Understanding the C.A.R.® Home Buyer Survey

Presented by:

David RomeroPresident & CEO

Tassia BezdekaDir. Tech & Social

Survey Methodology

• 1,400 telephone interviews

• Conducted in February 2014

• Home buyers who purchased Aug. 2013 thru Jan. 2014

SoCal55%

NorCal20%

Other CA 26%

Who is the 2014 Buyer?

Demographics

Typical California Home Buyer

Average Age: 48

12%

32%

26%

25%

7%

25-34

35-44

45-54

55-64

65+

0% 5% 10% 15% 20% 25% 30% 35%

Age

Q. What is your age?

Average Buyer Age Continues Rising

40 41 41 4144

41 4038 37 36 35

38

48

0

10

20

30

40

50

60

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Q. What is your age?

Younger Buyers Continue to Decline

0%

20%

40%

60%

80%

100%

Refused

65+

55-64

45-54

35-44

25-34

Under 25

Q. What is your age?

Housing Affordability (State) Peak vs. Current

0%

10%

20%

30%

40%

50%

60%

70%

80%

US CA SFH CACondo/Townhomes

Los AngelesMetropolitan Area

Inland Empire S.F. Bay Area

59% 33% 41% 34% 48%22%

71%

56%64%

56%

71%

45%

Q1-2014 Q1-2012

Minimum Annual Income Required 2012 vs. Current

• By Counties, 2012 Q1 vs. 2014 Q1

Region 2012 Q1 2014 Q1 % CHG

CA SFH $56,320 $86,419 53%

CA Condo/Townhomes $44,440 $71,994 62%

Los Angeles Metropolitan Area $53,780 $81,195 51%

Inland Empire $35,170 $55,302 57%

S.F. Bay Area $90,370 $140,977 56%

US $32,000 $39,734 24%

SERIES: Housing Affordability Index of Existing Detached HomesSOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Percent of 1st Buyers Continues Decline

8%7%

15%

25% 25%

19% 19%

38%

46%43%

54%

42%

12%

Q. Was this your first home purchase?

Minorities are the Majority

White 36%

Hispanic 26%

Black 12%

Asian/Pacific Islander 26%

Q. How would you describe your ethnic background?

Majority of Buyers are Married

Married 59%Single 27%

Other 14%

Q. What is your marital status?

Married Buyers on the Decline

0%

20%

40%

60%

80%

100%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Married Single Other

Q. What is your marital status?

50%+ of Buyers have College Degrees

HighSchool

SomeCollege

Vocation/Technical

CollegeGrad

PostGrad

0%10%

20%30%

40%50%

7%

11%

23%

50%

11%

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

7 in 10 Buyers Annual Household Income is greater than $100K

$50-000-$74,999

$75,000-$99,999

$100,000-$149,999

$150,000-$199,999

$200,000 +

0%10%

20%30%

3%

25%

27%

27%

17%

Q. Which of the following categories best represents you total annual income from all sources?

Rise in Annual Household Income

0%

20%

40%

60%

80%

100%

$200,000 +

$150,000-$199,999

$100,000-$149,999

$75,000-$99,999

$50-000-$74,999

Under $50,000

Q. Which of the following categories best represents you total annual income from all sources?

The Buying

Experience

Median Purchase Price + 25% YoY

$0

$100,000

$200,000

$300,000

$400,000

$500,000

Q. What was the price of the home you purchased?

Median Purchase Price: $375,000

26%

27%

24%

7%

5%

3%

10%

-5% 5% 15% 25% 35% 45%

$200,000-$299,999

$300,000-$399,999

$400,000-$499,999

$500,000-$599,999

$600,000-$699,999

$700,000-$799,999

$800,000+

Q. What was the price of the home you purchased?

Purchase/Listing Prices Nearly Equal

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

Listing Purchase

$380,000 $375,000

Median

Q. What was the price of the home you purchased?

Median Distance from Previous Residence: 15 Miles

0% 10% 20% 30% 40%

1-10

11-25

26-100

>100

38%

22%

16%

24%

Mil

es

Q. How many miles away was your previous residence from the home you bought?

Buyers Staying Closer to Previous Residence

0

5

10

15

20

25

2013 2014

25

15

Mil

es

Median

Q. How many miles away was your previous residence from the home you bought?

Nearly 6 in 10 Buyers Were Previous Home Owners

Owned59%

Rented40%

Lived with Parents

2%

Q. What was the living arrangement immediately before your recent home purchase?

More Buyers Owned Previous Residence

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2011 2012 2013 2014

Owned Rented Lived w/parents Other

Q. What was the living arrangement immediately before your recent home purchase?

Buyers Spending Less Time than Last Year Considering Purchase Before Contacting Agent

0

5

10

15

20

25

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Q. How many weeks did you consider buying a home before contacting a real estate agent?

(Asked if agent was used)

Average

Weeks

Buyers Spending Less Time than Last Year Investigating Homes & Neighborhoods Before Contacting Agent

0

5

10

15

20

25

30

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Weeks

Q. How many weeks did you spend investigating homes and neighborhoods before contacting a real

estate agent? (Asked if agent was used)

Average

Weeks

The Home Search is Getting Lengthier

0

5

10

15

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Average Weeks

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)

All Buyers Viewed At Least10 Homes Before Buying

29%

16%

37%

19%

10 12-18 20 > 20

Number of Homes

Q. How many different homes did you preview and visit with your agent prior to making a purchase?

Increase in Homes Viewed Reflects Inventory Improvement

0

5

10

15

20

25

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Median

Q. How many different homes did you preview and visit with your agent prior to making a purchase?

91% of Buyers Made Offers on Other Homes

0%

5%

10%

15%

20%

25%

30%

35%

0 1 2 3 4 5+

9% 10% 11%

24%

14%

32%

Number of Offers

Q. How many offers did you make on other homes?

Buyers Made More Offers on Other Homes

3

3.6

0

0.5

1

1.5

2

2.5

3

3.5

4

2013 2014

Average

Q. How many offers did you make on other homes?

Main Reason for Buying:Price Decreases

Change in family

Long term appreciation

Desired larger home

Investment/Tax advantage

Desired better/other location

Favorable price/financing

Low interest rates

Promotion/raise

Price decreases

8%

9%

13%

15%

16%

17%

29%

34%

54%

Q. What were your main reasons for buying your home?

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?

Nearly Half of Buyers Settled on Best Available Home

Satisfied 54%

Selected best option given

limited supply46%

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?

More Buyers Settled on Best Available Home

0%

20%

40%

60%

80%

100%

2013

2014

66%

54%

34%

46%

Satisfied Settled

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?

Most Buyers Found Home through Their Agent

Home builder/developer

For sale sign

Open house

Website

Agent

0%20%

40%60%

2%

3%

3%

39%

54%

Q. How did you find the home you purchased?

More Buyers Find Homes Online

0%

20%

40%

60%

80%

100%

2009 20102011

20122013

2014

Agent Website Other

Q. How did you find the home you purchased?

Buyers Plan to Keep Homes Longer

0

1

2

3

4

5

6

7

8

9

2013 2014

6

8.8Average Years

Q. How long do you plan to keep the property?

Buyers Optimistic About Long Term Direction of Home Prices

60%

26%

14%

81%

10%

9%

Up

Flat

Unsure

1 Year 5 Years

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?

More Buyers Believe Prices Will Rise

60%

81%

8%

35%

0%

20%

40%

60%

80%

100%

In 1 Year In 5 Years

2014

2009

Q Do you think home prices in the neighborhood where you purchased will go up in one

year, in five years?

Financing

Experience

Fewer Buyers Obtained Financing

0%

20%

40%

60%

80%

100%

20092010

20112012

20132014

100%94%

92% 96%91%

74%

Q. Did you obtain financing for your home purchase?

More than ¼ Buyers Paid Cash

Financing74%

Cash, 26%

Q. How did you pay for the home you purchased?

Most Cash Buyers Used Proceeds from Previous Residence

0% 20% 40% 60% 80% 100%

Borrowed/gifted

Pension fund

Proceeds from sale/refi of another property

Inheritance

Personal savings

Sale of personal assets

Proceeds from previous residence

5%

16%

29%

32%

40%

44%

95%

Q. If all cash, where did the funds come from? N = 367

Avg. Down Payment Remains Above 20%

25%

31%

26% 25% 25%28%

0%

5%

10%

15%

20%

25%

30%

35%

2009 2010 2011 2012 2013 2014

Average

Q. What was your down payment for the home purchased, in percent of the home value?

Most Buyers Obtain Fixed Rate Loans

Fixed 92%

Adjustable8%

Q. What type of loan do you have?

Fixed Rate Loans Remain Majority

0%

20%

40%

60%

80%

100%

2009 2010 2011 2012 2013 2014

69%79% 84% 93% 91% 92%

31% 15%16%

7% 8% 8%6%

1%

Fixed Adjustable Other

Q. What type of loan do you have?

85% of Loans are for 30 Years

0%

20%

40%

60%

80%

100%

20112012

20132014

85% 87%85%

86%

15% 13%15% 14%

15 Year 30 Year

Q. What was the duration of your loan?

Buyers Have Less Difficulty With Financing

0.0

2.0

4.0

6.0

8.0

10.0

20092010

20112012

20132014

8.1 8.58.0 8.5 8.6

7.1

Average

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.

2/3 Buyers Did Not Have Appraisal Problems

66%

15%

19%

None

Had to get 2ndappraisalHad to find morerecent comps

Q. What, if any, problems did you have with the home appraisal when attempting to obtain financing?

Internet & Technology

Use

More Buyers Using Mobile

85%91%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014

Q. Did you use a mobile device in the home buying process?

Top Reasons for Using Mobile

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

Realtor.com & Zillow are Most Useful Websites in Buying Process

4%

5%

8%

9%

10%

22%

31%

0% 10% 20% 30% 40%

Q. What was the single most useful website that you visited during your home buying process?

Brokerage

Agent

Realtor.com June 2014 Stats

Realtor.com June 2014 Stats

Most Buyers Found Home on Realtor.com or Zillow

4%

5%

8%

12%

13%

26%

33%

0% 10% 20% 30% 40%

Q. On which website did you find your home?

Social Media Use Continues Rising

0%

10%

20%

30%

40%

50%

60%

70%

80%

2011 2012 2013 2014

52%

68%75% 77%

Q. Did you use social media (such as Facebook, Twitter, YouTube, etc.) in your home buying

process?

77% of Buyers Used Social Media in Buying Process

Q. Which social media websites did you use during your home buying process? N = 1073

Social Media Used for Buying Tips & Neighborhood Info

0% 10% 20% 30% 40% 50%

Agents' YouTube

Neighborhood profiles

Home buying info

Neighborhood amenities

Neighborhood lifestlye

Agent referrals

Agent's Facebook page

Neighborhood info from friends

Buying tips, suggestions from friends

20%

23%

23%

31%

33%

35%

42%

44%

44%

Q. How did you use social media (such as Facebook, Twitter, YouTube, etc.) in your home buying

process? N = 1073

92% of Buyers are Receptive to Receiving Information via Social

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2011 2012 2013 2014

4.2 4.1 4.1 4.1

Average

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)

Most Buyers Find Agents Online

0%

20%

40%

60%

80%

100%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Relationships/Contacts Advertising Internet Other

Q. How did you find your real estate agent?

Fewer Buyers Google their Agent

0%

10%

20%

30%

40%

50%

60%

70%

80%

2007 2008 2009 2010 2011 2012 2013 2014

Q. Did you Google your agent?

Internet Info as Useful as Agent Info

Agent info as useful as

internet info28%

Internet info less useful than agent info 26%

Internet info more useful

than agent info23%

Internet info different from

agent info 19%

Q. How would you compare the information you gathered on the Internet to the information provided

by your real estate agent? (N = 1238)

Buyer/Agent

Relationship

Fewer Buyers Used Agent

74%

86% 86% 84% 86%89% 87%

90% 92% 94% 96%91%

88%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Q. Did you use a real estate agent in your home buying process?

More than ¾ of Buyers Interviewed at Least 2 Agents

0%

5%

10%

15%

20%

25%

1 2 3 4 5 6 7

24% 23%

10%

18%16%

5%4%

# of Agents Interviewed

Q. How many agents did you interview prior to selecting the agent you used in your recent home

purchase?

Buyers Continue to InterviewMultiple Agents

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

2.3 2.3 2.4 2.5 2.5 2.4

2.8

2.2

1.8

2.2

3.2 3.1Average

Q. How many agents did you interview prior to selecting the agent you used in your recent home

purchase?

Previous Performance Important to Buyers in Selecting Agent

3%

7%

8%

13%

13%

22%

29%

Most knowledgeable

Distressed property knowledge

Negotiating ability

1st to respond

Seemed most aggressive

Seemed most reponsive

Previously used agent

Q. What was the single most important reason for selecting the agent that you used in your

recent home purchase?

Gap in Phone & Text Communication

TelephoneEmail

Text MessageIn Person

11%

47%

40%

1%

38%

46%

15%

0%

Preferred Actual

Q. What was your preferred method of communicating with your agent?

Q. How did your agent actually communicate with you?

10%

24%

35%38% 37%

42%44%

49%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2007 2008 2009 2010 2011 2012 2013 2014

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

Room for Improvement in Agent Response Time

0%

10%

20%

30%

40%

50%

60%

Instantly Within 30mins.

Within 1 hr. Within 2 hrs. Within 4 hrs. Same day 1 businessday or longer

49%

29%

16%

4% 2% 0% 0%

18%

7%11%

17%

24%

13%10%

Expected Actual

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?

Satisfaction Ratings Improve- Average Ratings on 1-5 Scale -

2013 2014

Your real estate agent’s negotiating skills 3.2 3.4

Overall process of finding a home 3.2 3.3

Overall satisfaction with your real estate agent 3.1 3.3

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”.

Buyer Satisfaction Improves Slightly

1

1.5

2

2.5

3

3.5

4

4.5

5

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Process of Finding a Home Satisfaction with Agent

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”.

Reasons for Satisfaction With Agent

Worked hard (63%)

Negotiated good deal (38%)

Helped find best home (37%)

Always quick to respond (26%)

Listened to needs (13%)

Q. Why do you have that level of satisfaction with your agent?

Reasons for Dissatisfaction W/ Agent

Slow response (71%)

Didn’t communicate how client wanted (61%)

Agent communicated ineffectively/inefficiently (51%)

Not aggressive in negotiation (40%)

Agent needed to do better job of monitoring transaction/paperwork (13%)

Q. Why do you have that level of satisfaction with your agent?

More Buyers Would Work withAgent Again

88% 87%

50%

67%61% 64%

72%

54% 60%52%

61%

2% 3%

4%

3% 15%13%

11%

11%12% 22%

33%

10% 10%

46%30%

25%22% 17%

35%28% 26%

6%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Unsure No Yes

Q. Would you work with the same agent again?

What Buyers Would Change

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?

Key Opportunities

in 2014 for Your Business

Conclusion

Buyer Demographics are Changing

Buying Process Begins Before Agent is Contacted

5 months before contacting agent

• Buyers consider purchase

5 months before contacting agent

• Buyers investigate homes/ neighborhoods

Target consumers during due

dilligence period

• Provide valuable information

Buyers Need Most Agent Assistance in Finding the Right Home

0% 20% 40% 60% 80%

Determine affordability

Determine comps

Negotiate terms of sale

Price negotiation

Find the right home

30%

56%

60%

75%

79%

Q. In which part(s) of the transaction did you need the most assistance from your agent?

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

Importance of Mobile

Most useful

Where home was found

Advertise on these

websites

Capitalize on Social Media

• Buyers using social media77%

• Buyers receptive to receiving info via social media

92%

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?

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?

Understanding the C.A.R.® Home Buyer Survey

Presented by:

David RomeroPresident & CEO

Tassia BezdekaDir. Tech & Social