1. UNDERSTANDING CALIFORNIA HOME BUYERS Presented by Carmen Hirciag, MBA Senior Research Analyst

2. Survey Methodology 700 telephone interviews and 567 online surveys conducted in February – April 2015 Respondents are home buyers who purchased a home Feb. 2014 – Feb. 2015

3. THE BUYING EXPERIENCE

4. Residence Location Q. County of most recent home purchase?

5. Distressed Sales Continue Decline Q. Was the home you recently bought a Regular Sale, REO/Bank Owned Property, Short Sale, or another type of sale?

6. Most Purchases are Single Family Homes Q. Was the home …?

7. Vacation/2 nd Home Purchases Increase Q What was the intended use of the property?

8. Listing Price Declines 7.9% YTY Q. What was the initial listing price of the home you purchased?

9. Sale/Listing Prices Equal Q. What was the price of the home you purchased?

10. Many Listing > Purchase Prices Q. What was the initial listing price of the home you purchased? Q. What was the price of the home you purchased?

11. Many Homes are in the Suburbs Q. Please describe the location of the home. Select all that apply.

12. More Buyers Previously Lived with Parents Q. What was the living arrangement immediately before your recent home purchase?

13. Buyers Spending Less Time 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

14. Buyers Spending Less Time Investigating Homes & Neighborhoods Before Contacting Agent Q. How many weeks did you spend investigating homes and neighborhoods before contacting a real estate agent? Average Weeks

15. The Home Search is Longer than It’s Ever Been 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)

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

17. Top 5 Reasons for Buying Q. What were your main reasons for buying your home?

18. Buyers Didn’t Purchase Sooner Because… Q. Why didn’t you buy a home sooner?

19. Most Buyers Feel their Home is Worth the Price Paid Q. Do you feel the home you purchased is worth the price you paid?

20. Majority of Buyers Found Home through Agent Q. How did you find the home you purchased?

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

22. 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?

23. Fewer Buyers Believe Prices Will Rise in 5 Years Q Do you think home prices in the neighborhood where you purchased will go up in one year, in five years?

24. Safety is Most Important in Choosing a Neighborhood Q Please rate the importance of the following in your decision to purchase a home in the neighborhood where you purchased. (Scale 1-10, 1=not at all important, 10=extremely important) CategoryRating Safety8.3 Walkability6.5 Quality of schools6.1 Entertainment/cultural activities nearby5.9 Short commute to work5.6 Great restaurants nearby5.5

25. Ideal Neighborhood is Suburban & Pedestrian- oriented for Majority of Buyers Q 21.Please select which of the following characteristics describe your ideal neighborhood. Select all that apply.

26. Majority of Buyers are Satisfied with Purchase Q Are you satisfied with the home you purchased or do you feel like you had to compromise?

27. Technology Use 27

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

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

30. Most Buyers are Using Mobile Devices Q. Did you use a mobile device in the home buying process?

31. 85% of Buyers Used Mobile Device in Buying Process 95% Research homes 28% Communicate 20% Research neighborhoods 14% Take photos of homes/amenities/neighborhoods 13% Email 10% Make calls Q. How did you use your mobile device in the home buying process? N = 1269

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

33. Zillow Remains Most Useful App Q. What was the most useful app that you used during the home buying process?

34. ½ Buyers Who Found Home Online Found it on Zillow or Redfin Q. On which website did you find your home?

35. Zillow Remains #1 Website where Buyers Found Home Q. On which website did you find your home?

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

37. Social Media Used for Buying Info & Tips /Suggestions from Friends Q. How did you use social media (such as Facebook, Twitter, YouTube, etc.) in your home buying process?

38. 35% of Buyers Used Social Media in Buying Process Q. Which social media websites did you use during your home buying process ?

39. Facebook Remains Top Social Media Site for Buyers Q. Which social media websites did you use during your home buying process ?

40. 64% of Buyers Didn’t Search for Agent Ratings Q. On which agent rating sites did you search for your agent’s ratings?

41. 62% of Buyers Didn’t Rate their Agent Online Q. On which agent rating sites did you rate your agent?

42. Fewer Buyers Googling their Agent Q. Did you Google your agent?

43. Financing

44. More Buyers Obtained Financing Q. Did you obtain financing for your home purchase?

45. Nearly ¼ Buyers Paid Cash Q. How did you pay for the home you purchased?

46. Most Cash Buyers Used Personal Savings or Proceeds from Sale of Previous Residence Q. If all cash, where did the funds come from? N = 367

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

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

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

50. ¾ Loans are for 30 Years Q. What was the duration of your loan?

51. 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.

52. Majority Think Interest Rates Have Bottomed Q. Do you think mortgage interest rates have bottomed?

53. BUYER/AGENT RELATIONSHIP

54. More Buyers Used an Agent Q. Did you use a real estate agent in your home buying process?

55. Most Buyers Find Agents through Relationship/Contacts Q. How did you find your real estate agent?

56. Majority of Buyers Interviewed > 1 Agent Q. How many agents did you interview prior to selecting the agent you used in your recent home purchase?

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

58. Being Responsive is Important to Buyers in Selecting an Agent Q. What was the single most important reason for selecting the agent that you used in your recent home purchase?.

59. Agents Communicate According to Buyer Preference Q. What was your preferred method of communicating with your agent? Q. How did your agent actually communicate with you?

60. Q. What was the typical response time you expected from your agent to return any form of communication to you? Fewer Buyers Expect Instant Response from Agents

61. Agent Response Time Meets Buyer Expectations 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?

62. Agent Satisfaction Ratings Improve - Average Ratings on 1-5 Scale - 20142015 Your real estate agent’s negotiating skills3.44.3 Overall process of finding a home3.34.1 Overall satisfaction with your real estate agent3.34.4 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”.

63. Buyer Satisfaction Improves 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”.

64. Top 5 Reasons for Satisfaction With Agent Q. Why do you have that level of satisfaction with your agent?

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

66. Most Buyers Would Work with Agent Again Q. Would you work with the same agent again?

67. Most Buyers Would Recommend Agent to Others Q. Would you recommend your agent to others?

68. WHO IS THE 2014 BUYER? Demographics

69. Typical CA Home Buyer

70. Typical CA Household

71. Percent of First-time Buyers Rebounds Q. Was this your first home purchase?

72. Most Buyers have Not Experienced a Distressed Sale Q. Have you ever gone through a foreclosure or short sale?

73. 79% of Distressed Sales Occurred After 2007 Q. What year was the foreclosure or short sale?

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

75. Buyer Gender Q. What is your gender?

76. Majority of Buyers are Over 35 Q. What is your age?

77. Buyer Age Slightly Declines Q. What is your age?

78. Majority of Buyers are White Q. How would you describe your ethnic background?

79. Majority of Buyers are Married

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

81. Majority of Buyers have Annual Household Income > $75K Q. Which of the following categories best represents you total annual income from all sources?

82. SO WHAT? Key Conclusions & Opportunities

83. Buying Process Begins Before Agent is Contacted

84. Safety is Most Important in Choosing a Neighborhood Q Please rate the importance of the following in your decision to purchase a home in the neighborhood where you purchased. (Scale 1-10, 1=not at all important, 10=extremely important) CategoryRating Safety8.3 Walkability6.5 Quality of schools6.1 Entertainment/cultural activities nearby5.9 Short commute to work5.6 Great restaurants nearby5.5

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

86. Top 5 Reasons for Buying Q. What were your main reasons for buying your home?

88. Communication Important to buyers in agent selection Responsive Trustworthy Negotiation skills Knowledge / experience Communicate better Respond immediately Market skills effectively Communicate according to client preference

89. What Buyers Would Change About the Home Buying Experience 1. I would have a better market understanding (14%)2. Process would be faster & easier (9.1%) 3. I’d seek additional assistance with mortgage approval (7.5%)4. Agent would negotiate better (6.7%)5. Agent would respond faster (6.4%) Q. If there was one thing you could change about the home buying experience, what would it be?

90. Advice to Agents from Buyers Communicate better (17%)Communicate according to client preference (12%)Negotiate better (9.3%)Understand market better (9%)Respond faster (7.6%) Q. What advice would you give to real estate agents to improve the process or the level of service?

91. The Truth About Homeowners—Why They’re Not Selling Thursday, June 25, 2015 2:00 PM - 3:00 PM To register: WWW. CAR.ORG/MARKETDATA/VIDEOS WWW. CAR.ORG/MARKETDATA/VIDEOS Join us for our next webinar…

95. NEW MEMBER BENEFIT

96. MONITOR MINUTE

97. MORE CONSUMER RESEARCH You’ll receive: o Webinars on key trends o Special reports on hot topic issues o Interactive graphics o Big-picture reports and forecasts http://ccre.car.org/informati on/

98. QUESTIONS? carmenh@car.org