1. THE TRUTH ABOUT HOMEOWNERS – WHY THEY’RE NOT SELLING Presented by Carmen Hirciag Senior Research Analyst

2. SALES OF EXISTING DETACHED HOMES California, May 2015 Sales: 423,360 Units, +5.1% YTD, +8.9% YTY *Sales are seasonally adjusted and annualized SERIES: Sales of Existing Single Family Homes SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® May-15: 423,360 May-14: 388,690

3. CALIFORNIA SALES SERIES: Sales of Existing Single Family Homes, Not Seasonally Adjusted SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

4. CHANGE IN SALES BY PRICE RANGE (Year-to-Year) SERIES: Sales of Existing Detached Homes SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

5. SALES BY REGION(EXISTING SFH) SERIES: Sales, Not Seasonally Adjusted SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

6. INVENTORY DROPPED SLIGHTLY FROM LAST YEAR May 2014: 3.7Months; May 2015: 3.5 Months 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®

7. INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT 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®

8. 2015 HOMEOWNER SURVEY About the Home

9. MAJORITY BOUGHT HOME WITHIN THE PAST 15 YEARS Q. In which year did you buy your home?

10. MAJORITY HOMES IN SOCAL Q. In which CA County is the home located?

11. MOST HOMES ARE SINGLE FAMILY Q. What type of home is it?

12. NEARLY ½ HOMES ARE LOCATED IN THE SUBURBS Q. Please select the option below that best describes the location of the home.

13. THOSE WHO BOUGHT WITHIN THE PAST 15 YEARS ARE MORE LIKELY TO LIVE IN URBAN AREAS Q. Please select the option below that best describes the location of the home.

14. MEDIAN PURCHASE PRICE: $265,000 Q. What was the purchase price of the home?

15. MEDIAN PURCHASE PRICE IS TWICE AS HIGH FOR MORE RECENT OWNERS Q. What was the purchase price of the home?

16. MEDIAN HOME VALUE SLIGHTLY HIGHER FOR THOSE WHO’VE OWNED LONGER Q. What is the current value of your home?

17. 2/3 HOMEOWNERS CONDUCTED RESEARCH ON HOME VALUE Q. Have you conducted any research to make this appraisal? Please select all that apply.

18. ¾ HOMEOWNERS HAVE $100K OR MORE EQUITY Q. Approximately how much equity do you have in your home?

19. THOSE WHO’VE OWNED 15+ YEARS HAVE MORE EQUITY Q. Approximately how much equity do you have in your home?

20. MEDIAN HOME EQUITY AMOUNT: $200,000

21. FINANCING 21

22. 24% OF HOME OWNERS DO NOT HAVE A MORTGAGE Q. What type of mortgage do you have?

23. MAJORITY OF HOME OWNERS WITH A MORTGAGE HAVE AN INTEREST RATE LESS THAN 5% Q. What is your current mortgage rate?

24. 27% OF HOME OWNERS HAVE TAPPED INTO THEIR HOME EQUITY Q. Is any portion of your outstanding mortgage balance form a cash-out refinance, second loan or home equity line of credit?

25. 27% OF HOME OWNERS HAVE TAPPED INTO THEIR HOME EQUITY Q. Is any portion of your outstanding mortgage balance form a cash-out refinance, second loan or home equity line of credit?

26. WILL OWNERS SELL THEIR HOMES?

27. 35% HAVE CONSIDERED SELLING Q. On a scale of 1 to 10, how seriously have you thought about selling your home within the past year?

28. AVERAGE RATING Q. On a scale of 1 to 10, how seriously have you thought about selling your home within the past year?

29. WHY HAVE OWNERS CONSIDERED SELLING? Q. Please rate the importance of each of the following in your consideration to possibly sell your home. (1-10 scale) Factors ConsideredAll Owners15 Years+<15 Years Capture equity gain in the home 7.06.77.1 Desire for larger home6.55.07.2 Desire for smaller home5.86.15.6 Change in family status5.65.15.8 Change in employment5.65.15.8 I am retiring5.05.24.9 I can no longer afford my current home 4.74.34.9 Children left home4.7 Children moved back in4.23.64.4

30. 59% OF HOME OWNERS HAVE NOT CONSIDERED SELLING Q. Please rate the importance of each of the following in your decision to not sell your home. (1-10 scale) Reasons for Not SellingAll Owners 15 Years+ <15 Years My current home will be my retirement residence. 7.38.06.7 I'm concerned the property taxes on another home would be too expensive. 5.66.05.3 The price of a home in my desired neighborhood is too high. 4.94.75.1 I'm waiting for the value of my home to increase. 4.84.05.5 The transaction cost of selling and buying is too high. 4.7 I'm concerned the mortgage rate on another home would be too high. 4.64.44.7 I'm concerned it would be difficult to qualify for financing to purchase another home. 3.73.44.1 We need the space (children/family moved back in). 3.22.73.5 I have not been able to find another house to buy because listings are scarce. 3.02.73.3

31. WHAT WOULD PROMPT HOME OWNERS TO SELL? Q. What would prompt you to put your home up for sale within the next year? MotivationsAll Owners 15 Years+<15 Years If I get the price I want for my current home. 6.86.27.2 If I had a gain in my home value. 6.55.77.0 If I knew an equivalent or better house was available to purchase 6.45.76.8 If I could carry over my current property tax bill. 5.9 If I had an increase in my income. 5.95.06.5 If I could carry over my current mortgage rate. 5.44.36.0

32. NEARLY ½ HOME OWNERS HAVE CONSIDERED MOVING OUT OF STATE Q. How seriously have you considered moving out of state? (1-10 scale)

33. 45% OF HOME OWNERS HAVE CONSIDERED MOVING OUT OF STATE Q. How seriously have you considered moving out of state? (1-10 scale)

34. TOP 10 STATES WHERE HOME OWNERS HAVE CONSIDERED MOVING Q. Where have you considered moving?

35. DEMOGRAPHICS

36. HOME OWNER MEDIAN AGE: 51 Q. What is your age?

37. HOME OWNER MEDIAN AGE Q. What is your age?

38. 45% OF HOME OWNERS HAVE CHILDREN RESIDING WITH THEM Q. Do your children currently reside with you in the home?

39. 83% OF CHILDREN RESIDING AT HOME ARE MINORS Q. What is the age of each child living in the home?

40. HOME OWNER MEDIAN ANNUAL HOUSEHOLD INCOME: $77,000 Q. What is your total annual household income?

41. 71% OF HOME OWNERS ARE WHITE Q. What is your ethnic background?

42. THANK YOU! carmenh@car.org

43. California Housing Market Outlook California Housing Market Outlook Thursday, July 30, 2015 2:00 PM – 2:30 PM To register: WWW. CAR.ORG/MARKETDATA/VIDEOS WWW. CAR.ORG/MARKETDATA/VIDEOS JOIN US FOR OUR NEXT WEBINAR…

46. www.rebogateway.com/CAR Generate listing leads using “life event” data 5 to 10 times better chance at acquiring listings Target your efforts to the right doors Extensive training and one-on-one support

47. QUESTIONS? carmenh@car.org