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1
MARKET PULSEJuly 2015
2
Survey Methodology
•Monthly online survey of 300+ CA REALTORS®
• Respondents are asked about their last closed transaction and business activity in their market area for the previous month and the last year.
3
LAST TRANSACTION
4
Nearly 2/3 of Transactions Closed at the Asking Price or below
Q: Did your last closed transaction sell over, at or below asking price?
Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-150%
10%
20%
30%
40%
50%
60%
34%
0.43
0.24
Over Below At
SERIES: Market Pulse SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
5
Premium Paid Over Asking Price Flat
Q: At what percentage was your last closed transaction sold over asking price?
Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-150.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
7.1%
11.0%11.0%
Average
SERIES: Market Pulse SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
6
Discount on Asking Price Increases
Q: At what percentage was your last closed transaction sold below asking price?
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Av-er-age
-0.0575
-0.0563
-0.0578
-0.062952
-0.1171
-0.1261
-0.11
-0.11
-0.106
-0.11
-0.07
-0.11
-0.096
-13.0%
-11.0%
-9.0%
-7.0%
-5.0%
-3.0%
-1.0%
SERIES: Market Pulse SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
7
67% of Properties Receiving Multiple Offers
Q: How many offers did the seller in your last closed transaction receive?
Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-1540%
45%
50%
55%
60%
65%
70%
75%
80%
66%65%
67%
SERIES: Market Pulse SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
8
Number of Offers Received Remained Flat
Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-150.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2.72.93.0
Average
Q: How many offers did your last closed transaction receive?SERIES: Market Pulse SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
9
Proportion of Properties with Listing Price Reductions increased significantly from prior month
Q: Were there any listing price reductions before escrow opened in your last closed transaction?
Jun-
14
Jul-1
4
Aug-
14
Sep-
14
Oct-1
4
Nov-1
4
Dec-1
4
Jan-
15
Feb-
15
Mar
-15
Apr-1
5
May
-15
Jun-
15
Jul-1
510%
15%
20%
25%
30%
35%
25%
21%
28%
SERIES: Market Pulse SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
10
A marginal increase of Previous Renters
Q: Was the buyer of your last closed transaction a renter immediately prior to purchasing the property?
Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-1520%
25%
30%
35%
40%
45%
50%
55%
32%
37%38%
SERIES: Market Pulse SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
11
Fewer Sellers Becoming Renters
Q: Did the seller of your last closed transaction become a renter immediately after selling the property?
Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-1510%
12%
14%
16%
18%
20%
22%
24%
26%
15%15%
SERIES: Market Pulse SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
12
Share of First-time Buyers Fluctuating Less in Recent Months
Q: Was the buyer of your last closed transaction a first-time buyer?
Jan-
14
Feb-
14
Mar
-14
Apr-1
4
May
-14
Jun-
14
Jul-1
4
Aug-
14
Sep-
14
Oct-1
4
Nov-1
4
Dec-1
4
Jan-
15
Feb-
15
Mar
-15
Apr-1
5
May
-15
Jun-
15
Jul-1
520%
25%
30%
35%
40%
45%
32%
30%
32%
% First-time Buyers Long Run Average
SERIES: Market Pulse SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
13
Majority Purchases are Primary Residences
Q: What was the intended use of the property?
Jan-
14
Feb-
14
Mar
-14
Apr-1
4
May
-14
Jun-
14
Jul-1
4
Aug-
14
Sep-
14
Oct-1
4
Nov-1
4
Dec-1
4
Jan-
15
Feb-
15
Mar
-15
Apr-1
5
May
-15
Jun-
15
Jul-1
50%
10%20%30%40%50%60%70%80%90%
100%
78% 75%78%
15% 16%16%
Primary residence InvestmentVacation home Other
SERIES: Market Pulse SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
14
International Buyers Fluctuate
Q: Was the buyer an international client (one who was not a citizen or permanent resident of the U.S.)?
0%
2%
4%
6%
8%
10%
12%
6.1%7.9% 8.0%
% International Buyers Long Run Average
SERIES: Market Pulse SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
15
MARKET CONDITIONS
16
Floor Calls from Potential Clients Declining
Q: Compared to last month, the number of floor calls from potential clients in your market area this month was …
Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-150%
10%
20%
30%
40%
50%
60%
70%Down Flat Up
SERIES: Market Pulse SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
17
Listing Appointments/Presentations to Clients Slowing Down
Q: Compared to last month, the number of listing appointments and presentations to clients in your market area this month was …
Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-150%
10%
20%
30%
40%
50%
60%
70%Down Flat Up
SERIES: Market Pulse SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
18
Open House Traffic Declining
Q: Compared to last month/year, open house traffic in your market area this month was …
Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-150%
10%
20%
30%
40%
50%
60%
70%
Down Flat Up
SERIES: Market Pulse SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
19
Auctions Steady
Q: Compared to last month/year, the number of auctions in your market area this month was …
0%
10%
20%
30%
40%
50%
60%
70%
80%Down Flat Up
SERIES: Market Pulse SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
20
All Cash Purchases Flattening Out
Q: Compared to last month/year, the number of all cash purchases in your market area this month was …
Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-150%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
34%
46%
19%
Down Flat Up
SERIES: Market Pulse SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
21
1 In 4 REALTORS® Are Concerned About Inventory
Lack
of I
nven
tory
Risin
g Rat
es
Prices
Decre
ase
in A
fforda
bilit
y
Anot
her B
ubbl
e
Econ
omic R
ecov
ery
Polic
ies & R
egul
atio
ns
Uncer
tain
ty0%
5%
10%
15%
20%
25%
30%26%
16%12%
4% 4% 4% 3%1%
Q: What is your biggest concern about the current real estate market?SERIES: Market Pulse SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
22
Majority of REALTORS® Expect Better/Similar Market Conditions Over the Next Year
Q: What are your expectations for market conditions over the next year?
Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-150%
10%
20%
30%
40%
50%
60%
70%
17%
47%
36%
Worsen Same Improve
SERIES: Market Pulse SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
23
Why REALTORS® Expect Market Conditions to Worsen
Rise in interest rates
Poor economy
Uncertainty in market
Decrease in home affordability
Q: Why do you expect real estate market conditions to worsen over the next year?SERIES: Market Pulse SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
24
What are REALTORS® Saying?
Market activity is stagnant.
No longer a sellers market
Escrows are closing late
Buyer and seller expectations are not in sync
Q: Do you have any specific comments, professional observations, or information that you would like to share with us--such as information on multiple bidding, changing buyer preferences, mortgage credit issues, or other topics?
25
Top 10 Counties
Q: In which county do you live?SERIES: Market Pulse SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
June 2015 July 2015
1 Los Angeles Los Angeles
2 San Diego Orange County
3 Riverside Sacramento
4 Orange Santa Clara
5 Alameda San Diego
6 Santa Clara Riverside
7 Sacramento Contra Costa
8 San Luis Obispo Placer
9 Marin Alameda
10 Sonoma San Mateo