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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