of Buying Q.Why do you rent instead of buying?

48 Housing Affordability Index California vs. U.S. % OF HOUSEHOLDS THAT CAN BUY SERIES: Housing Affordability Index of Traditional Buyers SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

49 What Renters Dislike about Renting No equity/Money wasted/No investment 24% No control/No freedom/ Can’t make changes 14% Rent: paying, high, increases, increases unpredictable 15% No sense of ownership / “It’s not mine” 10% Neighbor issues (except noise)6% Property not maintained / No or slow maintenance 5% Landlord/Management Issues3% Lack of privacy3% Rules / Restrictions / Inspections4% Q.What do you dislike about renting?

50 Where Potential Buyers Plan to Buy Q.When you buy your next residence, where do you plan to buy? (N=385 who expect to buy)

51 Most Renters Plan to Purchase a House Q.What type of residence do you plan to purchase? (N=385 that expect to buy)

52 Reasons For Not Planning to Buy a Home Q.Why don’t you expect to buy a home in the future?

53 House Hunting ? … Start Online Q.How would you begin your search for a home to purchase? (N=385 that expect to buy)

54 How Renters and Buyers Will Find their Homes Q.How would you begin your search for a home to purchase? (Home Buyer Data from C.A.R Buyer Survey)

55 Intent to Use a Realtor Q.Do you intend to use a REALTOR to make your home purchase? (N=385 that expect to buy)

56 Meaning of “REALTOR” (Telephone) Positive Description (14%) Helps/Helpful/Helps me (5%) Knowledgeable / Professional (3%) Advisor / Assistant / Guide (2%) Other Positive Description (4%) Selling (14%) Sells houses & property (6%) Salesman / Salesperson (5%) Sell, Sales, Selling, Sell to me (2%) Handles property – buys and sells (1%) Helps you sell your house (0.3%) Negative Description (12%) Negative comment about money (1%) Other Negative Description (11%) Houses/Homes/Real Estate (8%) Houses, Housing, Property (4%) Homes (2%) Real Estate (2%) Buying (9%) Buying a house, Home buying, Buy (3%) Helps you buy a house (2%) Handles property – buys and sells (1%) Buys houses / Buys property (0.3%) Other Descriptions (not in a NET) Friend/Relative / REALTOR they know (6%) Agent / Real Estate Agent (5%) Money (3%) Commission (3%) RE Company / Name of RE Company (2%) Middleman (1%) Broker (1%) Rich (1%) Mortgage (0.4%) Bank (0.4%) Other Description (9%) Other Answers (not in a NET) Irrelevant / No need / Don’t think about it (1%) Nothing / Not Sure / Don’t Know (13%) Q.When I say REALTOR what is the first word that comes to mind?

57 Meaning of “REALTOR” (Online) Positive Description (13%) Helps/Helpful/Helps me (6%) Knowledgeable / Professional (2%) Other Positive Description (5%) Selling (11%) Sells houses & property (2%) Salesman/Salesperson (4%) Sell, Sales, Selling, Sell to me (4%) Handles property – buys and sells (1%) Negative Description (12%) Negative comment about money (1%) Other Negative Description (11%) Houses/Homes/Real Estate (11%) Houses, Housing, Property (5%) Homes (3%) Real Estate (3%) Buying (3%) Buying a house, Home buying, Buy (2%) Handles property – buys and sells (1%) Other Descriptions (not in a NET) Friend/Relative / REALTOR they know (2%) Agent / Real Estate Agent (7%) Money (3%) Commission (2%) RE Company / Name of RE Company (11%) Middleman (1%) Broker (2%) Other Description (16%) Other Answers (not in a NET) Nothing / Not Sure / Don’t Know (10%) Q.When I say REALTOR what is the first word that comes to mind?

58 KEY CONCLUSIONS & OPPORTUNITIES

59 The Typical Renter 54% female 54% white 42 years old 58% single 36% college degree 63% annual income < $75k

60 Intention to Remain or Move Q.How much longer do you intend to live in your current residence?

61 Advantages of Home Ownership Equity: Investment for future/ for children’s future 47% Freedom/Control: Can do what you want 44% It’s Yours: Ownership / Satisfaction / Pride 35% Tax deductions24% Privacy / Less Noise / Less Crowded 26% Stability / Permanence / Security26% Quality of Life / Better for family19% Bigger / More Space20% No advantage to ownership4% Q.In your opinion, what are the advantages, if any, of home ownership compared to renting?

62 Reasons for Renting Instead of Buying Q.Why do you rent instead of buying?

63 Intent to Use a Realtor Q.Do you intend to use a REALTOR to make your home purchase? (N=385 that expect to buy)

64 Upcoming Webinar “Working Effectively with Today's Appraisers” Thursday, Dec. 19, 2 p.m. Register: car.org/MarketData

65 How to Access Presentation

66

67 QUESTIONS? Thank You!


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