1. UNDERSTANDING TODAY’S HOME BUYER Presented by Carmen Hirciag, MBA Senior Research Analyst

2. Survey Methodology 1,400 telephone interviews conducted in February 2014 home buyers who purchased Aug. 2013 – Jan. 2014

3. WHO IS THE 2014 BUYER? Demographics

4. Typical CA Home Buyer

5. Average Age: 48 Q. What is your age?

6. Buyer Age Continues Rising Q. What is your age?

7. Younger Buyers Continue to Decline Q. What is your age?

8. Housing Affordability Index

9. Housing Affordability (State) Peak vs. Current

10. Minimum Annual Income Required Peak vs. Current By Counties, 2014 Q1 vs. 2012 Q1 SERIES: Housing Affordability Index of Existing Detached Homes SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

11. Percent of First-time Buyers Continues Decline Q. Was this your first home purchase?

12. Minorities are the Majority Q. How would you describe your ethnic background?

13. Majority of Buyers are Married

14. Married Buyers on the Decline Q. What is your marital status?

15. More than Half of Buyers have College Degrees Q. What is the highest level of education you have completed?

16. 7/10 Buyers have Annual Household Income > $100K Q. Which of the following categories best represents you total annual income from all sources?

17. Buyers’ Annual Household Income Rises Q. Which of the following categories best represents you total annual income from all sources?

18. Fewer Repeat Buyers Previously Under Water Q. Was the outstanding loan balance on your previous home higher than the sale price?

19. THE BUYING EXPERIENCE

20. Listing Price Rises 7% Q. What was the initial listing price of the home you purchased?

21. Median Purchase Price Rises 25% YTY Q. What was the price of the home you purchased?

22. Purchase Price Q. What was the price of the home you purchased?

23. Purchase/Listing Prices Nearly Equal Q. What was the price of the home you purchased?

24. Median Distance from Previous Residence: 15 Miles Q. How many miles away was your previous residence from the home you bought?

25. Buyers Staying Closer to Previous Residence Q. How many miles away was your previous residence from the home you bought?

26. Nearly 6/10 Buyers Were Previous Home Owners Q. What was the living arrangement immediately before your recent home purchase?

27. More Buyers Owned Previous Residence Q. What was the living arrangement immediately before your recent home purchase?

28. Buyers Spending Less Time than Last Year Considering Purchase Before Contacting Agent Q. How many weeks did you consider buying a home before contacting a real estate agent? (Asked if agent was used) Average Weeks

29. Buyers Spending Less Time than Last Year Investigating Homes & Neighborhoods Before Contacting Agent Q. How many weeks did you spend investigating homes and neighborhoods before contacting a real estate agent? (Asked if agent was used) Average Weeks

30. The Home Search is Getting Lengthier 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)

31. All Buyers Viewed at Least 10 Homes Before Buying Q. How many different homes did you preview and visit with your agent prior to making a purchase?

32. Increase in Homes Viewed Reflects Inventory Improvement Q. How many different homes did you preview and visit with your agent prior to making a purchase? Median

33. 91% of Buyers Made Offers on Other Homes Q. How many offers did you make on other homes?

34. Buyers Made More Offers on Other Homes Q. How many offers did you make on other homes?

35. Price Decreases are Main Reason for Buying Q. What were your main reasons for buying your home?

36. Buyers Didn’t 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 didn’t you buy a home sooner?

37. Nearly Half of 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?

38. 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?

39. Most Buyers Found Home through Agent Q. How did you find the home you purchased?

40. More Buyers are Finding Homes Online Q. How did you find the home you purchased?

41. Most Homes Were Listed on MLS Q. Was the home you purchased listed on a multiple listing service?

42. Fewer Homes Were Listed on MLS Q. Was the home you purchased listed on a multiple listing service?

43. Buyers Plan to Keep Homes Longer Q. How long do you plan to keep the property?

44. Buyers Optimistic About Long Term Direction of Home Prices 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?

45. More Buyers Believe Prices Will Rise Q Do you think home prices in the neighborhood where you purchased will go up in one year, in five years?

46. Internet Use

47. More Buyers Using Mobile Q. Did you use a mobile device in the home buying process?

48. 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

49. Zillow is Most Useful App Q. What was the most useful app that you used during the home buying process? N = 1269

50. Realtor.com & Zillow are Most Useful Websites in Buying Process Q. What was the single most useful website that you visited during your home buying process? Brokerage Agent

51. Realtor.com & Zillow Most Useful Websites Q. What was the single most useful website that you visited during your home buying process?

52. Most Buyers Found Home on Realtor.com or Zillow Q. On which website did you find your home?

53. Realtor.com & Zillow Helped Most Buyers Find Homes Q. On which website did you find your home?

54. Social Media Use Continues Rising Q. Did you use social media (such as Facebook, Twitter, YouTube, etc.) in your home buying process?

55. 77% of Buyers Used Social Media in Buying Process Q. Which social media websites did you use during your home buying process ? N = 1073

56. Social Media Used for Buying Tips & Neighborhood Info Q. How did you use social media (such as Facebook, Twitter, YouTube, etc.) in your home buying process? N = 1073

57. 92% of Buyers are Receptive to Receiving Information via Social Media 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)

58. Fewer Buyers Google their Agent Q. Did you Google your agent…?

59. Internet Info as Useful as Agent Info Q. How would you compare the information you gathered on the Internet to the information provided by your real estate agent? N = 1238

60. Financing

61. Fewer Buyers Obtained Financing Q. Did you obtain financing for your home purchase?

62. More than ¼ Buyers Paid Cash Q. How did you pay for the home you purchased?

63. Most Cash Buyers Used Proceeds from Previous Residence Q. If all cash, where did the funds come from? N = 367

64. Average Down Payment Remains Above 20% Q. What was your down payment for the home purchased, in percent of the home value?

65. Most Buyers Obtain Fixed Rate Loans Q. What type of loan do you have?

66. Fixed Rate Loans Remain Majority Q. What type of loan do you have?

67. 85% of Loans are for 30 Years Q. What was the duration of your loan?

68. Buyers Have Less Difficulty With Financing 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.

69. 2/3 Buyers Did Not Have Appraisal Problems Q. What, if any, problems did you have with the home appraisal when attempting to obtain financing?

70. More Buyers Had Appraisal Problems Q. What, if any, problems did you have with the home appraisal when attempting to obtain financing?

71. BUYER/AGENT RELATIONSHIP

72. Fewer Buyers Used Agent Q. Did you use a real estate agent in your home buying process?

73. Most Buyers Find Agents Online Q. How did you find your real estate agent?

74. More than ¾ Buyers Interviewed at Least 2 Agents Q. How many agents did you interview prior to selecting the agent you used in your recent home purchase?

75. Buyers Continue Interviewing Multiple Agents Q. How many agents did you interview prior to selecting the agent you used in your recent home purchase?

76. Previous Performance Important to Buyers in Selecting Agent Q. What was the single most important reason for selecting the agent that you used in your recent home purchase?.

77. Gap in Phone & Text Communication Q. What was your preferred method of communicating with your agent? Q. How did your agent actually communicate with you?

78. 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

79. Room for Improvement in Agent Response Time 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?

80. Agent Satisfaction Ratings Improve - Average Ratings on 1-5 Scale - 20132014 Your real estate agent’s negotiating skills3.23.4 Overall process of finding a home3.23.3 Overall satisfaction with your real estate agent3.13.3 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”.

81. Buyer Satisfaction Improves Slightly 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”.

82. Reasons for Satisfaction With Agent Q. Why do you have that level of satisfaction with your agent?

83. Reasons for Dissatisfaction With Agent Q. Why do you have that level of satisfaction with your agent?

84. More Buyers Would Work w/Agent Again Q. Would you work with the same agent again?

85. 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?

86. SO WHAT? Key Conclusions & Opportunities

87. Buyer Demographics are Changing

88. Buying Process Begins Before Agent is Contacted

89. Buyers Need Most Agent Assistance in Finding the Right Home Q. In which part(s) of the transaction did you need the most assistance from your agent?

90. 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

91. Importance of Mobile

93. 77% Buyers using social media 92% Buyers receptive to receiving info via social media

94. Financing Buyers had difficulty obtaining financing 54% Lender contacts Loan options Downpayment assistance programs Provide solutions

95. 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?

96. 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?

97. THANK YOU! carmenh@car.org

98. How to Use Statistics to Establish Yourself as a Market Expert Thursday, June 26, 2014 2:00 PM - 3:00 PM To register: WWW. CAR.ORG/MARKETDATA/VIDEOS WWW. CAR.ORG/MARKETDATA/VIDEOS Join us for our next webinar…

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