UNDERSTANDING CALIFORNIA HOME

BUYERS
Presented by
Carmen Hirciag, MBA
Senior Research Analyst

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

THE BUYING EXPERIENCE

Residence Location
Other CA 32%

NorCal 14%

Q. County of most recent home purchase?

SoCal 54%

Distressed SalesContinue Decline

Regular/Equity

REO/Bank Owned

Short

90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2009

2010

2011

2012

2013

2014

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

2015

Most Purchases are Single Family Homes

Condo/townhou
se 13%

Single family
87%

Q. Was the home ?

Vacation/2nd Home Purchases Increase

Primary residence

Investment

Vacation/2nd home

100%
80%
60%
40%
20%
0%
2010

Q What was the intended use of the property?

2011

2012

2013

2014

2015

Listing Price Declines 7.9%YTY

Median
$400,000

$355,000

$380,000

$350,000

$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0
2013
Q. What was the initial listing price of the home you purchased?

2014

2015

Sale/Listing Prices Equal

Median
$350,000

$350,000

$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0
Listing
Q. What was the price of the home you purchased?

Purchase

Many Listing > Purchase Prices

100%
90%
80%
70%
60%

36%

30%

45%

4%
5%

50%
40%

28%

28%

Listing < Purchase

Listing = Purchase
Listing > Purchase

60%

49%

20%

44%

10%
0%
2013

2014

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

2015

Many Homes are in the Suburbs

40%

Suburban
34%

Urban
Within walking distance of
shopping/restaurants/entertainment

28%

Within walking distance of supermarket

26%

Close to public transportation

26%
15%

Rural
0%

Q. Please describe the location of the home. Select all that apply.

10%

20%

30%

40%

50%

More Buyers Previously Lived with Parents

Owned
100%

3%

90%
80%
70%

Rented
7%

Other
2%

6%

12%

40%

48%
54%

60%

Lived w/parents

38%

39%

50%
40%
30%
20%

49%

38%

50%

59%

47%

10%
0%
2011

2012

2013

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

2014

2015

Buyers Spending LessTime Considering Purchase

Before ContactingAgent
25
Average Weeks

20
15
10
5
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Q. How many weeks did you consider buying a home before contacting a real estate agent? (Asked if agent was used)

Buyers Spending LessTime Investigating Homes &

Neighborhoods BeforeContactingAgent
Average Weeks

30
25

Weeks

20
15
10
5
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Q. How many weeks did you spend investigating homes and neighborhoods before contacting a real estate agent?

The Home Search is Longer than Its Ever Been

Average Weeks
14
12
10
8
6
4
2
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
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)

Decrease in HomesViewed ReflectsTight

Inventory
Median
25
20
15
10
5
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Q. How many different homes did you preview and visit with your agent prior to making a purchase?

Top 5 Reasons for Buying

Tired of renting

15%

To have a place to live

14%

Desired larger home

12%

Changed jobs/relocated
Desired better/other location

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

11%
8.4%

Buyers Didnt Purchase Sooner Because

No real buying urgency

22%

Waited until finances improved

21%

Not many good housing options

13%

Waited to see when prices would

stabilize

13%

Needed to save for down payment

12%

Needed to sell current home

Difficulty qualifying for mortgage

Q. Why didnt you buy a home sooner?

8%
5%

Most Buyers Feel their Home isWorth the Price Paid

No, price too
high 14%

No, price too

low 1.4%

Yes 85%

Q. Do you feel the home you purchased is worth the price you paid?

Majority of Buyers Found Home throughAgent

Agent

55%
18%

Website
For sale sign

11%

Open house

8.5%
0%

Q. How did you find the home you purchased?

20%

40%

60%

Buyers Plan to Keep Homes Longer

AverageYears
25

20

20
15
10

8.8
6

5
0
2013

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

2014

2015

BuyersOptimisticAbout LongTerm Direction of

Home Prices
Up

67%

71%

Flat

24%

13%

Down

3%

4%

Unsure

7%

11%

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?

Fewer Buyers Believe PricesWill Rise in 5Years

Up in 1 Yr

Up in 5 Yrs

90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2009

2010

2011

2012

2013

2014

Q Do you think home prices in the neighborhood where you purchased will go up in one year, in five years?

2015

Safety is Most Important in Choosing a

Neighborhood
Category

Safety
Walkability
Quality of schools
Entertainment/cultural activities nearby
Short commute to work
Great restaurants nearby

Rating

8.3
6.5
6.1
5.9
5.6
5.5

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)

Ideal Neighborhood is Suburban & Pedestrianoriented for Majority of Buyers

34%

Suburban
Pedestrian-oriented (high walkability)

21%

Cul-de-sac

21%

Gated community

21%
19%

Rural

17%

Historic

15%

Urban pioneer (up & coming)

12%

Urban core (downtown)

11%

Resort area
5.6%

Ethnic
0%

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

Q 21. Please select which of the following characteristics describe your ideal neighborhood. Select all that apply.

Majority of Buyers are Satisfied with Purchase

Satisfied

12%
13%

Selectd best house given

limited supply in desired
neighborhood

75%

Selected best house in

affordable neighborhood;
prices too high in
preferred neighborhood

Q Are you satisfied with the home you purchased or do you feel like you had to compromise?

27

Technology Use

Zillow & Realtor.com are Most UsefulWebsites in

Buying Process
33%
17%
13%
10%

Agent

10%
0%

5%

10%

15%

20%

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

25%

30%

35%

Realtor.com & Zillow Most UsefulWebsites

Zillow

realtor.com

Brokerage

Redfin

50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
2007

2008

2009

2010

2011

2012

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

2013

2014

2015

Most Buyers are Using Mobile Devices

100%
90%

85%

91%

85%

80%
70%
60%
50%
40%
30%
20%
10%
0%
2013

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

2014

2015

85% of Buyers Used Mobile Device in Buying Process

95%

28%

20%

14%

13%

10%

Research homes
Communicate
Research neighborhoods
Take photos of homes/amenities/neighborhoods
Email
Make calls

Q. How did you use your mobile device in the home buying process? N = 1269

Zillow is Most Useful App

Q. What was the most useful app that you used during the home buying process? N = 1269

Zillow Remains Most Useful App

Zillow

realtor.com

Trulia

45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
2014
Q. What was the most useful app that you used during the home buying process?

2015

 BuyersWho Found Home Online Found it on

Zillow or Redfin
29%

21%

13%

9.4%
0.0%
Q. On which website did you find your home?

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Zillow Remains #1Website where Buyers Found

Home
realtor.com

Zillow

Trulia

Redfin

35%
30%
25%
20%
15%
10%
5%
0%
2011
Q. On which website did you find your home?

2012

2013

2014

2015

Social Media Use Declines

68%

80%

75%

77%

70%
60%

52%

50%
35%

40%
30%
20%
10%
0%
2011

2012

2013

2014

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

2015

Social Media Used for Buying Info &Tips

/Suggestions from Friends
35%

Home buying info

Buying tips, suggestions from friends

31%

Neighborhood info

30%

Agent referrals

27%

Agent's Facebook page

26%

Agents' YouTube

17%
0% 5% 10% 15% 20% 25% 30% 35% 40%

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

35% of Buyers Used Social Media in Buying

Process

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

Facebook RemainsTop Social Media Site for

Buyers
Facebook

YouTube

Twitter

Yelp

90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2014
Q. Which social media websites did you use during your home buying process?

2015

64% of Buyers Didnt Search for Agent Ratings

14%

Zillow

10%

Yelp

9.1%

Trulia

0%

2%

4%

6%

8%

Q. On which agent rating sites did you search for your agents ratings?

10%

12%

14%

16%

62% of Buyers Didnt Rate theirAgent Online

14%

Zillow

10%

Yelp

8.5%

Trulia

0%

2%

4%

6%

Q. On which agent rating sites did you rate your agent?

8%

10%

12%

14%

16%

Fewer BuyersGoogling theirAgent

80%
70%
60%
50%
40%
30%
20%
10%
0%
2007

2008

Q. Did you Google your agent?

2009

2010

2011

2012

2013

2014

2015

Financing

More BuyersObtained Financing

100%

100%

94%

92%

96%

91%

80%
74%

77%

60%
40%
20%
0%
2009

2010

Q. Did you obtain financing for your home purchase?

2011

2012

2013

2014

2015

Nearly Buyers Paid Cash

Cash 23%

Financing 77%

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

MostCash Buyers Used Personal Savings or Proceeds

from Sale of Previous Residence
40%

Personal savings
Proceeds from sale of previous
residence

28%

Proceeds from sale/refi of another

property

18%
17%

Borrowed/gifted
Sale of personal assets

13%

Inheritance

12%
0% 5% 10% 15% 20% 25% 30% 35% 40%

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

Average Down Payment RemainsAbove 20%

Average
35%
30%
25%
20%
15%
10%
5%
0%
2009

2010

2011

2012

2013

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

2014

2015

Most BuyersObtain Fixed Rate Loans

Fixed 83%

Unsure 3.5%
Other 1.1%
Adjustable 13%

Q. What type of loan do you have?

Fixed Rate Loans Remain Majority

Fixed
100%
90%
80%

15%

31%

Adjustable

16%

Other
7%

Unsure
8%

8%
13%

70%
60%
50%
40%
30%

79%

69%

84%

93%

91%

92%

83%

20%
10%
0%
2009

2010

Q. What type of loan do you have?

2011

2012

2013

2014

2015

 Loans are for 30Years

Unsure
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

15%

Other

13%

15 Year

15%

30 Year

14%
17%

85%

87%

85%

86%
75%

2011

Q. What was the duration of your loan?

2012

2013

2014

2015

Buyers Have Less DifficultyWith Financing

Average
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0

8.1

8.5

8.0

8.5

8.6
7.1

4.1

2009

2010

2011

2012

2013

2014

2015

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.

MajorityThink Interest Rates Have Bottomed

No 37%

Yes 63%

Q. Do you think mortgage interest rates have bottomed?

BUYER/AGENT RELATIONSHIP

More Buyers Used an Agent

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Q. Did you use a real estate agent in your home buying process?

Most Buyers FindAgents through Relationship/Contacts

Relationships/Contacts
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Q. How did you find your real estate agent?

Advertising

Internet

Other

Majority of Buyers Interviewed > 1 Agent

45%

42%

40%
35%
30%
25%

17%

20%

12%

15%

9%

10%

4%

5%

3%

3%

4%

3%

3%

10

0%
1

4
5
6
7
# of Agents Interviewed

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

BuyersContinue Interviewing MultipleAgents

3.5

Average

3.0
2.5
2.0

3.2

3.1

2.8
2.3

2.3

2.4

2.5

2.5

2.4

2.4
2.2

2.2
1.8

1.5
1.0
0.5
0.0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Q. How many agents did you interview prior to selecting the agent you used in your recent home purchase?

Being Responsive is Important to Buyers in

Selecting an Agent
Seemed most reponsive

20%

Previously used agent

Trustworthy

10%

8%

Negotiating ability

8%

Knowledgeable/experienced

7%

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

Agents CommunicateAccording to Buyer

Preference
Preferred

49% 52%

22% 21%
12% 12%

Telephone

Email

13% 13%
2% 2%

Text Message

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

Q. How did your agent actually communicate with you?

In Person

Social media

Actual

Fewer Buyers Expect Instant Response from

Agents
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Q. What was the typical response time you expected from your agent to return any form of communication to you?

Agent ResponseTime Meets Buyer Expectations

Expected

Actual

60%
50%
37%

40%
30%

42%

29%
26%

20%

11% 12%

10%

16%
9.0%

10%

7%

0%
Instantly

Within 1 hr.

Within 2 hrs.

Within 4 hrs.

Within 1
business day

Q. On average, what was the actual response time of your agent to return any form of communication to you?
Q. What was the typical response time you expected from your agent to return any form of communication to you?

Agent Satisfaction Ratings Improve

-AverageRatingson1-5Scale-

2014

2015

Your real estate agents negotiating skills

3.4

4.3

Overall process of finding a home

3.3

4.1

Overall satisfaction with your real estate agent

3.3

4.4

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.

Buyer Satisfaction Improves

Process of Finding a Home

Satisfaction with Agent

5
4.5
4
3.5
3
2.5
2
1.5
1
2005 2006 2007 2008 2009 2010

2011

2012

2013

2014

2015

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.

Top 5 Reasons for SatisfactionWithAgent

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

Reasons for DissatisfactionWithAgent

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

Most BuyersWouldWork withAgentAgain

Unsure
10%
2%

10%
3%

30%

25%

46%
3%

15%

No

22%
13%

11%

87%
50%

2005

2006

35%
11%

67%

2004

6%

17%

4%
88%

Yes

2007

Q. Would you work with the same agent again?

61%

64%

2008 2009

26%
33%

12%

22%
85%

72%

2010

28%

4%
11%

54%

60%

2011

2012

52%

2013

61%

2014

2015

Most BuyersWould RecommendAgent to Others

No 11%

Unsure 4%

Yes 85%

Q. Would you recommend your agent to others?

WHO IS THE 2014 BUYER?

Demographics

TypicalCA Home Buyer

TypicalCA Household

Percent of First-time Buyers Rebounds

54%
46%
38%

43%

42%

40%

25%25%

Q. Was this your first home purchase?

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

12%
2004

2003

2002

8% 7%

19%19%

15%

Most Buyers have Not Experienced a DistressedSale

Foreclosure 10%

Short sale 12%

Neither 78%

Q. Have you ever gone through a foreclosure or short sale?

79% of Distressed SalesOccurredAfter 2007

30

# of Distressed Sales

25
20
15
10
5
0
before
2008

2008

2009

2010
Year

Q. What year was the foreclosure or short sale?

2011

2012

2013

More Repeat Buyers Previously UnderWater

23%

25%
20%
15%

12%

10%
4%

5%
0%
2013

2014

Q. Was the outstanding loan balance on your previous home higher than the sale price?

2015

Buyer Gender
Male
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Q. What is your gender?

Female

Majority of Buyers are Over 35

Under 25

25-34

35-44

45-54

55-64

65+

100%
80%
60%
40%
20%

Q. What is your age?

2015

2014

2013

2012

2011

2010

2009

2002
2003
2004
2005
2006
2007
2008

0%

BuyerAge Slightly Declines

Median Age
50

46

45
40

38

35

39

39

40

41

39

39

37

36

35

35

44

36

30
25
20
15
10
5
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Q. What is your age?

Majority of Buyers areWhite

White

64%

Hispanic

15%

Asian

9%

Black

7%

Other

5%
0%

10%

20%

Q. How would you describe your ethnic background?

30%

40%

50%

60%

70%

Majority of Buyers are Married

Other 12%

Single 18%

married 70%

More than Half of Buyers haveCollege Degrees

Graduate
School

22%

4-Year
College
Grad

33%

Some
College

28%

High
School

16%
0%

5%

10%

15%

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

20%

25%

30%

35%

Majority of Buyers haveAnnual Household Income

> $75K
$200,000 +

16%
7%

$150,000-$199,999
$100,000-$149,999

19%

$75,000-$99,999

18%

$50-000-$74,999

22%

< $50,000

18%
0%

5%

10%

15%

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

20%

25%

SO WHAT?
Key Conclusions & Opportunities

Buying Process Begins BeforeAgent isContacted

Safety is Most Important in Choosing a

Neighborhood
Category

Safety
Walkability
Quality of schools
Entertainment/cultural activities nearby
Short commute to work
Great restaurants nearby

Rating

8.3
6.5
6.1
5.9
5.6
5.5

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)

Buyers Need MostAgentAssistance in Negotiating

25%

Negotiate terms of sale

22%

Find the right home

18%

Price negotiation
15%

Paperwork
12%

Determine affordability

11%

Determine comps
0%

5%

10%

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

15%

20%

25%

Top 5 Reasons for Buying

Tired of renting

15%

To have a place to live

14%

Desired larger home

12%

Changed jobs/relocated
Desired better/other location

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

11%
8.4%

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

What BuyersWould ChangeAbout the Home

Buying Experience
1. I would have a better market understanding (14%)
2. Process would be faster & easier (9.1%)
3. Id 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?

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?

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