Docstoc

California Housing Market 2012 Forecast

Document Sample
California Housing Market 2012 Forecast Powered By Docstoc
					CALIFORNIA HOUSING
MARKET 2012 FORECAST

Leslie Appleton-Young, Chief Economist
Overview

 US and California Economies
 California Housing Market
 CA Regional Housing Markets
 2011 Annual Market Survey
 2012 Housing Market Forecast
U.S. Economic Outlook
             2011: A Year of Wild Cards
                                            Political
                                            Change
                                            on
                 Oil Price Spikes           Capitol
                                            Hill
                                                        Arab Uprising
         Sovereign
         Debt
         Crisis in
         EuroZone

Debt Limit
Ceiling &
Downgrade                      Stock
of US Debt                     Market
                               Volatility
            Gross Domestic Product: Stall Speed
             2010: 2.8%; 2011 Q1: 0.4% Q2: 1.0%
  ANNUAL PERCENT CHANGE, CHAIN-TYPE (2005) $
 8%
 7%
                    ANNUAL                                    QTRLY
 6%
 5%
 4%
 3%
 2%
 1%
 0%
-1%
-2%
-3%
-4%
-5%
-6%
-7%
-8%
     2000



             2002



                     2004



                             2006



                                     2008



                                               2010



                                                      Q2-10



                                                                Q4-10



                                                                        Q2-11
          Components of GDP:
Consumer Spending Weak; Gov’t Sector Down
                         Quarterly Percent Change
  3.0
  2.5                                                           Q3   2010
                                                                Q4   2010
  2.0
                                                                Q1   2011
  1.5                                                           Q2   2011
  1.0
  0.5
  0.0
 -0.5
 -1.0
 -1.5
        Consumption        Fixed Nonres.        Net Exports   Government
                            Investment
SOURCE: US Dept of Commerce, Bureau of Economic Analysis
                      Consumers Pulling Back
                 Home Equity & Reverse Wealth Effect
                Consumer Spending 2011 Q1: 2.7% Q2: 0.4%
8%
                QUARTERLY PERCENT CHANGE
6%

4%

2%

0%

-2%

-4%
      1Q-2000


                  1Q-2001


                            1Q-2002


                                      1Q-2003


                                                1Q-2004


                                                          1Q-2005


                                                                    1Q-2006


                                                                              1Q-2007


                                                                                        1Q-2008


                                                                                                  1Q-2009


                                                                                                            1Q-2010


                                                                                                                      1Q-2011
SOURCE: US Dept of Commerce, Bureau of Economic Analysis
               Unemployment Stubbornly High
                                                   August 2011
California (12.1%) vs. United States (9.1%)
14%
                                                   CA                      US
12%


10%


 8%


 6%


 4%


 2%


 0%
      Jan-00


               Jan-01


                        Jan-02


                                 Jan-03


                                          Jan-04


                                                    Jan-05


                                                             Jan-06


                                                                      Jan-07


                                                                                Jan-08


                                                                                         Jan-09


                                                                                                  Jan-10


                                                                                                           Jan-11
SOURCE: CA Employment Development Division
                U.S. Job Growth: Flat in August
                                       Month-to-Month Changes
                                       Recession Job Losses: 8.4 million
                                          Since Jan’10: +1.8 million
 500,000
 400,000
 300,000
 200,000
 100,000
       0
-100,000
-200,000
-300,000
-400,000
-500,000
-600,000
-700,000
-800,000
-900,000
           Jan-08

                    Apr-08

                             Jul-08

                                      Oct-08

                                               Jan-09

                                                        Apr-09

                                                                 Jul-09

                                                                          Oct-09

                                                                                   Jan-10

                                                                                            Apr-10

                                                                                                     Jul-10

                                                                                                              Oct-10

                                                                                                                       Jan-11

                                                                                                                                Apr-11

                                                                                                                                         Jul-11
SOURCE: US Dept of Labor, Bureau of Labor Statistics
               California Job Growth Faltering
                                           Month-to-Month Changes
                                                        Recession Job Losses: 1.3 million
                                                            Since Jan’10: +188,100
 100000
  80000
  60000
  40000
  20000
      0
  -20000
  -40000
  -60000
  -80000
 -100000
 -120000
 -140000
 -160000
                             May-08




                                                                                    May-09




                                                                                                                                          May-10




                                                                                                                                                                                                May-11
                                                         Nov-08




                                                                                                               Nov-09




                                                                                                                                                                     Nov-10
                    Mar-08




                                               Sep-08




                                                                           Mar-09




                                                                                                      Sep-09




                                                                                                                                 Mar-10




                                                                                                                                                            Sep-10




                                                                                                                                                                                       Mar-11
           Jan-08




                                                                  Jan-09




                                                                                                                        Jan-10




                                                                                                                                                                              Jan-11
                                      Jul-08




                                                                                             Jul-09




                                                                                                                                                   Jul-10




                                                                                                                                                                                                         Jul-11
SOURCE: CA Employment Development Division
                  Where are California’s Jobs?
                      Employment Trends:
             Construction & Financial Biggest Losers

                                                                       Year to
     Industry                                   2005       Jul-11
                                                                        Date
     Mining and Logging                          23,600      27,600       4,000
     Construction                               905,300     567,300    -338,000
     Manufacturing                             1,502,600   1,257,600   -245,000
     Trade, Transportation & Utilities         2,822,100   2,641,500   -180,600
     Information                                473,600     455,400     -18,200
     Financial Activities                       920,300     755,800    -164,500
     Professional & Business Services          2,160,700   2,136,200    -24,500
     Educational & Health Services             1,593,400   1,837,000    243,600
     Leisure & Hospitality                     1,475,200   1,531,600     56,400
     Other Services                             505,500     484,500     -21,000
     Government                                2,420,200 2,380,200      -40,000
     TOTAL                                    14,802,500 14,074,700    -727,800


SOURCE: California Association of REALTORS®
     20
          40
               60
                    80
                         100
                               120
                                     140
                                                             160
Jan-00
Jul-00
Jan-01
Jul-01
Jan-02
                                           INDEX, 100=1985

Jul-02
Jan-03
Jul-03
Jan-04
Jul-04
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
                                                                        August 2011: 44.5




Jan-08
Jul-08
                                                                      Lowest Since April ‘09




Jan-09
Jul-09
                                                                   Consumer Confidence Slipping




Jan-10
Jul-10
Jan-11
Jul-11
                       Crisis of Confidence:
                  Small Business Optimism Down




Source: National Federation of Independent Business
                       Consumer Prices Low but Heading Higher
   CPI August 2011: All Items +3.8% YTY; Core +2.0% YTY

PERCENT CHANGE FROM A YEAR AGO, 100=1982-1984

        6%
                                                                              All Items
        5%
                                                                              Core
        4%

        3%

        2%

        1%

        0%

        -1%

        -2%

        -3%
              Jan-00



                        Jan-01



                                 Jan-02



                                          Jan-03



                                                   Jan-04



                                                            Jan-05



                                                                     Jan-06



                                                                                Jan-07



                                                                                          Jan-08



                                                                                                   Jan-09



                                                                                                            Jan-10



                                                                                                                     Jan-11
Housing
                   California vs. U.S. Sales

                             US Home Sales        CA Home Sales
7,000,000                                                         700,000
6,000,000                                                         600,000
5,000,000                                                         500,000
4,000,000                                                         400,000
3,000,000                                                         300,000
2,000,000                                                         200,000
1,000,000                                                         100,000
        0                                                         0



    SOURCE: California Association of REALTORS®
                   California vs. U.S. Median Price

                           US Median Price        CA Median Price
$600,000

$500,000

$400,000

$300,000

$200,000

$100,000

      $0



    SOURCE: California Association of REALTORS®
                  Housing Affordability: Records Highs
                                                                         California Vs. U.S.
                                                                                                                                                                                     CA                            US
 100%
   % OF HOUSEHOLDS THAT CAN BUY
 90%

 80%

 70%

 60%

 50%

 40%

 30%

 20%

 10%

  0%
        Q1 2000

                  Q3 2000

                            Q1 2001

                                      Q3 2001

                                                Q1 2002

                                                          Q3 2002
                                                                    Q1 2003

                                                                              Q3 2003

                                                                                        Q1 2004

                                                                                                  Q3 2004

                                                                                                            Q1 2005

                                                                                                                      Q3 2005
                                                                                                                                Q1 2006

                                                                                                                                          Q3 2006
                                                                                                                                                    Q1 2007

                                                                                                                                                              Q3 2007

                                                                                                                                                                        Q1 2008

                                                                                                                                                                                  Q3 2008

                                                                                                                                                                                            Q1 2009
                                                                                                                                                                                                      Q3 2009

                                                                                                                                                                                                                Q1 2010

                                                                                                                                                                                                                          Q3 2010

                                                                                                                                                                                                                                    Q1 2011
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
                           CA Underwater Mortgages

                   Negative Equity Share in CA             Near Negative Equity Share in CA
  40%
  35%
                                                                                        30.2%
  30%
  25%
  20%
  15%
  10%
                                                                                                    4.6%
    5%
    0%
              Q4‐2009




                            Q1‐2010




                                       Q2‐2010




                                                 Q3‐2010




                                                                   Q4‐2010




                                                                              Q1‐2011




                                                                                          Q2‐2011
SOURCE: CoreLogic
Monetary Policy
                     Mortgage Rates @ Historical Lows
                  Debt Down Grade Ignited Flight to Quality
                                                            FRM               ARM
6.00%
                                      MONTHLY                                                                             WEEKLY
5.00%

4.00%

3.00%

2.00%

1.00%

0.00%
        2009.01

                  2009.04

                            2009.07

                                      2009.10

                                                2010.01

                                                          2010.04

                                                                    2010.07

                                                                               2010.10

                                                                                         2011.01

                                                                                                   2011.04

                                                                                                             2011.07

                                                                                                                       8.4.11

                                                                                                                                8.25.11

                                                                                                                                          9.15.11
  Classic Liquidity Trap: Consumers Deleveraging
           Low Rates and Low Borrowing
10%

9%

8%

7%

6%

5%

4%

3%

2%                                                             FRM
                                                               ARM
1%
                                                               Federal Funds
0%
      Jan-00


               Jan-01


                        Jan-02


                                 Jan-03


                                          Jan-04


                                                   Jan-05


                                                            Jan-06


                                                                     Jan-07


                                                                              Jan-08


                                                                                       Jan-09


                                                                                                Jan-10


                                                                                                         Jan-11
  SOURCE: Federal Home Loan Mortgage Corporation
Fiscal Policy
                           US Deficit Highest in Decades
                      2010: 11% of GDP (Revenues – Expenses)
     4.0%
                                               Deficit as a % of GDP
     2.0%

     0.0%

    ‐2.0%

    ‐4.0%

    ‐6.0%

    ‐8.0%

  ‐10.0%

  ‐12.0%
             1962
             1964
             1966
             1968
             1970
             1972
             1974
             1976
             1978
             1980
             1982
             1984
             1986
             1988
             1990
             1992
             1994
             1996
             1998
             2000
             2002
             2004
             2006
             2008
             2010
Source: US Treasury, BEA, compiled by C.A.R.
Note: Positive = Surplus
                           US Debt Jumped as Government
                            Responded to Financial Crisis
                                          2010: 93% of GDP
   100.0%
     90.0%
                                           Debt as a % of GDP
     80.0%
     70.0%
     60.0%
     50.0%
     40.0%
     30.0%
     20.0%
     10.0%
      0.0%
               1962
               1964
               1966
               1968
               1970
               1972
               1974
               1976
               1978
               1980
               1982
               1984
               1986
               1988
               1990
               1992
               1994
               1996
               1998
               2000
               2002
               2004
               2006
               2008
               2010
Source: US Treasury, compiled by C.A.R.
Obama Jobs Proposal

 What:
   $450 Billion stimulus: Tax cuts ($250B) and infrastructure 
   spending ($200B)
 Why:
   Economy is stalled/Avoid double‐dip
   Zero job growth in August/high unemployment
   Stabilize confidence: consumer, business, investor 
 How:
   Increase taxes on the rich
   Entitlement Reform
   Tax Reform
Federal Issues – Critical Concerns

 High-cost Loan Limit - expires 10/1/11

 Future of Fannie and Freddie in flux - Increase
 guarantee fee likely

 FHA targeted for market share drop

 Tax Reform on the horizon – MID?

 QRM (Qualified Residential Mortgage)
  20% Down – Is the future of the 30 year
  mortgage in doubt?
                            U.S. Economic Outlook

                             2005      2006   2007   2008   2009   2010 2011f 2012f
                                               •
  US GDP                     3.1% 2.7% 2.0% 0.0% -2.6% 2.9% 1.7% 2.0%

  Nonfarm Job
                             1.7% 1.8% 1.1% -0.6% -4.4% -0.7% 1.0% 0.9%
  Growth

  Unemployment               5.1% 4.6% 4.6% 5.8% 9.3% 9.6% 9.0% 8.9%


  CPI                        3.4% 3.2% 2.8% 3.8% -0.4% 1.6% 3.2% 2.3%

  Real Disposable
  Income, %                  1.3% 4.0% 2.2% 0.5% 0.9% 1.4% 1.7% 1.5%
  Change
   Forecast Date: September 2011
SOURCE: California Association of REALTORS®
                      California Economic Outlook

                         2005        2006        •
                                               2007   2008   2009    2010   2011f 2012f

Nonfarm Job
                         1.8%       1.7%       0.8%   -1.3% -6.0% -1.4%     1.5%   2.1%
Growth

Unemployment
                         5.4%       4.9%       5.4%   7.2% 11.4% 12.4% 12.0% 11.2%
Rate

Population
                         1.2%       1.1%       1.1%   1.2%   1.1%    0.9%   0.9%   0.9%
Growth
Real Disposable
Income, %                1.3%       3.4%       1.5%   0.1%   -2.2%   1.6%   1.5%   2.0%
Change


 Forecast Date: September 2011

 SOURCE: California Association of REALTORS®
California Housing Market
               California Sales of Existing Homes
                        and Median Price
           Housing Cycle Comparisons 1970- 2011
   UNITS/MEDIAN PRICE $                               Sales of Existing Detached Homes                                 Median Price

         700,000
                                                                                                                                                    -44%
         600,000

         500,000
                                                              -61%                           -25%
         400,000

         300,000

         200,000

         100,000

               0
                   1970

                          1972
                                 1974
                                        1976

                                               1978
                                                       1980
                                                               1982

                                                                      1984
                                                                             1986
                                                                                    1988

                                                                                           1990
                                                                                                  1992
                                                                                                         1994
                                                                                                                1996

                                                                                                                        1998
                                                                                                                               2000
                                                                                                                                      2002

                                                                                                                                             2004
                                                                                                                                                    2006
                                                                                                                                                           2008

                                                                                                                                                                  2010
SOURCE: California Association of REALTORS®
                                  Dollar Volume of Sales
                          Down 5% in 2011, Up 3% in 2012
   $ in Billion                                                                                                        % Change
                                                $ Volume of Sales         Percent Change

          $350                                                                                                           50%
                                                        $327
                                  37%                                                                                    40%
          $300

                                         24%                                                                             30%
          $250
                                                26%                                                                      20%

          $200                                          16%                                                              10%
                          2%
          $150                                                                                                 3%        0%
                  $129
                                                                                         -2% -1.0%
                                                                                                       -5%               -10%
          $100
                                                                                        $150           $143    $147
                                                                                                                         -20%
                                                                -19%
            $50                                                                 -22%
                                                                        -27%                                             -30%

             $0                                                                                                          -40%
                   2000


                           2001


                                  2002


                                         2003


                                                 2004


                                                         2005


                                                                 2006


                                                                         2007


                                                                                 2008


                                                                                         2009


                                                                                                2010


                                                                                                        2011


                                                                                                                2012
SOURCE: California Association of REALTORS®
                              Sales of Existing Detached Homes and
                               Pacific West Consumer Confidence
      California, August 2011 Sales: 497,390 Units, Down 0.4% YTD, Up 10.2% YTY

              UNITS                             Sales   Consumer Confidence   INDEX

            700,000                                                           160

            600,000                                                           140
                                                                              120
            500,000
                                                                              100
            400,000
                                                                              80
            300,000
                                                                              60
            200,000
                                                                              40
            100,000                                                           20
                      0                                                       0
                          Jan-00

                          Jan-01

                          Jan-02

                          Jan-03

                          Jan-04

                          Jan-05

                          Jan-06

                          Jan-07

                          Jan-08

                          Jan-09

                          Jan-10

                          Jan-11
                          Jul-00

                          Jul-01

                          Jul-02

                          Jul-03

                          Jul-04

                          Jul-05

                          Jul-06

                          Jul-07

                          Jul-08

                          Jul-09

                          Jul-10

                          Jul-11
SOURCE: California Association of REALTORS®; The Conference Board
*Sales are seasonally adjusted and annualized
                                Median Price of Existing
                                   Detached Homes
        California, August 2011: $297,060, Down 7.4% YTY
  $700,000                                                                   P: May-07
                                                                             $594,530
  $600,000

  $500,000                                                                                           T: Feb-09
                                                                                                      $245,230
  $400,000                                                                                           -59% from
                                                                                                        peak
  $300,000

  $200,000

  $100,000

         $0
              Jan-00

                       Jan-01

                                Jan-02

                                         Jan-03

                                                  Jan-04

                                                           Jan-05

                                                                    Jan-06

                                                                              Jan-07

                                                                                       Jan-08

                                                                                                Jan-09

                                                                                                         Jan-10

                                                                                                                  Jan-11
SOURCE: California Association of REALTORS®
                                                       0
                                                           2
                                                               4
                                                                   6
                                                                       8
                                                                           10
                                                                                12
                                                                                     14
                                                                                          16
                                                                                               18
                                                                                                    20
                                              Jan-88

                                                                                                         MONTHS
                                              Jan-89
                                              Jan-90
                                              Jan-91
                                              Jan-92
                                              Jan-93
                                              Jan-94
                                              Jan-95
                                              Jan-96
                                              Jan-97
                                              Jan-98




SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
                                              Jan-99
                                              Jan-00
                                              Jan-01
                                              Jan-02
                                              Jan-03
                                              Jan-04
                                              Jan-05
                                                                                                                                                        Unsold Inventory Index




                                              Jan-06
                                              Jan-07
                                              Jan-08
                                                                                                                  California, August 2011: 5.0 Months




                                              Jan-09
                                              Jan-10
                                              Jan-11
                     Unsold Inventory Index (Months)


     Price Range (Thousand)                   Aug-10 Jul-11 Aug-11

   $1,000K+                                     11.1    9.2    9.1
   $750-1000K                                    7.0    6.9    6.2
   $500-750K                                     6.4    6.3    5.6
   $300-500K                                     5.7    5.6    5.2
   $0-300K                                       4.8    5.1    4.6




SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
                               Unsold Inventory By Price Range
                                                                          Jan 2005 – August 2011
    MONTHS
     30
                             $0 - 300K

                             $300-500K
      25
                             $500-750K

                             $750-1000K
      20                     $1,000K+-

                             All

      15


      10


       5


       0
                    Apr-05


                                      Oct-05


                                                        Apr-06


                                                                          Oct-06




                                                                                                              Oct-07




                                                                                                                                                  Oct-08




                                                                                                                                                                                      Oct-09




                                                                                                                                                                                                                          Oct-10
                             Jul-05




                                                                 Jul-06



                                                                                            Apr-07
                                                                                                     Jul-07



                                                                                                                                Apr-08
                                                                                                                                         Jul-08



                                                                                                                                                                    Apr-09
                                                                                                                                                                             Jul-09



                                                                                                                                                                                                        Apr-10
                                                                                                                                                                                                                 Jul-10



                                                                                                                                                                                                                                            Apr-11
                                                                                                                                                                                                                                                     Jul-11
           Jan-05




                                               Jan-06




                                                                                   Jan-07




                                                                                                                       Jan-08




                                                                                                                                                           Jan-09




                                                                                                                                                                                               Jan-10




                                                                                                                                                                                                                                   Jan-11
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Market Breakdown:
Equity v. Distressed
       Sales
            Share of Distressed Sales to Total Sales

60%                                   Aug-10         Jul-11   Aug-11



                                                                          44.5%   42.9%   43.7%
40%


          24.7%     25.2%    24.4%
                                         19.3%                    18.9%
20%                                                   17.5%




0%
                    REOs                            Short Sales              Distressed Sales

      SOURCE: California Association of REALTORS®
                Share of Equity Sales
             Increased Throughout 2011
                       Equity Sales   Short Sale     Bank Owned

  60%


  50%


  40%


  30%


  20%


  10%


   0%
     Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11


SOURCE: ForeclosureRadar.com
               Price Trends by Sale Type
                      Equity Sales   Short Sale   Bank Owned

 25%

 20%

 15%

 10%

   5%

   0%

  -5%

 -10%

 -15%

 -20%
        Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11


SOURCE: ForeclosureRadar.com
                    Tight Supply of Inventory
                          for REO Sales
                               Aug‐11
Unsold
Inventory Index
(Months)
                                               8.1
   9
   8
   7                5.7
   6
   5
   4                             2.6
   3
   2
   1
   0
            Equity Sales   REO Sales    Short Sales
                Distressed Sales: Bay Area
                       (Percent of Total Sales)
                                           Aug-11
 100%

   80%
                                                             71%
   60%
                            48%

   40%           27%                                                 43%
                                      25%           31%
    20%

      0%
             Marin
                        Napa
                                    San
                                   Mateo      Santa
                                              Clara       Solano
                                                                   Sonoma


SOURCE: California Association of REALTORS®
                REO & Short Sales: Bay Area
                          (Percent of Total Sales)
100%                                   Aug 2011

 80%                                     REO Sales
                                         Short Sales
 60%
                                                          26%
  40%                    20%
               15%                                                18%
  20%
                          28%       15%         21%       45%
                13%
    0%                               11%
                                                10%               24%
            Marin
                      Napa
                                  San
                                 Mateo        Santa
                                              Clara    Solano
                                                                Sonoma


SOURCE: California Association of REALTORS®
                       Distressed Sales: Southern CA
                                  (Percent of Total Sales)
                                                 Aug-11
         100%

           80%
                                                   62%         64%
           60%
                           44%

           40%                         33%


            20%                                                            27%


             0%
                       Los
                     Angeles      Orange
                                              Riverside
                                                             San
                                                          Bernardino   San Diego


SOURCE: California Association of REALTORS®
            REO & Short Sales: Southern CA
                          (Percent of Total Sales)

 100%                                   Aug 2011

   80%                       REO Sales
                             Short Sales
   60%
                                                         14%
                                              26%
   40%
                  24%

    20%                        20%
                   20%                        35%        49%
                               12%                                    8%
     0%
                                                                     19%
               Los
             Angeles      Orange
                                      Riverside
                                                       San
                                                    Bernardino   San Diego
SOURCE: California Association of REALTORS®
              Distressed Sales: Central Valley
                           (Percent of Total Sales)
                                              Aug-11
  100%

                    73%
    80%
                                               67%
                                59%
    60%                                                     62%
                                                                      60%

    40%

     20%

       0%
              Madera
                           Merced
                                      San Benito
                                                       Sacramento
                                                                    Kern
SOURCE: California Association of REALTORS®
           REO & Short Sales: Central Valley
                          (Percent of Total Sales)

100%                                   Aug 2011
                                                          REO Sales
  80%                                                     Short Sales
                  7%
  60%
                              23%             30%
   40%                                                   24%            19%
                  67%

   20%                        36%
                                              37%
                                                         38%            41%
     0%
             Madera
                         Merced
                                    San Benito
                                                    Sacramento
                                                                   Kern

SOURCE: California Association of REALTORS®
           Distressed Sales: Rest of California
                           (Percent of Total Sales)
                                          Aug-11
  100%

    80%
                59%                 64%
    60%                                       62%
                      42%
                                                    45%               56%
     40%                     31%                                48%
                                                          35%
     20%

       0%




SOURCE: California Association of REALTORS®
         Distressed Sales: Rest of California
                             (Percent of Total Sales)
  100%                                    Aug 2011

    80%
                                                      Short Sales
                                                      REOs
    60%
               11%                  7%

     40%               8%                     25%
                                                                         5%
                48%           7%    57%
                                                    13%             9%
     20%               34%
                             25%              36%         20%
                                                    32%                  51%
       0%                                                       39%
                                                          15%




SOURCE: California Association of REALTORS®
                                                      California Foreclosure Filings
                                                                                                                     August 2011

     NTS: 24,260, -16.9% YTD • NOD: 32,338, -21.5% YTD
                                    Notice of Trustee Sale - Counts                                                                                          Notice of Defaults - Counts


         65,000                                                                                                                                                                                          6 Month Average:
         60,000
                                                                                                                                                                                                         NTSs: 23,806
         55,000
         50,000                                                                                                                                                                                          NODs: 23,625
         45,000
         40,000
         35,000
         30,000
         25,000
         20,000
         15,000
         10,000
          5,000
              0
                                                               Nov-07




                                                                                                                     Nov-08




                                                                                                                                                                           Nov-09




                                                                                                                                                                                                                                 Nov-10
                                                      Sep-07




                                                                                                            Sep-08




                                                                                                                                                                  Sep-09
                                             Jul-07




                                                                                                                                                                                                                        Sep-10
                  Jan-07




                                                                        Jan-08



                                                                                                   Jul-08



                                                                                                                              Jan-09



                                                                                                                                                         Jul-09



                                                                                                                                                                                    Jan-10



                                                                                                                                                                                                               Jul-10



                                                                                                                                                                                                                                          Jan-11



                                                                                                                                                                                                                                                                     Jul-11
                                    May-07




                                                                                          May-08




                                                                                                                                                May-09




                                                                                                                                                                                                      May-10




                                                                                                                                                                                                                                                            May-11
                           Mar-07




                                                                                 Mar-08




                                                                                                                                       Mar-09




                                                                                                                                                                                             Mar-10




                                                                                                                                                                                                                                                   Mar-11
SOURCE: ForeclosureRadar.com
                                                CA Foreclosure Outcomes
                                                                                     August 2011
      REO: -12.2% YTD • 3rd Party: -4.1% YTD • Cancel: -19.7% YTD
                                                  REOs                     Sold to 3rd Party                             Cancellations

                                                                                                                                                             6 Month Average:
            30,000
                                                                                                                                                             REO: 10,880
            25,000                                                                                                                                           3rd Party: 3,616
                                                                                                                                                             Cancelled: 14,447
            20,000


            15,000


            10,000


             5,000


                 0
                              Apr-07



                                                Oct-07



                                                                  Apr-08



                                                                                     Oct-08



                                                                                                       Apr-09



                                                                                                                         Oct-09



                                                                                                                                           Apr-10



                                                                                                                                                              Oct-10



                                                                                                                                                                                Apr-11
                     Jan-07



                                       Jul-07



                                                         Jan-08



                                                                            Jul-08



                                                                                              Jan-09



                                                                                                                Jul-09



                                                                                                                                  Jan-10



                                                                                                                                                    Jul-10



                                                                                                                                                                       Jan-11



                                                                                                                                                                                         Jul-11
SOURCE: ForeclosureRadar.com
                                       CA Foreclosure Inventories
                                                                                     August 2011
              Preforeclosure: -17.5% YTD • Schedule for Sale: -17.8% YTD •
                                 Bank Owned: 7.0% YTD
                                                                                                                                                                          6 Month Average:
                                       Preforeclosure                                Scheduled for Sale                                     Bank Owned Preforeclosure: 115,742

                                                                                                                                                                          Schedule for Sale:
           200,000                                                                                                                                                        105,138
                                                                                                                                                                          Bank Owned: 108,635

           150,000



           100,000



            50,000



                0
                                        Jul-07

                                                 Oct-07

                                                          Jan-08

                                                                   Apr-08

                                                                            Jul-08

                                                                                      Oct-08

                                                                                               Jan-09

                                                                                                        Apr-09

                                                                                                                 Jul-09
                     Jan-07

                              Apr-07




                                                                                                                          Oct-09

                                                                                                                                   Jan-10

                                                                                                                                              Apr-10

                                                                                                                                                       Jul-10

                                                                                                                                                                Oct-10

                                                                                                                                                                         Jan-11

                                                                                                                                                                                  Apr-11

                                                                                                                                                                                           Jul-11
SOURCE: ForeclosureRadar.com
                   San Jose
Preforeclosure: 1,367 • Auction: 2,166 •
           Bank Owned: 617




         Source: ForeclosureRadar.com as of 08/19/11
                             Santa Clara
                 Preforeclosure: 86 • Auction: 131 • Bank Owned: 41




Source: ForeclosureRadar.com as of 08/19/11
                       Palo Alto
Preforeclosure: 17 • Auction: 21 • Bank Owned: 4




              Source: ForeclosureRadar.com as of 08/11/11
                       San Francisco
Preforeclosure: 525 • Auction: 681 • Bank Owned: 179




               Source: ForeclosureRadar.com as of 08/11/11
                            South Lake Tahoe
              Preforeclosure: 113 • Auction: 112 • Bank Owned: 77




Source: ForeclosureRadar.com as of 08/11/11
                                Sacramento
                 Preforeclosure: 2,216 • Auction: 1,905 • Bank Owned: 1,560




Source: ForeclosureRadar.com as of 08/19/11
                                    Stockton
             Preforeclosure: 895 • Auction: 1,093 • Bank Owned: 691




Source: ForeclosureRadar.com as of 08/11/11
                                  Los Angeles
                 Preforeclosure: 2,975 • Auction: 4,659 • Bank Owned: 1,331




Source: ForeclosureRadar.com as of 09/19/2011
                                       Anaheim
            Preforeclosure: 498 • Auction: 667 • Bank Owned: 219




Source: ForeclosureRadar.com as of 09/14/11
                                     Irvine
               Preforeclosure: 262 • Auction: 360 • Bank Owned: 92




Source: ForeclosureRadar.com as of 09/14/11
                                 Newport Beach
             Preforeclosure: 124 • Auction: 154 • Bank Owned: 18




Source: ForeclosureRadar.com as of 09/14/11
                                   San Diego
                Preforeclosure: 2,016 • Auction: 2,001 • Bank Owned: 797




Source: ForeclosureRadar.com as of 09/19/2011
Commercial Market
Commercial Outlook
    Industrial
   US Vacancy Rate 2011-2013: 13.0, 12.2%, 10.0%
   Better in LA, Orange County, San Bernardino,
    San Diego, and Oakland than elsewhere in US
   Need gains in trade and mfg to improve
    Retail
   US Vacancy Rate 2011-2013: 13.0%, 12.3%,
    11.5%
   Vacancy rates lower in most CA metro areas,
    except Sacramento
   Fundamentals weak across markets of the state,
    need increased consumer spending to reverse
    trend
Commercial Outlook

    Office
   US Vacancy Rate 2011-2013: 16.6%, 16.4%,
    16.0%
   Weak markets because of job losses across
    many sectors
   SF and LA outperforming the US


    Multi-Family
   US Vacancy Rate 2011-2013: 5.6, 4.7%, 4.4%
   All CA metro areas outperform US averages
   Push from problems in owner-occupied sector
Regional Housing
    Markets
Northern California
                                    Sales of Existing Detached Homes and
                                     Pacific West Consumer Confidence
      Northern CA, August 2011: 1,242 Units, Up 9.3% YTD, Up 24.6% YTY
              UNITS                                                Sales               Consumer Confidence                                                      INDEX

             1,800                                                                                                                                                160

             1,600                                                                                                                                                140

             1,400
                                                                                                                                                                  120
             1,200
                                                                                                                                                                  100
             1,000
                                                                                                                                                                  80
               800
                                                                                                                                                                  60
               600
                                                                                                                                                                  40
               400

               200                                                                                                                                                20

                 0                                                                                                                                                0
                      Jan-97

                               Jan-98

                                        Jan-99

                                                 Jan-00

                                                          Jan-01

                                                                     Jan-02

                                                                              Jan-03

                                                                                        Jan-04

                                                                                                 Jan-05

                                                                                                          Jan-06

                                                                                                                   Jan-07

                                                                                                                            Jan-08

                                                                                                                                     Jan-09

                                                                                                                                              Jan-10

                                                                                                                                                       Jan-11
SOURCE: California Association of REALTORS®;
SOURCE: California Association of REALTORS®; The Conference Board
The Conference Board
                      Home Sales in Northern California
                                              Aug-10   Aug-11

   450

   400

   350

   300

   250

   200

   150

   100

     50

      0
           Butte   Humbolt    Lake Paradise Placer     Shasta Siskiyou   South   Tahoe    Tehama
                             County         County            County      Lake   Sierra
SOURCE: California Association of REALTORS®                              Tahoe
                   Median Price of Existing Detached Homes
               Northern CA, August 2011: $223,890, Down 11.5% YTY
           $450,000

           $400,000

           $350,000

           $300,000

           $250,000

           $200,000

           $150,000

           $100,000

            $50,000

                 $0
                      Jan-97

                               Jan-98

                                        Jan-99

                                                 Jan-00

                                                          Jan-01

                                                                   Jan-02

                                                                            Jan-03

                                                                                     Jan-04

                                                                                              Jan-05

                                                                                                       Jan-06

                                                                                                                Jan-07

                                                                                                                         Jan-08

                                                                                                                                  Jan-09

                                                                                                                                           Jan-10

                                                                                                                                                    Jan-11
 SOURCE: California Association of REALTORS®
SOURCE: California Association of REALTORS®
                Median Price of Existing Detached Homes
                             Northern California
               Region                Aug-10    Jul-11     Aug-11   M-t-M   Y-t-Y
       Butte                        $243,420   $196,430   $201,320   2.5% -17.3%
       Humbolt                      $252,780   $232,999   $223,863 -3.9% -11.4%
       Lake County                  $132,857   $118,888   $123,636   4.0% -6.9%
       Paradise                     $194,999   $134,999   $163,333 21.0% -16.2%
       Placer County                $292,499   $264,383   $266,233   0.7% -9.0%
       Shasta                       $171,176   $154,705   $162,917   5.3% -4.8%
       Siskiyou County              $130,000   $130,000   $116,666 -10.3% -10.3%
       South Lake Tahoe             $295,454   $238,888   $338,889 41.9% 14.7%
       Tahoe Sierra                 $474,999   $397,221   $450,000 13.3% -5.3%
       Tehama                       $127,500   $131,428   $123,333 -6.2% -3.3%



SOURCE: California Association of REALTORS®
 SOURCE: California Association of REALTORS®
Northern Wine Country
                                  Sales of Existing Detached Homes and
                                   Pacific West Consumer Confidence
                                                 Northern Wine Country, Aug. 2011:
                                               620 Units, Up 3.2% YTD, Up 17.2% YTY
          UNITS                                                                  Sales                   Consumer Confidence                                                                                    INDEX
       1000                                                                                                                                                                                                          160
         900                                                                                                                                                                                                         140
         800
                                                                                                                                                                                                                     120
         700
         600                                                                                                                                                                                                         100
         500                                                                                                                                                                                                         80
         400                                                                                                                                                                                                         60
         300
                                                                                                                                                                                                                     40
         200
         100                                                                                                                                                                                                         20
           0                                                                                                                                                                                                         0
               Jan-90
                        Jan-91
                                 Jan-92
                                          Jan-93
                                                   Jan-94
                                                            Jan-95
                                                                     Jan-96
                                                                              Jan-97
                                                                                       Jan-98
                                                                                                Jan-99
                                                                                                         Jan-00
                                                                                                                  Jan-01
                                                                                                                           Jan-02
                                                                                                                                    Jan-03
                                                                                                                                             Jan-04
                                                                                                                                                      Jan-05
                                                                                                                                                               Jan-06
                                                                                                                                                                        Jan-07
                                                                                                                                                                                 Jan-08
                                                                                                                                                                                          Jan-09
                                                                                                                                                                                                   Jan-10
                                                                                                                                                                                                            Jan-11
SOURCE: California Association of REALTORS®; The Conference Board
                   Home Sales in Northern Wine Country
                                              Aug-10   Aug-11

   500

   450

   400

   350

   300

   250

   200

   150

   100

    50

      0
                 Mendocino                         Napa         Sonoma

SOURCE: California Association of REALTORS®
                  Median Price of Existing Detached Homes
                              Northern Wine Country, August 2011:
                                  $330,070, Down 12.5% YTY
           $700,000

           $600,000

           $500,000

           $400,000

           $300,000

           $200,000

           $100,000

                   $0
                        Jan-90
                        Jan-91
                        Jan-92
                        Jan-93
                        Jan-94
                        Jan-95
                        Jan-96
                        Jan-97
                        Jan-98
                        Jan-99
                        Jan-00
                        Jan-01
                        Jan-02
                        Jan-03
                        Jan-04
                        Jan-05
                        Jan-06
                        Jan-07
                        Jan-08
                        Jan-09
                        Jan-10
                        Jan-11
SOURCE: California Association of REALTORS®
                Median Price of Existing Detached Homes
                                       Northern Wine Country


       Region               Aug-10            Jul-11    Aug-11     M-t-M    Y-t-Y

Mendocino                $ 258,330        $ 214,290    $ 201,920    -5.8%   -21.8%
Napa                     $ 394,230        $ 334,780    $ 354,760     6.0%   -10.0%
Sonoma                   $ 378,830        $ 333,490    $ 339,200     1.7%   -10.5%




SOURCE: California Association of REALTORS®
Bay Area
                                    Sales of Existing Detached Homes and
                                     Pacific West Consumer Confidence
                  Bay Area, August 2011: 3,895 Units, Up 0.5% YTD,
                                   Up 12.1% YTY
         UNITS                                                                                                                                                                                                                     INDEX
                                                                                 Sales                      Consumer Confidence
          8,000                                                                                                                                                                                                                           160

          7,000                                                                                                                                                                                                                           140

          6,000                                                                                                                                                                                                                           120

          5,000                                                                                                                                                                                                                           100

          4,000                                                                                                                                                                                                                           80

          3,000                                                                                                                                                                                                                           60

          2,000                                                                                                                                                                                                                           40

          1,000                                                                                                                                                                                                                           20

              0                                                                                                                                                                                                                           0
                           Jul-00


                                             Jul-01


                                                               Jul-02


                                                                                 Jul-03


                                                                                                   Jul-04


                                                                                                                     Jul-05


                                                                                                                                       Jul-06


                                                                                                                                                         Jul-07


                                                                                                                                                                           Jul-08


                                                                                                                                                                                             Jul-09


                                                                                                                                                                                                               Jul-10


                                                                                                                                                                                                                                 Jul-11
                  Jan-00


                                    Jan-01


                                                      Jan-02


                                                                        Jan-03


                                                                                          Jan-04


                                                                                                            Jan-05


                                                                                                                              Jan-06


                                                                                                                                                Jan-07


                                                                                                                                                                  Jan-08


                                                                                                                                                                                    Jan-09


                                                                                                                                                                                                      Jan-10


                                                                                                                                                                                                                        Jan-11
SOURCE: California Association of REALTORS®; The Conference Board
        Home Sales in Bay Area Counties
                                    Aug-10    Aug-11

1400

1200

1000

 800

 600

 400

 200

   0
       Alameda    Contra    Marin   Napa      San San Mateo Santa   Solano   Sonoma
                  Costa                    Francisco        Clara
                 (Central
                 County)
                                              SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
               Median Price of Existing Detached Homes
             Bay Area, August 2011: $498,190, Down 9.2% YTY
           $900,000


           $800,000


           $700,000


           $600,000


           $500,000


           $400,000


           $300,000
                      Jan-00
                               Jul-00
                                        Jan-01
                                                 Jul-01
                                                          Jan-02
                                                                   Jul-02
                                                                            Jan-03
                                                                                     Jul-03
                                                                                              Jan-04
                                                                                                       Jul-04
                                                                                                                Jan-05
                                                                                                                         Jul-05
                                                                                                                                  Jan-06
                                                                                                                                           Jul-06
                                                                                                                                                    Jan-07
                                                                                                                                                             Jul-07
                                                                                                                                                                      Jan-08
                                                                                                                                                                               Jul-08
                                                                                                                                                                                        Jan-09
                                                                                                                                                                                                 Jul-09
                                                                                                                                                                                                          Jan-10
                                                                                                                                                                                                                   Jul-10
                                                                                                                                                                                                                            Jan-11
                                                                                                                                                                                                                                     Jul-11
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
                  Median Price of Existing Detached Homes
                                      Bay Area Counties


                County                Aug-10        Jul-11        Aug-11    M-t-M    Y-t-Y

  Alameda                         $   515,620   $   462,890   $   468,900     1.3%    -9.1%
  Contra Costa (Central County)   $   670,450   $   618,420   $   607,310    -1.8%    -9.4%
  Marin                           $   794,120   $   761,030   $   806,550     6.0%     1.6%
  Napa                            $   394,230   $   334,780   $   354,760     6.0%   -10.0%
  San Francisco                   $   675,780   $   648,330   $   632,270    -2.5%    -6.4%
  San Mateo                       $   780,000   $   729,900   $   742,000     1.7%    -4.9%
  Santa Clara                     $   625,000   $   607,000   $   595,000    -2.0%    -4.8%
  Solano                          $   207,090   $   190,560   $   197,880     3.8%    -4.4%
  Sonoma                          $   378,830   $   333,490   $   339,200     1.7%   -10.5%



SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Central Valley Region
            Home Sales in Central Valley Region
                                   Aug-10     Aug-11

1800
1600

1400

1200

1000

 800
 600

 400

 200
   0
                      )




                                                          y



                                                                       to
                              ty




                                                                                  to
                                        a



                                                 d
                    ld




                                                                                           re
       no




                                                         nt
                                      er



                                               ce
                            un




                                                                     en
                  ie




                                                                                ni




                                                                                         la
     es




                                                       ou
                                    ad




                                             er
                sf




                                                                                       Tu
                                                                              Be
                                                                   am
                          Co
   Fr




                                                      C
                                   M




                                            M
                er




                                                                              n
                                                                cr
              ak




                                                     er
                         gs




                                                                            Sa
                                                              Sa
                                                   ac
            (B




                       in




                                                 Pl
                      K
           n
        er




                                                     SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
       K
               Median Price of Existing Detached Homes
                                    Central Valley Regions

           County              Aug-10             Jul-11        Aug-11     M-t-M   Y-t-Y

 Fresno                         $149,880      $   139,470   $    145,730    4.5%    -2.8%
 Kern (Bakersfield)             $142,700      $   139,900   $    135,000   -3.5%    -5.4%
 Merced                         $121,870      $   113,080   $    126,670   12.0%     3.9%
 Sacramento                     $186,750      $   168,060   $    167,040   -0.6%   -10.6%




SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
                 Median Price of Existing Detached Homes
                                    Central Valley Regions

           County               Aug-10            Jul-11        Aug-11     M-t-M   Y-t-Y

 Fresno                     $    149,880      $   139,470   $    145,730    4.5%    -2.8%
 Kern (Bakersfield)         $    142,700      $   139,900   $    135,000   -3.5%    -5.4%
 Kings County               $    168,570      $   114,290   $    130,000   13.7%   -22.9%
 Madera                     $    142,500      $    92,500   $    128,750   39.2%    -9.6%
 Merced                     $    121,870      $   113,080   $    126,670   12.0%     3.9%
 Placer County              $    292,500      $   264,380   $    266,230    0.7%    -9.0%
 Sacramento                 $    186,750      $   168,060   $    167,040   -0.6%   -10.6%
 San Benito                 $    280,000      $   242,500   $    239,900   -1.1%   -14.3%
 Tulare                     $    138,420      $   114,230   $    124,680    9.1%    -9.9%




SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Central Coast
                             Sales of Existing Detached Homes and
                              Pacific West Consumer Confidence
              Central Coast, Aug. 2011 Sales: 2,296 Units, Up 2.1% YTD,
                                    Up 18.5% YTY
            UNITS                                              Sales      Consumer Confidence                                               INDEX

            1100                                                                                                                                    160
            1000
                                                                                                                                                    140
             900
             800                                                                                                                                    120

             700                                                                                                                                    100
             600
                                                                                                                                                    80
             500
             400                                                                                                                                    60

             300                                                                                                                                    40
             200
                                                                                                                                                    20
             100
               0                                                                                                                                    0
                              Jul-98


                                        Jul-99

                                                  Jul-00

                                                  Jul-01


                                                            Jul-02


                                                                      Jul-03


                                                                                Jul-04


                                                                                          Jul-05


                                                                                                    Jul-06

                                                                                                    Jul-07


                                                                                                              Jul-08


                                                                                                                        Jul-09


                                                                                                                                  Jul-10


                                                                                                                                           Jul-11
                    Jan-98


                             Jan-99


                                       Jan-00


                                                 Jan-01


                                                           Jan-02


                                                                     Jan-03

                                                                     Jan-04


                                                                               Jan-05


                                                                                         Jan-06


                                                                                                   Jan-07


                                                                                                             Jan-08


                                                                                                                       Jan-09


                                                                                                                                 Jan-10

                                                                                                                                 Jan-11
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®; The Conference Board
                Home Sales in Central Coast Region
                                          Aug-10   Aug-11

      300


      250


      200


      150


      100


       50


        0
            MontereyAtascadero    Paso     Pismo   San Luis   Lompoc     Santa    Santa
                                 Robles    Coast    Obispo     Valley   Barbara   Maria

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
                 Median Price of Existing Detached Homes
             Central Coast, August 2011: $335,710, Down 5.1% YTY
             $750,000
             $700,000
             $650,000
             $600,000
             $550,000
             $500,000
             $450,000
             $400,000
             $350,000
             $300,000
             $250,000
             $200,000
             $150,000
             $100,000
              $50,000
                   $0
                        Jun-00
                                 Dec-00
                                          Jun-01
                                                   Dec-01
                                                            Jun-02
                                                                     Dec-02
                                                                              Jun-03
                                                                                       Dec-03
                                                                                                Jun-04
                                                                                                         Dec-04
                                                                                                                  Jun-05
                                                                                                                           Dec-05
                                                                                                                                    Jun-06
                                                                                                                                             Dec-06
                                                                                                                                                      Jun-07
                                                                                                                                                               Dec-07
                                                                                                                                                                        Jun-08
                                                                                                                                                                                 Dec-08
                                                                                                                                                                                          Jun-09
                                                                                                                                                                                                   Dec-09
                                                                                                                                                                                                            Jun-10
                                                                                                                                                                                                                     Dec-10
                                                                                                                                                                                                                              Jun-11
SOURCE: California Association of REALTORS®
               Median Price of Existing Detached Homes
             Region                 Aug-10      Jul-11    Aug-11   M-t-M   Y-t-Y
                                           Monterey County
      Monterey                  $     257,760 $ 255,770 $ 263,160   2.9% 2.1%
                                       San Luis Obispo County
      Atascadero                $     268,750 $ 268,750 $ 309,091 15.0% 15.0%
      Paso Robles               $     295,832 $ 306,250 $ 277,083 -9.5% -6.3%
      Pismo Coast               $     407,692 $ 364,515 $ 419,444 15.1% 2.9%
      San Luis Obispo           $     378,124 $ 430,000 $371,428 -13.6% -1.8%
                                        Santa Barbara County
      Lompoc Valley             $     250,000 $ 225,000 $ 205,000 -8.9% -18.0%
      Santa Barbara             $     851,190 $ 833,330 $ 742,420 -10.9% -12.8%
      Santa Maria               $     250,000 $ 210,290 $ 223,530   6.3% -10.6%



SOURCE: California Association of REALTORS®
Southern California Region
                              Sales of Existing Detached Homes and
                               Pacific West Consumer Confidence
                     Southern California August 2011 Sales: 11,229 Units,
                               Down 4.0% YTD, Up 8.1% YTY
            UNITS                                                  Sales       Consumer Confidence                                                     INDEX

            18,000                                                                                                                                      160.0

            16,000                                                                                                                                      140.0
            14,000
                                                                                                                                                        120.0
            12,000
                                                                                                                                                        100.0
            10,000
                                                                                                                                                        80.0
             8,000
                                                                                                                                                        60.0
             6,000
                                                                                                                                                        40.0
             4,000

             2,000                                                                                                                                      20.0

                0                                                                                                                                       0.0
                     Jan-98

                               Jan-99

                                        Jan-00

                                                 Jan-01

                                                          Jan-02

                                                                      Jan-03

                                                                               Jan-04

                                                                                        Jan-05

                                                                                                 Jan-06

                                                                                                          Jan-07

                                                                                                                   Jan-08

                                                                                                                            Jan-09

                                                                                                                                     Jan-10

                                                                                                                                              Jan-11
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®; The Conference Board
                   Home Sales in Southern CA Regions
                                                  Aug-10   Aug-11

          3,500


          3,000


          2,500


          2,000


          1,500


          1,000


            500


              0
                     Los     Orange   Riverside      San     San Diego   Ventura    Santa    Ventura
                   Angeles                        Bernardino                       Barbara


SOURCE: California Association of REALTORS®
        Median Price of Existing Detached Homes
       Southern CA, August 2011: $294,140, Down 6.3% YTY
       $650,000
       $600,000
       $550,000
       $500,000
       $450,000
       $400,000
       $350,000
       $300,000
       $250,000
       $200,000
       $150,000
       $100,000
        $50,000
            $0
                  Jan-00
                           Jul-00
                                    Jan-01
                                             Jul-01
                                                      Jan-02
                                                               Jul-02
                                                                        Jan-03
                                                                                 Jul-03
                                                                                          Jan-04
                                                                                                   Jul-04
                                                                                                            Jan-05
                                                                                                                     Jul-05
                                                                                                                              Jan-06
                                                                                                                                       Jul-06
                                                                                                                                                Jan-07
                                                                                                                                                         Jul-07
                                                                                                                                                                  Jan-08
                                                                                                                                                                           Jul-08
                                                                                                                                                                                    Jan-09
                                                                                                                                                                                             Jul-09
                                                                                                                                                                                                      Jan-10
                                                                                                                                                                                                               Jul-10
                                                                                                                                                                                                                        Jan-11
                                                                                                                                                                                                                                 Jul-11
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
        Median Price of Existing Detached Homes
                            Southern California Region

         County             Aug-10            Jul-11     Aug-11      M-t-M    Y-t-Y

Los Angeles                   $336,420        $317,060    $312,900    -1.3%    -7.0%
Orange                        $561,900        $551,510    $508,910    -7.7%    -9.4%
Riverside                     $208,120        $200,910    $202,060     0.6%    -2.9%
San Bernardino                $144,210        $135,150    $135,030    -0.1%    -6.4%
San Diego                     $384,700        $375,330    $369,390    -1.6%    -4.0%
Ventura                       $434,480        $421,870    $424,400     0.6%    -2.3%
Santa Barbara                 $536,290        $418,750    $421,430     0.6%   -21.4%




SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
2011 Annual Housing
   Market Survey
                             2 in 5 Homes Sold Were
                              Distressed Properties

                               2008           2009          2010          2011
                                                                                            59%
    60%



    40%


                                    20%                             20%
    20%



      0%
                         REOs                         Short Sales                Equity Sales
Q. Was the property purchased/sold as a
foreclosure, REO, short sale, or none of the above?
     Equity vs. REO vs. Short Sales
                                  Equity Sales   REO Sales   Short Sales
Share of Total Sales                58.7%         19.7%        20.2%
Median Home Price                  $431,000      $240,000    $287,000
Square Footage                       1,783        1,500        1,600
Price / SF                           $250          $112         $175
Sales‐to‐List Price Ratio           95.9%         98.0%        95.9%
% of Sales With Multiple Offers     35.2%         58.3%        57.5%
Avg. Number of Offers                 3.0           3.0         3.6
% of All Cash Sales                 25.5%         34.0%        23.3%
Days on MLS                           67            50          141
Days in Escrow                        35            35           45
                        1 in 3 Sellers Sold Because They
                                 Were in Distress

          35%                      Sold due to foreclosure/Short sale/Default   30%
          30%

          25%

          20%

          15%

          10%

           5%

           0%
                   2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Q. What was the single most important reason for
selling/buying the property?
                           Sellers with a Net Cash Loss

      35%
      30%
      25%
                                                                                                       21.8%
      20%
                          Long Run Average = 11.2%
      15%
      10%
        5%
        0%
                  2000

                         2001

                                 2002

                                        2003

                                               2004

                                                      2005

                                                             2006

                                                                    2007

                                                                           2008

                                                                                  2009

                                                                                         2010

                                                                                                2011
Q. What was the net cash gain or net loss to
the seller as a result of this sale?
                                              Net Cash to Sellers

                                                              Median

        $250,000

        $200,000

        $150,000

        $100,000                                                                    $75,000

          $50,000

                  $0
                         2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Q. What was the net cash gain or net loss to the seller as a result of this sale?
                                Median Price Discount &
                                   Weeks On Market
                                                                                        3.9%, 10.5 weeks
           8%                                                                                                16
                              Med. Price Discount
           7%                 Med. Weeks on MLS                                                              14

           6%                                                                                                12

           5%                                                                                                10

           4%                                                                                                8

           3%                                                                                                6

           2%                                                                                                4

           1%                                                                                                2

           0%                                                                                                0
                  2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Q. What was the original list sales price of the property? What was the final sales price of the property?
How many weeks did the property remain on the MLS?
                    Multiple Offers
             %with M ultiple Offers   # of M ultiple offers (Average)

60%                                                                            6

50%                                                                            5

40%                                                                            4

30%                                                                            3

20%                                                                            2

10%                                                                            1

0%                                                                             0
      2000     2002           2004     2006            2008             2010
                  Proportion of Sellers Planning to
                            Repurchase
      80%
      70%
      60%
      50%
      40%
      30%
      20%
      10%
       0%
               2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Q. Is the seller planning on purchasing another home?
     Reasons Sellers Not Planning to
          Buy Another Home
                           Seller is a lender/bank                      19.8%

   Seller prefers to have less financial obligation             11.4%

                         Poor credit background                 10.9%

                 Lack of cash for down payment           5.7%

                      Out of work/unemployment          4.9%

                Decide to live with family/friends      4.7%

                     Waiting for market to bottom      2.7%

                                             Other                                          40.0%

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




Q. Why is the seller not planning to purchase
another home?
                                        Reasons For Selling
                                           All Home Sellers
              Foreclosure/Short
                 Sale/Default

         Change in Family Status

           Retirement/Move to
          Retirement Community
                Investment/ Tax
                 Consderations

         Desired Better Location


           Desired Smaller Home


                  Changed Jobs


           Desired Larger Home


                          Other

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

Q. What was the single most important reason for selling/buying the property?
            Cash Sales on the Rise

                          % of All Sales
30%
25%
20%
15%
10%
 5%
 0%
      2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
                           Buyers Who Bought for
                       Investment/Tax Considerations
                              Dipped Slightly
        20%       Long Run Average = 12.1%
                                                                                17%
        18%
        16%
        14%
        12%
        10%
          8%
          6%
          4%
          2%
          0%
                2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Q. What was the single most important reason for selling/buying the property?
           Investments & Second/
              Vacation Homes
      Investment/Rental Property   Vacation/Second Home

25%

20%                                                       7%

15%

10%
                                                          17%
5%

0%
                                    Foreign Buyers
      10%
                                      % of Foreign Buyers
                       8%
        8%

                                      6%                    6%
        6%                                           5%


        4%


        2%


        0%
                      2008           2009           2010    2011
Q. Was the buyer a foreign buyer?
      Years Owned Home Before Selling
(All Sellers and Second Home/Investment Home Sellers
           All Sellers   Second Home and Investment Home Sellers

      14
      12
      10
       8
                                                                   7.0
       6                                                           6.0
       4
       2
       0
California Housing
 Market Forecast
                      Forecast Progress Report
                                   2010                      2011 
                                 Projected                  Forecast      2011 
                                              2010 Actual
                                  October                   October     Projected
                                   2010                      2010
   SFH Resales 
                                   492.0        491.5        502.0       491.1
   (000s)
   % Change                       ‐10.0%        ‐10.1%       2.0%        ‐0.1%
   Median Price 
                                  $306.5        $303.1      $312.5       $291.0
   ($000s)
   % Change                        11.5%        10.2%        2.0%        ‐4.0%

    Forecast Date: September 2011 vs October 2010

Source: CALIFORNIA ASSOCIATION OF REALTORS®
               California Housing Market Outlook
                  2005      2006      2007    2008    2009    2010    2011f   2012f

  SFH Resales
                   625.0     477.5    346.9   441.8   546.9   491.5   491.1   496.2
  (000s)

  % Change        0.03% -23.6% -27.3% 27.3%           23.8% -10.1% -0.1%      1.0%
  Median
  Price          $522.7 $556.4 $560.3 $348.5 $275.0 $303.1 $291.0 $296.0
  ($000s)
  % Change        16.0%     6.5%      0.7%    -37.8% -21.1% 10.2% -4.0%       1.7%
  30-Yr FRM       5.9%      6.4%      6.3%    6.0%    5.1%    4.7%    4.5%    4.7%
  1-Yr ARM        4.5%      5.5%      5.6%    5.2%    4.7%    3.5%    3.0%    3.1%



 Forecast Date: September 2011

Source: CALIFORNIA ASSOCIATION OF REALTORS®
Closing Thoughts
                          Direction of Home Prices: Sellers
                              Skeptical; Buyers Hopeful
                                              Down          Flat       Unsure         Up




          100%

            80%

            60%

            40%

            20%

              0%
                                      Sellers                                  Buyers
Q: Do you think home prices in your neighborhood will go up, down or stay flat in one year, five years and 10 years?
          Real Estate: It’s Time To Buy Again


              “Forget stocks. Don't bet on gold.
              After four years of plunging home
              prices, the most attractive asset
              class in America is housing.”




SOURCE: “Real estate: It’s time to buy again” Fortune Magazine’s 3/28/11 article written by Shawn Tully
             8 in 10 Americans Agree Buying a Home is
                 the Best Investment One Can Make




SOURCE: Pew Research Center’s “Home Sweet Home. Still. Five Years After the Bubble Burst”
                8 in 10 Renters Would Like to
                       Buy in the Future

     “…renters are hardly
     immune to the allure of
     homeownership, even in
     the face of the five-year
     decline in prices. Asked if
     they rent out of choice or
     because they cannot
     afford to buy a home, just
     24% say they
     rent out of
     choice.”

SOURCE: Pew Research Center’s “Home Sweet Home. Still. Five Years After the Bubble Burst”
      Thank You

www.car.org.marketdata

   lesliea@car.org

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:111
posted:11/8/2011
language:English
pages:125