FORECASTApril 06 2016San Francisco Association of REALTORSreg
Oscar Wei Senior Economist of CAR
OVERVIEW
bull Economic Outlook
bull California Housing Market Outlook
bull Regional Housing Market Outlook
bull 2016 Forecast
ECONOMIC OUTLOOK
MACRO ECONOMY SUMMARY
14
GDP 2015-Q4
19
Job Growth2016-02
50
Unemployment2016-03
22
Consumption2015-Q4
-4
-3
-2
-1
0
1
2
3
4
5
US GDP AT RISK FROM WEAK GLOBAL GROWTH
2015 24 2015 Q4 14 2016 (F) 27
ANNUAL PERCENT CHANGE CHAIN-TYPE (2005) $
ANNUALLY QUARTERLY
2009 Largest Annual Drop since 1938 (-34)
SERIES GDPSOURCE US Dept of Commerce Bureau of Economic Analysis
PROGRESS CONTINUES UNIMPRESSIVELY
10000
11000
12000
13000
14000
15000
16000
17000
18000
19000Q
1-00
Q4-
00Q
3-01
Q2-
02Q
1-03
Q4-
03Q
3-04
Q2-
05Q
1-06
Q4-
06Q
3-07
Q2-
08Q
1-09
Q4-
09Q
3-10
Q2-
11Q
1-12
Q4-
12Q
3-13
Q2-
14Q
1-15
Q4-
15
$ Bi
llion
s
Actual Trend
SERIES US Real Gross Domestic Product (GDP)SOURCE US Bureau of Economic Analysis
24 Consecutive quarters of yty growth but still below long-run trend
UNEMPLOYMENT RATES AT 8-YEAR LOWS
US 50 (Mar 2016) CA 55 (Feb 2016)
0
2
4
6
8
10
12
14
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3
Jan-
14
Jul-1
4
Jan-
15
Jul-1
5
Jan-
16
CA US
SERIES Unemployment Rate The U-6 rate covers the unemployed underemployed and those who are not looking but who want a jobSOURCE US Bureau of Labor Statistics CA Employment Development Division
EMPLOYMENT GROWTH CALIFORNIA VS US
28
19
-8
-6
-4
-2
0
2
4
6 California USANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNEMPLOYMENT RATE BY CALIFORNIA METRO AREA
109105
9488
5855
5451
474343
4039
32
00 20 40 60 80 100 120
BakersfieldFresno MSA
ModestoStockton MSAInland Empire
Los AngelesSacramento
VenturaSan Diego
OaklandSan Luis ObispoOrange County
San Jose Santa ClaraSan FranciscoSan Mateo
SERIES Unemployment RateSOURCE CA Employment Development Division San Francisco and San Mateo unemployment rate is not seasonally adjusted
ANNUAL PERCENT CHANGE
February 2016 California 55
OILrsquoS DRAG COMING TO CLOSE MAYBEhellip
Dollars per Barrel
$0
$20
$40
$60
$80
$100
$120
$140
$160
SERIES Crude Oil Prices West Texas IntermediateSOURCE US Energy Information Administration
3rd Week of March $3832 5th consecutive week of growth
74 Drop
CONSUMER CONFIDENCE INDEX
March 2016 962
0
20
40
60
80
100
120
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3
Jan-
14
Jul-1
4
Jan-
15
Jul-1
5
Jan-
16
INDEX 100=1985
SERIES Consumer ConfidenceSOURCE The Conference Board
MORTGAGE RATES LOWER NOW THAN 2015
January 2009 ndash March 2016
0
1
2
3
4
5
6
FRMARM
MONTHLY WEEKLY
SERIES 30Yr FRM 5Yr ARMSOURCE Freddie Mac
WHERE ARE WE HEADED
- Fed takes a more dovish tone leave interest rates unchanged will gradually increase rates in 2016 and 2017 Action will be ldquodata determinedrdquo
- Risk of rates increasing too fast bringing economic growth to a halt
- Risk of rates increasing too slow zero leverage when next downturn hits
SERIES Median Price of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb-16 $446460Feb-15
$429930
INVENTORY DIPPED SLIGHTLY FROM LAST YEAR
Feb 2015 49 Months Feb 2016 46 Months
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
00
20
40
60
80
100
120
140
160
180
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 AND REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
DEMAND DECREASED IN THE BAY AREAAS SUPPLY CONTINUED TO DECLINE
-5
1
7
-3-4
-9-10
0
10
San Francisco Bay Area Southern California Central Valley
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
WHERE IS THE INVENTORY
ndash Affordability challenge for repeat buyersbull Low rate on current mortgage bull Low property taxesbull Concerned with capital gainsbull Why list when there is nowhere to go I can
affordbull Could not qualify for a mortgage today
ndash New construction recovering but LOWndash Demographics Trade-up buyer pool is smallerndash Measurement error Off- MLS (aka ldquopocketrsquo)
listings not being counted in listing stats
FEWER MIDDLE-AGE ADULTS IN RECENT YEARS
Source Harvard Joint Center of Housing Studies Census Bureau
DROP IN HOMEOWNERSHIP
Source Harvard Joint Center of Housing Studies Census Bureau
DECLINE IN OF TRADE UP BUYERS DUE TO POPULATION LOSS amp DROP IN HOMEOWNERSHIP RATE
Source Harvard Joint Center of Housing Studies Census Bureau
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
2008
2009
2010
2011
2012
2013
2014
2015
2016f
Nonfarm Job Growth
-13
-60
-11
11
24
32
31
30
23
Unemployment Rate
72
113
123
118
104
89
75
62
55
Population Growth
08
06
07
07
07
09
09
09
09
Real Disposable Income Change
15
-13
09
34
47
02
30
43
45
2008
2009
2010
2011
2012
2013
2014
2015
2016f
US GDP
-03
-34
24
18
23
22
24
24
27
Nonfarm Job Growth
-06
-44
-07
12
17
17
19
21
18
Unemployment
58
93
96
89
81
74
62
53
50
CPI
38
-04
16
31
21
15
16
01
21
Real Disposable Income Change
05
-04
10
25
31
-14
27
35
27
30-Yr FRM
60
50
47
45
37
40
42
39
45
OVERVIEW
bull Economic Outlook
bull California Housing Market Outlook
bull Regional Housing Market Outlook
bull 2016 Forecast
ECONOMIC OUTLOOK
MACRO ECONOMY SUMMARY
14
GDP 2015-Q4
19
Job Growth2016-02
50
Unemployment2016-03
22
Consumption2015-Q4
-4
-3
-2
-1
0
1
2
3
4
5
US GDP AT RISK FROM WEAK GLOBAL GROWTH
2015 24 2015 Q4 14 2016 (F) 27
ANNUAL PERCENT CHANGE CHAIN-TYPE (2005) $
ANNUALLY QUARTERLY
2009 Largest Annual Drop since 1938 (-34)
SERIES GDPSOURCE US Dept of Commerce Bureau of Economic Analysis
PROGRESS CONTINUES UNIMPRESSIVELY
10000
11000
12000
13000
14000
15000
16000
17000
18000
19000Q
1-00
Q4-
00Q
3-01
Q2-
02Q
1-03
Q4-
03Q
3-04
Q2-
05Q
1-06
Q4-
06Q
3-07
Q2-
08Q
1-09
Q4-
09Q
3-10
Q2-
11Q
1-12
Q4-
12Q
3-13
Q2-
14Q
1-15
Q4-
15
$ Bi
llion
s
Actual Trend
SERIES US Real Gross Domestic Product (GDP)SOURCE US Bureau of Economic Analysis
24 Consecutive quarters of yty growth but still below long-run trend
UNEMPLOYMENT RATES AT 8-YEAR LOWS
US 50 (Mar 2016) CA 55 (Feb 2016)
0
2
4
6
8
10
12
14
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3
Jan-
14
Jul-1
4
Jan-
15
Jul-1
5
Jan-
16
CA US
SERIES Unemployment Rate The U-6 rate covers the unemployed underemployed and those who are not looking but who want a jobSOURCE US Bureau of Labor Statistics CA Employment Development Division
EMPLOYMENT GROWTH CALIFORNIA VS US
28
19
-8
-6
-4
-2
0
2
4
6 California USANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNEMPLOYMENT RATE BY CALIFORNIA METRO AREA
109105
9488
5855
5451
474343
4039
32
00 20 40 60 80 100 120
BakersfieldFresno MSA
ModestoStockton MSAInland Empire
Los AngelesSacramento
VenturaSan Diego
OaklandSan Luis ObispoOrange County
San Jose Santa ClaraSan FranciscoSan Mateo
SERIES Unemployment RateSOURCE CA Employment Development Division San Francisco and San Mateo unemployment rate is not seasonally adjusted
ANNUAL PERCENT CHANGE
February 2016 California 55
OILrsquoS DRAG COMING TO CLOSE MAYBEhellip
Dollars per Barrel
$0
$20
$40
$60
$80
$100
$120
$140
$160
SERIES Crude Oil Prices West Texas IntermediateSOURCE US Energy Information Administration
3rd Week of March $3832 5th consecutive week of growth
74 Drop
CONSUMER CONFIDENCE INDEX
March 2016 962
0
20
40
60
80
100
120
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3
Jan-
14
Jul-1
4
Jan-
15
Jul-1
5
Jan-
16
INDEX 100=1985
SERIES Consumer ConfidenceSOURCE The Conference Board
MORTGAGE RATES LOWER NOW THAN 2015
January 2009 ndash March 2016
0
1
2
3
4
5
6
FRMARM
MONTHLY WEEKLY
SERIES 30Yr FRM 5Yr ARMSOURCE Freddie Mac
WHERE ARE WE HEADED
- Fed takes a more dovish tone leave interest rates unchanged will gradually increase rates in 2016 and 2017 Action will be ldquodata determinedrdquo
- Risk of rates increasing too fast bringing economic growth to a halt
- Risk of rates increasing too slow zero leverage when next downturn hits
SERIES Median Price of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb-16 $446460Feb-15
$429930
INVENTORY DIPPED SLIGHTLY FROM LAST YEAR
Feb 2015 49 Months Feb 2016 46 Months
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
00
20
40
60
80
100
120
140
160
180
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 AND REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
DEMAND DECREASED IN THE BAY AREAAS SUPPLY CONTINUED TO DECLINE
-5
1
7
-3-4
-9-10
0
10
San Francisco Bay Area Southern California Central Valley
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
WHERE IS THE INVENTORY
ndash Affordability challenge for repeat buyersbull Low rate on current mortgage bull Low property taxesbull Concerned with capital gainsbull Why list when there is nowhere to go I can
affordbull Could not qualify for a mortgage today
ndash New construction recovering but LOWndash Demographics Trade-up buyer pool is smallerndash Measurement error Off- MLS (aka ldquopocketrsquo)
listings not being counted in listing stats
FEWER MIDDLE-AGE ADULTS IN RECENT YEARS
Source Harvard Joint Center of Housing Studies Census Bureau
DROP IN HOMEOWNERSHIP
Source Harvard Joint Center of Housing Studies Census Bureau
DECLINE IN OF TRADE UP BUYERS DUE TO POPULATION LOSS amp DROP IN HOMEOWNERSHIP RATE
Source Harvard Joint Center of Housing Studies Census Bureau
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
2008
2009
2010
2011
2012
2013
2014
2015
2016f
Nonfarm Job Growth
-13
-60
-11
11
24
32
31
30
23
Unemployment Rate
72
113
123
118
104
89
75
62
55
Population Growth
08
06
07
07
07
09
09
09
09
Real Disposable Income Change
15
-13
09
34
47
02
30
43
45
2008
2009
2010
2011
2012
2013
2014
2015
2016f
US GDP
-03
-34
24
18
23
22
24
24
27
Nonfarm Job Growth
-06
-44
-07
12
17
17
19
21
18
Unemployment
58
93
96
89
81
74
62
53
50
CPI
38
-04
16
31
21
15
16
01
21
Real Disposable Income Change
05
-04
10
25
31
-14
27
35
27
30-Yr FRM
60
50
47
45
37
40
42
39
45
ECONOMIC OUTLOOK
MACRO ECONOMY SUMMARY
14
GDP 2015-Q4
19
Job Growth2016-02
50
Unemployment2016-03
22
Consumption2015-Q4
-4
-3
-2
-1
0
1
2
3
4
5
US GDP AT RISK FROM WEAK GLOBAL GROWTH
2015 24 2015 Q4 14 2016 (F) 27
ANNUAL PERCENT CHANGE CHAIN-TYPE (2005) $
ANNUALLY QUARTERLY
2009 Largest Annual Drop since 1938 (-34)
SERIES GDPSOURCE US Dept of Commerce Bureau of Economic Analysis
PROGRESS CONTINUES UNIMPRESSIVELY
10000
11000
12000
13000
14000
15000
16000
17000
18000
19000Q
1-00
Q4-
00Q
3-01
Q2-
02Q
1-03
Q4-
03Q
3-04
Q2-
05Q
1-06
Q4-
06Q
3-07
Q2-
08Q
1-09
Q4-
09Q
3-10
Q2-
11Q
1-12
Q4-
12Q
3-13
Q2-
14Q
1-15
Q4-
15
$ Bi
llion
s
Actual Trend
SERIES US Real Gross Domestic Product (GDP)SOURCE US Bureau of Economic Analysis
24 Consecutive quarters of yty growth but still below long-run trend
UNEMPLOYMENT RATES AT 8-YEAR LOWS
US 50 (Mar 2016) CA 55 (Feb 2016)
0
2
4
6
8
10
12
14
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3
Jan-
14
Jul-1
4
Jan-
15
Jul-1
5
Jan-
16
CA US
SERIES Unemployment Rate The U-6 rate covers the unemployed underemployed and those who are not looking but who want a jobSOURCE US Bureau of Labor Statistics CA Employment Development Division
EMPLOYMENT GROWTH CALIFORNIA VS US
28
19
-8
-6
-4
-2
0
2
4
6 California USANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNEMPLOYMENT RATE BY CALIFORNIA METRO AREA
109105
9488
5855
5451
474343
4039
32
00 20 40 60 80 100 120
BakersfieldFresno MSA
ModestoStockton MSAInland Empire
Los AngelesSacramento
VenturaSan Diego
OaklandSan Luis ObispoOrange County
San Jose Santa ClaraSan FranciscoSan Mateo
SERIES Unemployment RateSOURCE CA Employment Development Division San Francisco and San Mateo unemployment rate is not seasonally adjusted
ANNUAL PERCENT CHANGE
February 2016 California 55
OILrsquoS DRAG COMING TO CLOSE MAYBEhellip
Dollars per Barrel
$0
$20
$40
$60
$80
$100
$120
$140
$160
SERIES Crude Oil Prices West Texas IntermediateSOURCE US Energy Information Administration
3rd Week of March $3832 5th consecutive week of growth
74 Drop
CONSUMER CONFIDENCE INDEX
March 2016 962
0
20
40
60
80
100
120
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3
Jan-
14
Jul-1
4
Jan-
15
Jul-1
5
Jan-
16
INDEX 100=1985
SERIES Consumer ConfidenceSOURCE The Conference Board
MORTGAGE RATES LOWER NOW THAN 2015
January 2009 ndash March 2016
0
1
2
3
4
5
6
FRMARM
MONTHLY WEEKLY
SERIES 30Yr FRM 5Yr ARMSOURCE Freddie Mac
WHERE ARE WE HEADED
- Fed takes a more dovish tone leave interest rates unchanged will gradually increase rates in 2016 and 2017 Action will be ldquodata determinedrdquo
- Risk of rates increasing too fast bringing economic growth to a halt
- Risk of rates increasing too slow zero leverage when next downturn hits
SERIES Median Price of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb-16 $446460Feb-15
$429930
INVENTORY DIPPED SLIGHTLY FROM LAST YEAR
Feb 2015 49 Months Feb 2016 46 Months
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
00
20
40
60
80
100
120
140
160
180
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 AND REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
DEMAND DECREASED IN THE BAY AREAAS SUPPLY CONTINUED TO DECLINE
-5
1
7
-3-4
-9-10
0
10
San Francisco Bay Area Southern California Central Valley
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
WHERE IS THE INVENTORY
ndash Affordability challenge for repeat buyersbull Low rate on current mortgage bull Low property taxesbull Concerned with capital gainsbull Why list when there is nowhere to go I can
affordbull Could not qualify for a mortgage today
ndash New construction recovering but LOWndash Demographics Trade-up buyer pool is smallerndash Measurement error Off- MLS (aka ldquopocketrsquo)
listings not being counted in listing stats
FEWER MIDDLE-AGE ADULTS IN RECENT YEARS
Source Harvard Joint Center of Housing Studies Census Bureau
DROP IN HOMEOWNERSHIP
Source Harvard Joint Center of Housing Studies Census Bureau
DECLINE IN OF TRADE UP BUYERS DUE TO POPULATION LOSS amp DROP IN HOMEOWNERSHIP RATE
Source Harvard Joint Center of Housing Studies Census Bureau
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
2008
2009
2010
2011
2012
2013
2014
2015
2016f
Nonfarm Job Growth
-13
-60
-11
11
24
32
31
30
23
Unemployment Rate
72
113
123
118
104
89
75
62
55
Population Growth
08
06
07
07
07
09
09
09
09
Real Disposable Income Change
15
-13
09
34
47
02
30
43
45
2008
2009
2010
2011
2012
2013
2014
2015
2016f
US GDP
-03
-34
24
18
23
22
24
24
27
Nonfarm Job Growth
-06
-44
-07
12
17
17
19
21
18
Unemployment
58
93
96
89
81
74
62
53
50
CPI
38
-04
16
31
21
15
16
01
21
Real Disposable Income Change
05
-04
10
25
31
-14
27
35
27
30-Yr FRM
60
50
47
45
37
40
42
39
45
MACRO ECONOMY SUMMARY
14
GDP 2015-Q4
19
Job Growth2016-02
50
Unemployment2016-03
22
Consumption2015-Q4
-4
-3
-2
-1
0
1
2
3
4
5
US GDP AT RISK FROM WEAK GLOBAL GROWTH
2015 24 2015 Q4 14 2016 (F) 27
ANNUAL PERCENT CHANGE CHAIN-TYPE (2005) $
ANNUALLY QUARTERLY
2009 Largest Annual Drop since 1938 (-34)
SERIES GDPSOURCE US Dept of Commerce Bureau of Economic Analysis
PROGRESS CONTINUES UNIMPRESSIVELY
10000
11000
12000
13000
14000
15000
16000
17000
18000
19000Q
1-00
Q4-
00Q
3-01
Q2-
02Q
1-03
Q4-
03Q
3-04
Q2-
05Q
1-06
Q4-
06Q
3-07
Q2-
08Q
1-09
Q4-
09Q
3-10
Q2-
11Q
1-12
Q4-
12Q
3-13
Q2-
14Q
1-15
Q4-
15
$ Bi
llion
s
Actual Trend
SERIES US Real Gross Domestic Product (GDP)SOURCE US Bureau of Economic Analysis
24 Consecutive quarters of yty growth but still below long-run trend
UNEMPLOYMENT RATES AT 8-YEAR LOWS
US 50 (Mar 2016) CA 55 (Feb 2016)
0
2
4
6
8
10
12
14
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3
Jan-
14
Jul-1
4
Jan-
15
Jul-1
5
Jan-
16
CA US
SERIES Unemployment Rate The U-6 rate covers the unemployed underemployed and those who are not looking but who want a jobSOURCE US Bureau of Labor Statistics CA Employment Development Division
EMPLOYMENT GROWTH CALIFORNIA VS US
28
19
-8
-6
-4
-2
0
2
4
6 California USANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNEMPLOYMENT RATE BY CALIFORNIA METRO AREA
109105
9488
5855
5451
474343
4039
32
00 20 40 60 80 100 120
BakersfieldFresno MSA
ModestoStockton MSAInland Empire
Los AngelesSacramento
VenturaSan Diego
OaklandSan Luis ObispoOrange County
San Jose Santa ClaraSan FranciscoSan Mateo
SERIES Unemployment RateSOURCE CA Employment Development Division San Francisco and San Mateo unemployment rate is not seasonally adjusted
ANNUAL PERCENT CHANGE
February 2016 California 55
OILrsquoS DRAG COMING TO CLOSE MAYBEhellip
Dollars per Barrel
$0
$20
$40
$60
$80
$100
$120
$140
$160
SERIES Crude Oil Prices West Texas IntermediateSOURCE US Energy Information Administration
3rd Week of March $3832 5th consecutive week of growth
74 Drop
CONSUMER CONFIDENCE INDEX
March 2016 962
0
20
40
60
80
100
120
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3
Jan-
14
Jul-1
4
Jan-
15
Jul-1
5
Jan-
16
INDEX 100=1985
SERIES Consumer ConfidenceSOURCE The Conference Board
MORTGAGE RATES LOWER NOW THAN 2015
January 2009 ndash March 2016
0
1
2
3
4
5
6
FRMARM
MONTHLY WEEKLY
SERIES 30Yr FRM 5Yr ARMSOURCE Freddie Mac
WHERE ARE WE HEADED
- Fed takes a more dovish tone leave interest rates unchanged will gradually increase rates in 2016 and 2017 Action will be ldquodata determinedrdquo
- Risk of rates increasing too fast bringing economic growth to a halt
- Risk of rates increasing too slow zero leverage when next downturn hits
SERIES Median Price of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb-16 $446460Feb-15
$429930
INVENTORY DIPPED SLIGHTLY FROM LAST YEAR
Feb 2015 49 Months Feb 2016 46 Months
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
00
20
40
60
80
100
120
140
160
180
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 AND REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
DEMAND DECREASED IN THE BAY AREAAS SUPPLY CONTINUED TO DECLINE
-5
1
7
-3-4
-9-10
0
10
San Francisco Bay Area Southern California Central Valley
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
WHERE IS THE INVENTORY
ndash Affordability challenge for repeat buyersbull Low rate on current mortgage bull Low property taxesbull Concerned with capital gainsbull Why list when there is nowhere to go I can
affordbull Could not qualify for a mortgage today
ndash New construction recovering but LOWndash Demographics Trade-up buyer pool is smallerndash Measurement error Off- MLS (aka ldquopocketrsquo)
listings not being counted in listing stats
FEWER MIDDLE-AGE ADULTS IN RECENT YEARS
Source Harvard Joint Center of Housing Studies Census Bureau
DROP IN HOMEOWNERSHIP
Source Harvard Joint Center of Housing Studies Census Bureau
DECLINE IN OF TRADE UP BUYERS DUE TO POPULATION LOSS amp DROP IN HOMEOWNERSHIP RATE
Source Harvard Joint Center of Housing Studies Census Bureau
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
2008
2009
2010
2011
2012
2013
2014
2015
2016f
Nonfarm Job Growth
-13
-60
-11
11
24
32
31
30
23
Unemployment Rate
72
113
123
118
104
89
75
62
55
Population Growth
08
06
07
07
07
09
09
09
09
Real Disposable Income Change
15
-13
09
34
47
02
30
43
45
2008
2009
2010
2011
2012
2013
2014
2015
2016f
US GDP
-03
-34
24
18
23
22
24
24
27
Nonfarm Job Growth
-06
-44
-07
12
17
17
19
21
18
Unemployment
58
93
96
89
81
74
62
53
50
CPI
38
-04
16
31
21
15
16
01
21
Real Disposable Income Change
05
-04
10
25
31
-14
27
35
27
30-Yr FRM
60
50
47
45
37
40
42
39
45
-4
-3
-2
-1
0
1
2
3
4
5
US GDP AT RISK FROM WEAK GLOBAL GROWTH
2015 24 2015 Q4 14 2016 (F) 27
ANNUAL PERCENT CHANGE CHAIN-TYPE (2005) $
ANNUALLY QUARTERLY
2009 Largest Annual Drop since 1938 (-34)
SERIES GDPSOURCE US Dept of Commerce Bureau of Economic Analysis
PROGRESS CONTINUES UNIMPRESSIVELY
10000
11000
12000
13000
14000
15000
16000
17000
18000
19000Q
1-00
Q4-
00Q
3-01
Q2-
02Q
1-03
Q4-
03Q
3-04
Q2-
05Q
1-06
Q4-
06Q
3-07
Q2-
08Q
1-09
Q4-
09Q
3-10
Q2-
11Q
1-12
Q4-
12Q
3-13
Q2-
14Q
1-15
Q4-
15
$ Bi
llion
s
Actual Trend
SERIES US Real Gross Domestic Product (GDP)SOURCE US Bureau of Economic Analysis
24 Consecutive quarters of yty growth but still below long-run trend
UNEMPLOYMENT RATES AT 8-YEAR LOWS
US 50 (Mar 2016) CA 55 (Feb 2016)
0
2
4
6
8
10
12
14
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3
Jan-
14
Jul-1
4
Jan-
15
Jul-1
5
Jan-
16
CA US
SERIES Unemployment Rate The U-6 rate covers the unemployed underemployed and those who are not looking but who want a jobSOURCE US Bureau of Labor Statistics CA Employment Development Division
EMPLOYMENT GROWTH CALIFORNIA VS US
28
19
-8
-6
-4
-2
0
2
4
6 California USANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNEMPLOYMENT RATE BY CALIFORNIA METRO AREA
109105
9488
5855
5451
474343
4039
32
00 20 40 60 80 100 120
BakersfieldFresno MSA
ModestoStockton MSAInland Empire
Los AngelesSacramento
VenturaSan Diego
OaklandSan Luis ObispoOrange County
San Jose Santa ClaraSan FranciscoSan Mateo
SERIES Unemployment RateSOURCE CA Employment Development Division San Francisco and San Mateo unemployment rate is not seasonally adjusted
ANNUAL PERCENT CHANGE
February 2016 California 55
OILrsquoS DRAG COMING TO CLOSE MAYBEhellip
Dollars per Barrel
$0
$20
$40
$60
$80
$100
$120
$140
$160
SERIES Crude Oil Prices West Texas IntermediateSOURCE US Energy Information Administration
3rd Week of March $3832 5th consecutive week of growth
74 Drop
CONSUMER CONFIDENCE INDEX
March 2016 962
0
20
40
60
80
100
120
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3
Jan-
14
Jul-1
4
Jan-
15
Jul-1
5
Jan-
16
INDEX 100=1985
SERIES Consumer ConfidenceSOURCE The Conference Board
MORTGAGE RATES LOWER NOW THAN 2015
January 2009 ndash March 2016
0
1
2
3
4
5
6
FRMARM
MONTHLY WEEKLY
SERIES 30Yr FRM 5Yr ARMSOURCE Freddie Mac
WHERE ARE WE HEADED
- Fed takes a more dovish tone leave interest rates unchanged will gradually increase rates in 2016 and 2017 Action will be ldquodata determinedrdquo
- Risk of rates increasing too fast bringing economic growth to a halt
- Risk of rates increasing too slow zero leverage when next downturn hits
SERIES Median Price of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb-16 $446460Feb-15
$429930
INVENTORY DIPPED SLIGHTLY FROM LAST YEAR
Feb 2015 49 Months Feb 2016 46 Months
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
00
20
40
60
80
100
120
140
160
180
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 AND REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
DEMAND DECREASED IN THE BAY AREAAS SUPPLY CONTINUED TO DECLINE
-5
1
7
-3-4
-9-10
0
10
San Francisco Bay Area Southern California Central Valley
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
WHERE IS THE INVENTORY
ndash Affordability challenge for repeat buyersbull Low rate on current mortgage bull Low property taxesbull Concerned with capital gainsbull Why list when there is nowhere to go I can
affordbull Could not qualify for a mortgage today
ndash New construction recovering but LOWndash Demographics Trade-up buyer pool is smallerndash Measurement error Off- MLS (aka ldquopocketrsquo)
listings not being counted in listing stats
FEWER MIDDLE-AGE ADULTS IN RECENT YEARS
Source Harvard Joint Center of Housing Studies Census Bureau
DROP IN HOMEOWNERSHIP
Source Harvard Joint Center of Housing Studies Census Bureau
DECLINE IN OF TRADE UP BUYERS DUE TO POPULATION LOSS amp DROP IN HOMEOWNERSHIP RATE
Source Harvard Joint Center of Housing Studies Census Bureau
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
2008
2009
2010
2011
2012
2013
2014
2015
2016f
Nonfarm Job Growth
-13
-60
-11
11
24
32
31
30
23
Unemployment Rate
72
113
123
118
104
89
75
62
55
Population Growth
08
06
07
07
07
09
09
09
09
Real Disposable Income Change
15
-13
09
34
47
02
30
43
45
2008
2009
2010
2011
2012
2013
2014
2015
2016f
US GDP
-03
-34
24
18
23
22
24
24
27
Nonfarm Job Growth
-06
-44
-07
12
17
17
19
21
18
Unemployment
58
93
96
89
81
74
62
53
50
CPI
38
-04
16
31
21
15
16
01
21
Real Disposable Income Change
05
-04
10
25
31
-14
27
35
27
30-Yr FRM
60
50
47
45
37
40
42
39
45
PROGRESS CONTINUES UNIMPRESSIVELY
10000
11000
12000
13000
14000
15000
16000
17000
18000
19000Q
1-00
Q4-
00Q
3-01
Q2-
02Q
1-03
Q4-
03Q
3-04
Q2-
05Q
1-06
Q4-
06Q
3-07
Q2-
08Q
1-09
Q4-
09Q
3-10
Q2-
11Q
1-12
Q4-
12Q
3-13
Q2-
14Q
1-15
Q4-
15
$ Bi
llion
s
Actual Trend
SERIES US Real Gross Domestic Product (GDP)SOURCE US Bureau of Economic Analysis
24 Consecutive quarters of yty growth but still below long-run trend
UNEMPLOYMENT RATES AT 8-YEAR LOWS
US 50 (Mar 2016) CA 55 (Feb 2016)
0
2
4
6
8
10
12
14
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3
Jan-
14
Jul-1
4
Jan-
15
Jul-1
5
Jan-
16
CA US
SERIES Unemployment Rate The U-6 rate covers the unemployed underemployed and those who are not looking but who want a jobSOURCE US Bureau of Labor Statistics CA Employment Development Division
EMPLOYMENT GROWTH CALIFORNIA VS US
28
19
-8
-6
-4
-2
0
2
4
6 California USANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNEMPLOYMENT RATE BY CALIFORNIA METRO AREA
109105
9488
5855
5451
474343
4039
32
00 20 40 60 80 100 120
BakersfieldFresno MSA
ModestoStockton MSAInland Empire
Los AngelesSacramento
VenturaSan Diego
OaklandSan Luis ObispoOrange County
San Jose Santa ClaraSan FranciscoSan Mateo
SERIES Unemployment RateSOURCE CA Employment Development Division San Francisco and San Mateo unemployment rate is not seasonally adjusted
ANNUAL PERCENT CHANGE
February 2016 California 55
OILrsquoS DRAG COMING TO CLOSE MAYBEhellip
Dollars per Barrel
$0
$20
$40
$60
$80
$100
$120
$140
$160
SERIES Crude Oil Prices West Texas IntermediateSOURCE US Energy Information Administration
3rd Week of March $3832 5th consecutive week of growth
74 Drop
CONSUMER CONFIDENCE INDEX
March 2016 962
0
20
40
60
80
100
120
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3
Jan-
14
Jul-1
4
Jan-
15
Jul-1
5
Jan-
16
INDEX 100=1985
SERIES Consumer ConfidenceSOURCE The Conference Board
MORTGAGE RATES LOWER NOW THAN 2015
January 2009 ndash March 2016
0
1
2
3
4
5
6
FRMARM
MONTHLY WEEKLY
SERIES 30Yr FRM 5Yr ARMSOURCE Freddie Mac
WHERE ARE WE HEADED
- Fed takes a more dovish tone leave interest rates unchanged will gradually increase rates in 2016 and 2017 Action will be ldquodata determinedrdquo
- Risk of rates increasing too fast bringing economic growth to a halt
- Risk of rates increasing too slow zero leverage when next downturn hits
SERIES Median Price of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb-16 $446460Feb-15
$429930
INVENTORY DIPPED SLIGHTLY FROM LAST YEAR
Feb 2015 49 Months Feb 2016 46 Months
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
00
20
40
60
80
100
120
140
160
180
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 AND REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
DEMAND DECREASED IN THE BAY AREAAS SUPPLY CONTINUED TO DECLINE
-5
1
7
-3-4
-9-10
0
10
San Francisco Bay Area Southern California Central Valley
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
WHERE IS THE INVENTORY
ndash Affordability challenge for repeat buyersbull Low rate on current mortgage bull Low property taxesbull Concerned with capital gainsbull Why list when there is nowhere to go I can
affordbull Could not qualify for a mortgage today
ndash New construction recovering but LOWndash Demographics Trade-up buyer pool is smallerndash Measurement error Off- MLS (aka ldquopocketrsquo)
listings not being counted in listing stats
FEWER MIDDLE-AGE ADULTS IN RECENT YEARS
Source Harvard Joint Center of Housing Studies Census Bureau
DROP IN HOMEOWNERSHIP
Source Harvard Joint Center of Housing Studies Census Bureau
DECLINE IN OF TRADE UP BUYERS DUE TO POPULATION LOSS amp DROP IN HOMEOWNERSHIP RATE
Source Harvard Joint Center of Housing Studies Census Bureau
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
2008
2009
2010
2011
2012
2013
2014
2015
2016f
Nonfarm Job Growth
-13
-60
-11
11
24
32
31
30
23
Unemployment Rate
72
113
123
118
104
89
75
62
55
Population Growth
08
06
07
07
07
09
09
09
09
Real Disposable Income Change
15
-13
09
34
47
02
30
43
45
2008
2009
2010
2011
2012
2013
2014
2015
2016f
US GDP
-03
-34
24
18
23
22
24
24
27
Nonfarm Job Growth
-06
-44
-07
12
17
17
19
21
18
Unemployment
58
93
96
89
81
74
62
53
50
CPI
38
-04
16
31
21
15
16
01
21
Real Disposable Income Change
05
-04
10
25
31
-14
27
35
27
30-Yr FRM
60
50
47
45
37
40
42
39
45
UNEMPLOYMENT RATES AT 8-YEAR LOWS
US 50 (Mar 2016) CA 55 (Feb 2016)
0
2
4
6
8
10
12
14
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3
Jan-
14
Jul-1
4
Jan-
15
Jul-1
5
Jan-
16
CA US
SERIES Unemployment Rate The U-6 rate covers the unemployed underemployed and those who are not looking but who want a jobSOURCE US Bureau of Labor Statistics CA Employment Development Division
EMPLOYMENT GROWTH CALIFORNIA VS US
28
19
-8
-6
-4
-2
0
2
4
6 California USANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNEMPLOYMENT RATE BY CALIFORNIA METRO AREA
109105
9488
5855
5451
474343
4039
32
00 20 40 60 80 100 120
BakersfieldFresno MSA
ModestoStockton MSAInland Empire
Los AngelesSacramento
VenturaSan Diego
OaklandSan Luis ObispoOrange County
San Jose Santa ClaraSan FranciscoSan Mateo
SERIES Unemployment RateSOURCE CA Employment Development Division San Francisco and San Mateo unemployment rate is not seasonally adjusted
ANNUAL PERCENT CHANGE
February 2016 California 55
OILrsquoS DRAG COMING TO CLOSE MAYBEhellip
Dollars per Barrel
$0
$20
$40
$60
$80
$100
$120
$140
$160
SERIES Crude Oil Prices West Texas IntermediateSOURCE US Energy Information Administration
3rd Week of March $3832 5th consecutive week of growth
74 Drop
CONSUMER CONFIDENCE INDEX
March 2016 962
0
20
40
60
80
100
120
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3
Jan-
14
Jul-1
4
Jan-
15
Jul-1
5
Jan-
16
INDEX 100=1985
SERIES Consumer ConfidenceSOURCE The Conference Board
MORTGAGE RATES LOWER NOW THAN 2015
January 2009 ndash March 2016
0
1
2
3
4
5
6
FRMARM
MONTHLY WEEKLY
SERIES 30Yr FRM 5Yr ARMSOURCE Freddie Mac
WHERE ARE WE HEADED
- Fed takes a more dovish tone leave interest rates unchanged will gradually increase rates in 2016 and 2017 Action will be ldquodata determinedrdquo
- Risk of rates increasing too fast bringing economic growth to a halt
- Risk of rates increasing too slow zero leverage when next downturn hits
SERIES Median Price of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb-16 $446460Feb-15
$429930
INVENTORY DIPPED SLIGHTLY FROM LAST YEAR
Feb 2015 49 Months Feb 2016 46 Months
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
00
20
40
60
80
100
120
140
160
180
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 AND REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
DEMAND DECREASED IN THE BAY AREAAS SUPPLY CONTINUED TO DECLINE
-5
1
7
-3-4
-9-10
0
10
San Francisco Bay Area Southern California Central Valley
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
WHERE IS THE INVENTORY
ndash Affordability challenge for repeat buyersbull Low rate on current mortgage bull Low property taxesbull Concerned with capital gainsbull Why list when there is nowhere to go I can
affordbull Could not qualify for a mortgage today
ndash New construction recovering but LOWndash Demographics Trade-up buyer pool is smallerndash Measurement error Off- MLS (aka ldquopocketrsquo)
listings not being counted in listing stats
FEWER MIDDLE-AGE ADULTS IN RECENT YEARS
Source Harvard Joint Center of Housing Studies Census Bureau
DROP IN HOMEOWNERSHIP
Source Harvard Joint Center of Housing Studies Census Bureau
DECLINE IN OF TRADE UP BUYERS DUE TO POPULATION LOSS amp DROP IN HOMEOWNERSHIP RATE
Source Harvard Joint Center of Housing Studies Census Bureau
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
2008
2009
2010
2011
2012
2013
2014
2015
2016f
Nonfarm Job Growth
-13
-60
-11
11
24
32
31
30
23
Unemployment Rate
72
113
123
118
104
89
75
62
55
Population Growth
08
06
07
07
07
09
09
09
09
Real Disposable Income Change
15
-13
09
34
47
02
30
43
45
2008
2009
2010
2011
2012
2013
2014
2015
2016f
US GDP
-03
-34
24
18
23
22
24
24
27
Nonfarm Job Growth
-06
-44
-07
12
17
17
19
21
18
Unemployment
58
93
96
89
81
74
62
53
50
CPI
38
-04
16
31
21
15
16
01
21
Real Disposable Income Change
05
-04
10
25
31
-14
27
35
27
30-Yr FRM
60
50
47
45
37
40
42
39
45
EMPLOYMENT GROWTH CALIFORNIA VS US
28
19
-8
-6
-4
-2
0
2
4
6 California USANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNEMPLOYMENT RATE BY CALIFORNIA METRO AREA
109105
9488
5855
5451
474343
4039
32
00 20 40 60 80 100 120
BakersfieldFresno MSA
ModestoStockton MSAInland Empire
Los AngelesSacramento
VenturaSan Diego
OaklandSan Luis ObispoOrange County
San Jose Santa ClaraSan FranciscoSan Mateo
SERIES Unemployment RateSOURCE CA Employment Development Division San Francisco and San Mateo unemployment rate is not seasonally adjusted
ANNUAL PERCENT CHANGE
February 2016 California 55
OILrsquoS DRAG COMING TO CLOSE MAYBEhellip
Dollars per Barrel
$0
$20
$40
$60
$80
$100
$120
$140
$160
SERIES Crude Oil Prices West Texas IntermediateSOURCE US Energy Information Administration
3rd Week of March $3832 5th consecutive week of growth
74 Drop
CONSUMER CONFIDENCE INDEX
March 2016 962
0
20
40
60
80
100
120
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3
Jan-
14
Jul-1
4
Jan-
15
Jul-1
5
Jan-
16
INDEX 100=1985
SERIES Consumer ConfidenceSOURCE The Conference Board
MORTGAGE RATES LOWER NOW THAN 2015
January 2009 ndash March 2016
0
1
2
3
4
5
6
FRMARM
MONTHLY WEEKLY
SERIES 30Yr FRM 5Yr ARMSOURCE Freddie Mac
WHERE ARE WE HEADED
- Fed takes a more dovish tone leave interest rates unchanged will gradually increase rates in 2016 and 2017 Action will be ldquodata determinedrdquo
- Risk of rates increasing too fast bringing economic growth to a halt
- Risk of rates increasing too slow zero leverage when next downturn hits
SERIES Median Price of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb-16 $446460Feb-15
$429930
INVENTORY DIPPED SLIGHTLY FROM LAST YEAR
Feb 2015 49 Months Feb 2016 46 Months
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
00
20
40
60
80
100
120
140
160
180
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 AND REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
DEMAND DECREASED IN THE BAY AREAAS SUPPLY CONTINUED TO DECLINE
-5
1
7
-3-4
-9-10
0
10
San Francisco Bay Area Southern California Central Valley
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
WHERE IS THE INVENTORY
ndash Affordability challenge for repeat buyersbull Low rate on current mortgage bull Low property taxesbull Concerned with capital gainsbull Why list when there is nowhere to go I can
affordbull Could not qualify for a mortgage today
ndash New construction recovering but LOWndash Demographics Trade-up buyer pool is smallerndash Measurement error Off- MLS (aka ldquopocketrsquo)
listings not being counted in listing stats
FEWER MIDDLE-AGE ADULTS IN RECENT YEARS
Source Harvard Joint Center of Housing Studies Census Bureau
DROP IN HOMEOWNERSHIP
Source Harvard Joint Center of Housing Studies Census Bureau
DECLINE IN OF TRADE UP BUYERS DUE TO POPULATION LOSS amp DROP IN HOMEOWNERSHIP RATE
Source Harvard Joint Center of Housing Studies Census Bureau
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
2008
2009
2010
2011
2012
2013
2014
2015
2016f
Nonfarm Job Growth
-13
-60
-11
11
24
32
31
30
23
Unemployment Rate
72
113
123
118
104
89
75
62
55
Population Growth
08
06
07
07
07
09
09
09
09
Real Disposable Income Change
15
-13
09
34
47
02
30
43
45
2008
2009
2010
2011
2012
2013
2014
2015
2016f
US GDP
-03
-34
24
18
23
22
24
24
27
Nonfarm Job Growth
-06
-44
-07
12
17
17
19
21
18
Unemployment
58
93
96
89
81
74
62
53
50
CPI
38
-04
16
31
21
15
16
01
21
Real Disposable Income Change
05
-04
10
25
31
-14
27
35
27
30-Yr FRM
60
50
47
45
37
40
42
39
45
UNEMPLOYMENT RATE BY CALIFORNIA METRO AREA
109105
9488
5855
5451
474343
4039
32
00 20 40 60 80 100 120
BakersfieldFresno MSA
ModestoStockton MSAInland Empire
Los AngelesSacramento
VenturaSan Diego
OaklandSan Luis ObispoOrange County
San Jose Santa ClaraSan FranciscoSan Mateo
SERIES Unemployment RateSOURCE CA Employment Development Division San Francisco and San Mateo unemployment rate is not seasonally adjusted
ANNUAL PERCENT CHANGE
February 2016 California 55
OILrsquoS DRAG COMING TO CLOSE MAYBEhellip
Dollars per Barrel
$0
$20
$40
$60
$80
$100
$120
$140
$160
SERIES Crude Oil Prices West Texas IntermediateSOURCE US Energy Information Administration
3rd Week of March $3832 5th consecutive week of growth
74 Drop
CONSUMER CONFIDENCE INDEX
March 2016 962
0
20
40
60
80
100
120
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3
Jan-
14
Jul-1
4
Jan-
15
Jul-1
5
Jan-
16
INDEX 100=1985
SERIES Consumer ConfidenceSOURCE The Conference Board
MORTGAGE RATES LOWER NOW THAN 2015
January 2009 ndash March 2016
0
1
2
3
4
5
6
FRMARM
MONTHLY WEEKLY
SERIES 30Yr FRM 5Yr ARMSOURCE Freddie Mac
WHERE ARE WE HEADED
- Fed takes a more dovish tone leave interest rates unchanged will gradually increase rates in 2016 and 2017 Action will be ldquodata determinedrdquo
- Risk of rates increasing too fast bringing economic growth to a halt
- Risk of rates increasing too slow zero leverage when next downturn hits
SERIES Median Price of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb-16 $446460Feb-15
$429930
INVENTORY DIPPED SLIGHTLY FROM LAST YEAR
Feb 2015 49 Months Feb 2016 46 Months
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
00
20
40
60
80
100
120
140
160
180
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 AND REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
DEMAND DECREASED IN THE BAY AREAAS SUPPLY CONTINUED TO DECLINE
-5
1
7
-3-4
-9-10
0
10
San Francisco Bay Area Southern California Central Valley
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
WHERE IS THE INVENTORY
ndash Affordability challenge for repeat buyersbull Low rate on current mortgage bull Low property taxesbull Concerned with capital gainsbull Why list when there is nowhere to go I can
affordbull Could not qualify for a mortgage today
ndash New construction recovering but LOWndash Demographics Trade-up buyer pool is smallerndash Measurement error Off- MLS (aka ldquopocketrsquo)
listings not being counted in listing stats
FEWER MIDDLE-AGE ADULTS IN RECENT YEARS
Source Harvard Joint Center of Housing Studies Census Bureau
DROP IN HOMEOWNERSHIP
Source Harvard Joint Center of Housing Studies Census Bureau
DECLINE IN OF TRADE UP BUYERS DUE TO POPULATION LOSS amp DROP IN HOMEOWNERSHIP RATE
Source Harvard Joint Center of Housing Studies Census Bureau
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
2008
2009
2010
2011
2012
2013
2014
2015
2016f
Nonfarm Job Growth
-13
-60
-11
11
24
32
31
30
23
Unemployment Rate
72
113
123
118
104
89
75
62
55
Population Growth
08
06
07
07
07
09
09
09
09
Real Disposable Income Change
15
-13
09
34
47
02
30
43
45
2008
2009
2010
2011
2012
2013
2014
2015
2016f
US GDP
-03
-34
24
18
23
22
24
24
27
Nonfarm Job Growth
-06
-44
-07
12
17
17
19
21
18
Unemployment
58
93
96
89
81
74
62
53
50
CPI
38
-04
16
31
21
15
16
01
21
Real Disposable Income Change
05
-04
10
25
31
-14
27
35
27
30-Yr FRM
60
50
47
45
37
40
42
39
45
OILrsquoS DRAG COMING TO CLOSE MAYBEhellip
Dollars per Barrel
$0
$20
$40
$60
$80
$100
$120
$140
$160
SERIES Crude Oil Prices West Texas IntermediateSOURCE US Energy Information Administration
3rd Week of March $3832 5th consecutive week of growth
74 Drop
CONSUMER CONFIDENCE INDEX
March 2016 962
0
20
40
60
80
100
120
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3
Jan-
14
Jul-1
4
Jan-
15
Jul-1
5
Jan-
16
INDEX 100=1985
SERIES Consumer ConfidenceSOURCE The Conference Board
MORTGAGE RATES LOWER NOW THAN 2015
January 2009 ndash March 2016
0
1
2
3
4
5
6
FRMARM
MONTHLY WEEKLY
SERIES 30Yr FRM 5Yr ARMSOURCE Freddie Mac
WHERE ARE WE HEADED
- Fed takes a more dovish tone leave interest rates unchanged will gradually increase rates in 2016 and 2017 Action will be ldquodata determinedrdquo
- Risk of rates increasing too fast bringing economic growth to a halt
- Risk of rates increasing too slow zero leverage when next downturn hits
SERIES Median Price of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb-16 $446460Feb-15
$429930
INVENTORY DIPPED SLIGHTLY FROM LAST YEAR
Feb 2015 49 Months Feb 2016 46 Months
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
00
20
40
60
80
100
120
140
160
180
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 AND REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
DEMAND DECREASED IN THE BAY AREAAS SUPPLY CONTINUED TO DECLINE
-5
1
7
-3-4
-9-10
0
10
San Francisco Bay Area Southern California Central Valley
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
WHERE IS THE INVENTORY
ndash Affordability challenge for repeat buyersbull Low rate on current mortgage bull Low property taxesbull Concerned with capital gainsbull Why list when there is nowhere to go I can
affordbull Could not qualify for a mortgage today
ndash New construction recovering but LOWndash Demographics Trade-up buyer pool is smallerndash Measurement error Off- MLS (aka ldquopocketrsquo)
listings not being counted in listing stats
FEWER MIDDLE-AGE ADULTS IN RECENT YEARS
Source Harvard Joint Center of Housing Studies Census Bureau
DROP IN HOMEOWNERSHIP
Source Harvard Joint Center of Housing Studies Census Bureau
DECLINE IN OF TRADE UP BUYERS DUE TO POPULATION LOSS amp DROP IN HOMEOWNERSHIP RATE
Source Harvard Joint Center of Housing Studies Census Bureau
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
2008
2009
2010
2011
2012
2013
2014
2015
2016f
Nonfarm Job Growth
-13
-60
-11
11
24
32
31
30
23
Unemployment Rate
72
113
123
118
104
89
75
62
55
Population Growth
08
06
07
07
07
09
09
09
09
Real Disposable Income Change
15
-13
09
34
47
02
30
43
45
2008
2009
2010
2011
2012
2013
2014
2015
2016f
US GDP
-03
-34
24
18
23
22
24
24
27
Nonfarm Job Growth
-06
-44
-07
12
17
17
19
21
18
Unemployment
58
93
96
89
81
74
62
53
50
CPI
38
-04
16
31
21
15
16
01
21
Real Disposable Income Change
05
-04
10
25
31
-14
27
35
27
30-Yr FRM
60
50
47
45
37
40
42
39
45
CONSUMER CONFIDENCE INDEX
March 2016 962
0
20
40
60
80
100
120
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3
Jan-
14
Jul-1
4
Jan-
15
Jul-1
5
Jan-
16
INDEX 100=1985
SERIES Consumer ConfidenceSOURCE The Conference Board
MORTGAGE RATES LOWER NOW THAN 2015
January 2009 ndash March 2016
0
1
2
3
4
5
6
FRMARM
MONTHLY WEEKLY
SERIES 30Yr FRM 5Yr ARMSOURCE Freddie Mac
WHERE ARE WE HEADED
- Fed takes a more dovish tone leave interest rates unchanged will gradually increase rates in 2016 and 2017 Action will be ldquodata determinedrdquo
- Risk of rates increasing too fast bringing economic growth to a halt
- Risk of rates increasing too slow zero leverage when next downturn hits
SERIES Median Price of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb-16 $446460Feb-15
$429930
INVENTORY DIPPED SLIGHTLY FROM LAST YEAR
Feb 2015 49 Months Feb 2016 46 Months
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
00
20
40
60
80
100
120
140
160
180
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 AND REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
DEMAND DECREASED IN THE BAY AREAAS SUPPLY CONTINUED TO DECLINE
-5
1
7
-3-4
-9-10
0
10
San Francisco Bay Area Southern California Central Valley
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
WHERE IS THE INVENTORY
ndash Affordability challenge for repeat buyersbull Low rate on current mortgage bull Low property taxesbull Concerned with capital gainsbull Why list when there is nowhere to go I can
affordbull Could not qualify for a mortgage today
ndash New construction recovering but LOWndash Demographics Trade-up buyer pool is smallerndash Measurement error Off- MLS (aka ldquopocketrsquo)
listings not being counted in listing stats
FEWER MIDDLE-AGE ADULTS IN RECENT YEARS
Source Harvard Joint Center of Housing Studies Census Bureau
DROP IN HOMEOWNERSHIP
Source Harvard Joint Center of Housing Studies Census Bureau
DECLINE IN OF TRADE UP BUYERS DUE TO POPULATION LOSS amp DROP IN HOMEOWNERSHIP RATE
Source Harvard Joint Center of Housing Studies Census Bureau
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
2008
2009
2010
2011
2012
2013
2014
2015
2016f
Nonfarm Job Growth
-13
-60
-11
11
24
32
31
30
23
Unemployment Rate
72
113
123
118
104
89
75
62
55
Population Growth
08
06
07
07
07
09
09
09
09
Real Disposable Income Change
15
-13
09
34
47
02
30
43
45
2008
2009
2010
2011
2012
2013
2014
2015
2016f
US GDP
-03
-34
24
18
23
22
24
24
27
Nonfarm Job Growth
-06
-44
-07
12
17
17
19
21
18
Unemployment
58
93
96
89
81
74
62
53
50
CPI
38
-04
16
31
21
15
16
01
21
Real Disposable Income Change
05
-04
10
25
31
-14
27
35
27
30-Yr FRM
60
50
47
45
37
40
42
39
45
MORTGAGE RATES LOWER NOW THAN 2015
January 2009 ndash March 2016
0
1
2
3
4
5
6
FRMARM
MONTHLY WEEKLY
SERIES 30Yr FRM 5Yr ARMSOURCE Freddie Mac
WHERE ARE WE HEADED
- Fed takes a more dovish tone leave interest rates unchanged will gradually increase rates in 2016 and 2017 Action will be ldquodata determinedrdquo
- Risk of rates increasing too fast bringing economic growth to a halt
- Risk of rates increasing too slow zero leverage when next downturn hits
SERIES Median Price of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb-16 $446460Feb-15
$429930
INVENTORY DIPPED SLIGHTLY FROM LAST YEAR
Feb 2015 49 Months Feb 2016 46 Months
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
00
20
40
60
80
100
120
140
160
180
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 AND REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
DEMAND DECREASED IN THE BAY AREAAS SUPPLY CONTINUED TO DECLINE
-5
1
7
-3-4
-9-10
0
10
San Francisco Bay Area Southern California Central Valley
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
WHERE IS THE INVENTORY
ndash Affordability challenge for repeat buyersbull Low rate on current mortgage bull Low property taxesbull Concerned with capital gainsbull Why list when there is nowhere to go I can
affordbull Could not qualify for a mortgage today
ndash New construction recovering but LOWndash Demographics Trade-up buyer pool is smallerndash Measurement error Off- MLS (aka ldquopocketrsquo)
listings not being counted in listing stats
FEWER MIDDLE-AGE ADULTS IN RECENT YEARS
Source Harvard Joint Center of Housing Studies Census Bureau
DROP IN HOMEOWNERSHIP
Source Harvard Joint Center of Housing Studies Census Bureau
DECLINE IN OF TRADE UP BUYERS DUE TO POPULATION LOSS amp DROP IN HOMEOWNERSHIP RATE
Source Harvard Joint Center of Housing Studies Census Bureau
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
2008
2009
2010
2011
2012
2013
2014
2015
2016f
Nonfarm Job Growth
-13
-60
-11
11
24
32
31
30
23
Unemployment Rate
72
113
123
118
104
89
75
62
55
Population Growth
08
06
07
07
07
09
09
09
09
Real Disposable Income Change
15
-13
09
34
47
02
30
43
45
2008
2009
2010
2011
2012
2013
2014
2015
2016f
US GDP
-03
-34
24
18
23
22
24
24
27
Nonfarm Job Growth
-06
-44
-07
12
17
17
19
21
18
Unemployment
58
93
96
89
81
74
62
53
50
CPI
38
-04
16
31
21
15
16
01
21
Real Disposable Income Change
05
-04
10
25
31
-14
27
35
27
30-Yr FRM
60
50
47
45
37
40
42
39
45
WHERE ARE WE HEADED
- Fed takes a more dovish tone leave interest rates unchanged will gradually increase rates in 2016 and 2017 Action will be ldquodata determinedrdquo
- Risk of rates increasing too fast bringing economic growth to a halt
- Risk of rates increasing too slow zero leverage when next downturn hits
SERIES Median Price of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb-16 $446460Feb-15
$429930
INVENTORY DIPPED SLIGHTLY FROM LAST YEAR
Feb 2015 49 Months Feb 2016 46 Months
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
00
20
40
60
80
100
120
140
160
180
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 AND REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
DEMAND DECREASED IN THE BAY AREAAS SUPPLY CONTINUED TO DECLINE
-5
1
7
-3-4
-9-10
0
10
San Francisco Bay Area Southern California Central Valley
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
WHERE IS THE INVENTORY
ndash Affordability challenge for repeat buyersbull Low rate on current mortgage bull Low property taxesbull Concerned with capital gainsbull Why list when there is nowhere to go I can
affordbull Could not qualify for a mortgage today
ndash New construction recovering but LOWndash Demographics Trade-up buyer pool is smallerndash Measurement error Off- MLS (aka ldquopocketrsquo)
listings not being counted in listing stats
FEWER MIDDLE-AGE ADULTS IN RECENT YEARS
Source Harvard Joint Center of Housing Studies Census Bureau
DROP IN HOMEOWNERSHIP
Source Harvard Joint Center of Housing Studies Census Bureau
DECLINE IN OF TRADE UP BUYERS DUE TO POPULATION LOSS amp DROP IN HOMEOWNERSHIP RATE
Source Harvard Joint Center of Housing Studies Census Bureau
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
SERIES Median Price of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb-16 $446460Feb-15
$429930
INVENTORY DIPPED SLIGHTLY FROM LAST YEAR
Feb 2015 49 Months Feb 2016 46 Months
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
00
20
40
60
80
100
120
140
160
180
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 AND REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
DEMAND DECREASED IN THE BAY AREAAS SUPPLY CONTINUED TO DECLINE
-5
1
7
-3-4
-9-10
0
10
San Francisco Bay Area Southern California Central Valley
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
WHERE IS THE INVENTORY
ndash Affordability challenge for repeat buyersbull Low rate on current mortgage bull Low property taxesbull Concerned with capital gainsbull Why list when there is nowhere to go I can
affordbull Could not qualify for a mortgage today
ndash New construction recovering but LOWndash Demographics Trade-up buyer pool is smallerndash Measurement error Off- MLS (aka ldquopocketrsquo)
listings not being counted in listing stats
FEWER MIDDLE-AGE ADULTS IN RECENT YEARS
Source Harvard Joint Center of Housing Studies Census Bureau
DROP IN HOMEOWNERSHIP
Source Harvard Joint Center of Housing Studies Census Bureau
DECLINE IN OF TRADE UP BUYERS DUE TO POPULATION LOSS amp DROP IN HOMEOWNERSHIP RATE
Source Harvard Joint Center of Housing Studies Census Bureau
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
2008
2009
2010
2011
2012
2013
2014
2015
2016f
Nonfarm Job Growth
-13
-60
-11
11
24
32
31
30
23
Unemployment Rate
72
113
123
118
104
89
75
62
55
Population Growth
08
06
07
07
07
09
09
09
09
Real Disposable Income Change
15
-13
09
34
47
02
30
43
45
2008
2009
2010
2011
2012
2013
2014
2015
2016f
US GDP
-03
-34
24
18
23
22
24
24
27
Nonfarm Job Growth
-06
-44
-07
12
17
17
19
21
18
Unemployment
58
93
96
89
81
74
62
53
50
CPI
38
-04
16
31
21
15
16
01
21
Real Disposable Income Change
05
-04
10
25
31
-14
27
35
27
30-Yr FRM
60
50
47
45
37
40
42
39
45
CALIFORNIA ECONOMIC OUTLOOK
2010 2011 2012 2013 2014 2015 2016f
Nonfarm Job Growth -11 11 24 32 31 30 23
Unemployment Rate 123 118 104 89 75 62 55
Population Growth 07 07 07 09 09 09 09Real Disposable Income Change 09 34 47 02 30 43 45
SERIES CA Economic OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
CALIFORNIA HOUSING MARKET OUTLOOK
SALES OF EXISTING DETACHED HOMES
California Feb 2016 Sales 393340 Units +76YTD +64 YTY
-
100000
200000
300000
400000
500000
600000
700000
Sales are seasonally adjusted and annualized SERIES Sales of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb-16 393340
Feb-15 369620
HOUSEHOLD FORMATION REBOUNDING
SERIES Household FormationSOURCE US Census Bureau Housing Vacancy Survey
SERIES Median Price of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb-16 $446460Feb-15
$429930
INVENTORY DIPPED SLIGHTLY FROM LAST YEAR
Feb 2015 49 Months Feb 2016 46 Months
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
00
20
40
60
80
100
120
140
160
180
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 AND REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
DEMAND DECREASED IN THE BAY AREAAS SUPPLY CONTINUED TO DECLINE
-5
1
7
-3-4
-9-10
0
10
San Francisco Bay Area Southern California Central Valley
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
WHERE IS THE INVENTORY
ndash Affordability challenge for repeat buyersbull Low rate on current mortgage bull Low property taxesbull Concerned with capital gainsbull Why list when there is nowhere to go I can
affordbull Could not qualify for a mortgage today
ndash New construction recovering but LOWndash Demographics Trade-up buyer pool is smallerndash Measurement error Off- MLS (aka ldquopocketrsquo)
listings not being counted in listing stats
FEWER MIDDLE-AGE ADULTS IN RECENT YEARS
Source Harvard Joint Center of Housing Studies Census Bureau
DROP IN HOMEOWNERSHIP
Source Harvard Joint Center of Housing Studies Census Bureau
DECLINE IN OF TRADE UP BUYERS DUE TO POPULATION LOSS amp DROP IN HOMEOWNERSHIP RATE
Source Harvard Joint Center of Housing Studies Census Bureau
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
2008
2009
2010
2011
2012
2013
2014
2015
2016f
Nonfarm Job Growth
-13
-60
-11
11
24
32
31
30
23
Unemployment Rate
72
113
123
118
104
89
75
62
55
Population Growth
08
06
07
07
07
09
09
09
09
Real Disposable Income Change
15
-13
09
34
47
02
30
43
45
CALIFORNIA HOUSING MARKET OUTLOOK
SALES OF EXISTING DETACHED HOMES
California Feb 2016 Sales 393340 Units +76YTD +64 YTY
-
100000
200000
300000
400000
500000
600000
700000
Sales are seasonally adjusted and annualized SERIES Sales of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb-16 393340
Feb-15 369620
HOUSEHOLD FORMATION REBOUNDING
SERIES Household FormationSOURCE US Census Bureau Housing Vacancy Survey
SERIES Median Price of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb-16 $446460Feb-15
$429930
INVENTORY DIPPED SLIGHTLY FROM LAST YEAR
Feb 2015 49 Months Feb 2016 46 Months
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
00
20
40
60
80
100
120
140
160
180
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 AND REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
DEMAND DECREASED IN THE BAY AREAAS SUPPLY CONTINUED TO DECLINE
-5
1
7
-3-4
-9-10
0
10
San Francisco Bay Area Southern California Central Valley
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
WHERE IS THE INVENTORY
ndash Affordability challenge for repeat buyersbull Low rate on current mortgage bull Low property taxesbull Concerned with capital gainsbull Why list when there is nowhere to go I can
affordbull Could not qualify for a mortgage today
ndash New construction recovering but LOWndash Demographics Trade-up buyer pool is smallerndash Measurement error Off- MLS (aka ldquopocketrsquo)
listings not being counted in listing stats
FEWER MIDDLE-AGE ADULTS IN RECENT YEARS
Source Harvard Joint Center of Housing Studies Census Bureau
DROP IN HOMEOWNERSHIP
Source Harvard Joint Center of Housing Studies Census Bureau
DECLINE IN OF TRADE UP BUYERS DUE TO POPULATION LOSS amp DROP IN HOMEOWNERSHIP RATE
Source Harvard Joint Center of Housing Studies Census Bureau
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
SALES OF EXISTING DETACHED HOMES
California Feb 2016 Sales 393340 Units +76YTD +64 YTY
-
100000
200000
300000
400000
500000
600000
700000
Sales are seasonally adjusted and annualized SERIES Sales of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb-16 393340
Feb-15 369620
HOUSEHOLD FORMATION REBOUNDING
SERIES Household FormationSOURCE US Census Bureau Housing Vacancy Survey
SERIES Median Price of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb-16 $446460Feb-15
$429930
INVENTORY DIPPED SLIGHTLY FROM LAST YEAR
Feb 2015 49 Months Feb 2016 46 Months
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
00
20
40
60
80
100
120
140
160
180
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 AND REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
DEMAND DECREASED IN THE BAY AREAAS SUPPLY CONTINUED TO DECLINE
-5
1
7
-3-4
-9-10
0
10
San Francisco Bay Area Southern California Central Valley
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
WHERE IS THE INVENTORY
ndash Affordability challenge for repeat buyersbull Low rate on current mortgage bull Low property taxesbull Concerned with capital gainsbull Why list when there is nowhere to go I can
affordbull Could not qualify for a mortgage today
ndash New construction recovering but LOWndash Demographics Trade-up buyer pool is smallerndash Measurement error Off- MLS (aka ldquopocketrsquo)
listings not being counted in listing stats
FEWER MIDDLE-AGE ADULTS IN RECENT YEARS
Source Harvard Joint Center of Housing Studies Census Bureau
DROP IN HOMEOWNERSHIP
Source Harvard Joint Center of Housing Studies Census Bureau
DECLINE IN OF TRADE UP BUYERS DUE TO POPULATION LOSS amp DROP IN HOMEOWNERSHIP RATE
Source Harvard Joint Center of Housing Studies Census Bureau
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
HOUSEHOLD FORMATION REBOUNDING
SERIES Household FormationSOURCE US Census Bureau Housing Vacancy Survey
SERIES Median Price of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb-16 $446460Feb-15
$429930
INVENTORY DIPPED SLIGHTLY FROM LAST YEAR
Feb 2015 49 Months Feb 2016 46 Months
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
00
20
40
60
80
100
120
140
160
180
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 AND REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
DEMAND DECREASED IN THE BAY AREAAS SUPPLY CONTINUED TO DECLINE
-5
1
7
-3-4
-9-10
0
10
San Francisco Bay Area Southern California Central Valley
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
WHERE IS THE INVENTORY
ndash Affordability challenge for repeat buyersbull Low rate on current mortgage bull Low property taxesbull Concerned with capital gainsbull Why list when there is nowhere to go I can
affordbull Could not qualify for a mortgage today
ndash New construction recovering but LOWndash Demographics Trade-up buyer pool is smallerndash Measurement error Off- MLS (aka ldquopocketrsquo)
listings not being counted in listing stats
FEWER MIDDLE-AGE ADULTS IN RECENT YEARS
Source Harvard Joint Center of Housing Studies Census Bureau
DROP IN HOMEOWNERSHIP
Source Harvard Joint Center of Housing Studies Census Bureau
DECLINE IN OF TRADE UP BUYERS DUE TO POPULATION LOSS amp DROP IN HOMEOWNERSHIP RATE
Source Harvard Joint Center of Housing Studies Census Bureau
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
MEDIAN PRICE OF EXISTING DETACHED HOMES
California Feb 2016 $446460 -47 MTM +38 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000 P May-07$594530
T Feb-09$245230-59 frompeak
SERIES Median Price of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb-16 $446460Feb-15
$429930
INVENTORY DIPPED SLIGHTLY FROM LAST YEAR
Feb 2015 49 Months Feb 2016 46 Months
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
00
20
40
60
80
100
120
140
160
180
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 AND REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
DEMAND DECREASED IN THE BAY AREAAS SUPPLY CONTINUED TO DECLINE
-5
1
7
-3-4
-9-10
0
10
San Francisco Bay Area Southern California Central Valley
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
WHERE IS THE INVENTORY
ndash Affordability challenge for repeat buyersbull Low rate on current mortgage bull Low property taxesbull Concerned with capital gainsbull Why list when there is nowhere to go I can
affordbull Could not qualify for a mortgage today
ndash New construction recovering but LOWndash Demographics Trade-up buyer pool is smallerndash Measurement error Off- MLS (aka ldquopocketrsquo)
listings not being counted in listing stats
FEWER MIDDLE-AGE ADULTS IN RECENT YEARS
Source Harvard Joint Center of Housing Studies Census Bureau
DROP IN HOMEOWNERSHIP
Source Harvard Joint Center of Housing Studies Census Bureau
DECLINE IN OF TRADE UP BUYERS DUE TO POPULATION LOSS amp DROP IN HOMEOWNERSHIP RATE
Source Harvard Joint Center of Housing Studies Census Bureau
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
INVENTORY DIPPED SLIGHTLY FROM LAST YEAR
Feb 2015 49 Months Feb 2016 46 Months
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
00
20
40
60
80
100
120
140
160
180
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 AND REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
DEMAND DECREASED IN THE BAY AREAAS SUPPLY CONTINUED TO DECLINE
-5
1
7
-3-4
-9-10
0
10
San Francisco Bay Area Southern California Central Valley
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
WHERE IS THE INVENTORY
ndash Affordability challenge for repeat buyersbull Low rate on current mortgage bull Low property taxesbull Concerned with capital gainsbull Why list when there is nowhere to go I can
affordbull Could not qualify for a mortgage today
ndash New construction recovering but LOWndash Demographics Trade-up buyer pool is smallerndash Measurement error Off- MLS (aka ldquopocketrsquo)
listings not being counted in listing stats
FEWER MIDDLE-AGE ADULTS IN RECENT YEARS
Source Harvard Joint Center of Housing Studies Census Bureau
DROP IN HOMEOWNERSHIP
Source Harvard Joint Center of Housing Studies Census Bureau
DECLINE IN OF TRADE UP BUYERS DUE TO POPULATION LOSS amp DROP IN HOMEOWNERSHIP RATE
Source Harvard Joint Center of Housing Studies Census Bureau
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 AND REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
DEMAND DECREASED IN THE BAY AREAAS SUPPLY CONTINUED TO DECLINE
-5
1
7
-3-4
-9-10
0
10
San Francisco Bay Area Southern California Central Valley
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
WHERE IS THE INVENTORY
ndash Affordability challenge for repeat buyersbull Low rate on current mortgage bull Low property taxesbull Concerned with capital gainsbull Why list when there is nowhere to go I can
affordbull Could not qualify for a mortgage today
ndash New construction recovering but LOWndash Demographics Trade-up buyer pool is smallerndash Measurement error Off- MLS (aka ldquopocketrsquo)
listings not being counted in listing stats
FEWER MIDDLE-AGE ADULTS IN RECENT YEARS
Source Harvard Joint Center of Housing Studies Census Bureau
DROP IN HOMEOWNERSHIP
Source Harvard Joint Center of Housing Studies Census Bureau
DECLINE IN OF TRADE UP BUYERS DUE TO POPULATION LOSS amp DROP IN HOMEOWNERSHIP RATE
Source Harvard Joint Center of Housing Studies Census Bureau
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
DEMAND DECREASED IN THE BAY AREAAS SUPPLY CONTINUED TO DECLINE
-5
1
7
-3-4
-9-10
0
10
San Francisco Bay Area Southern California Central Valley
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
WHERE IS THE INVENTORY
ndash Affordability challenge for repeat buyersbull Low rate on current mortgage bull Low property taxesbull Concerned with capital gainsbull Why list when there is nowhere to go I can
affordbull Could not qualify for a mortgage today
ndash New construction recovering but LOWndash Demographics Trade-up buyer pool is smallerndash Measurement error Off- MLS (aka ldquopocketrsquo)
listings not being counted in listing stats
FEWER MIDDLE-AGE ADULTS IN RECENT YEARS
Source Harvard Joint Center of Housing Studies Census Bureau
DROP IN HOMEOWNERSHIP
Source Harvard Joint Center of Housing Studies Census Bureau
DECLINE IN OF TRADE UP BUYERS DUE TO POPULATION LOSS amp DROP IN HOMEOWNERSHIP RATE
Source Harvard Joint Center of Housing Studies Census Bureau
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
WHERE IS THE INVENTORY
ndash Affordability challenge for repeat buyersbull Low rate on current mortgage bull Low property taxesbull Concerned with capital gainsbull Why list when there is nowhere to go I can
affordbull Could not qualify for a mortgage today
ndash New construction recovering but LOWndash Demographics Trade-up buyer pool is smallerndash Measurement error Off- MLS (aka ldquopocketrsquo)
listings not being counted in listing stats
FEWER MIDDLE-AGE ADULTS IN RECENT YEARS
Source Harvard Joint Center of Housing Studies Census Bureau
DROP IN HOMEOWNERSHIP
Source Harvard Joint Center of Housing Studies Census Bureau
DECLINE IN OF TRADE UP BUYERS DUE TO POPULATION LOSS amp DROP IN HOMEOWNERSHIP RATE
Source Harvard Joint Center of Housing Studies Census Bureau
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
FEWER MIDDLE-AGE ADULTS IN RECENT YEARS
Source Harvard Joint Center of Housing Studies Census Bureau
DROP IN HOMEOWNERSHIP
Source Harvard Joint Center of Housing Studies Census Bureau
DECLINE IN OF TRADE UP BUYERS DUE TO POPULATION LOSS amp DROP IN HOMEOWNERSHIP RATE
Source Harvard Joint Center of Housing Studies Census Bureau
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
DROP IN HOMEOWNERSHIP
Source Harvard Joint Center of Housing Studies Census Bureau
DECLINE IN OF TRADE UP BUYERS DUE TO POPULATION LOSS amp DROP IN HOMEOWNERSHIP RATE
Source Harvard Joint Center of Housing Studies Census Bureau
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
DECLINE IN OF TRADE UP BUYERS DUE TO POPULATION LOSS amp DROP IN HOMEOWNERSHIP RATE
Source Harvard Joint Center of Housing Studies Census Bureau
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
ldquoMISSINGrdquo 100000 UNITS ANNUALLY AT LEAST
2015p 98500 (42190 sf 56310 mf)2016f 124600 total units
SERIES New Housing PermitsSOURCE Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth
165000yr
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
HOUSING AFFORDABILITY PEAKED Q1 2012PRICES V LOW RATES AND INCOME GROWTH
California vs US ndash 1984-2015 OF HOUSEHOLDS THAT CAN BUY A MEDIAN-PRICED HOME
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
30
58
0
10
20
30
40
50
60
70
80 CA USAnnual Quarterly
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
6158
55 54 5349 48 46 45 44
40 39 38 37
3027 26 26 26 25 25 23 22 21 21 21 20
1714
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA BY COUNTY
SERIES Housing Affordability IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
2015-Q4 able to purchase median priced home
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
$27010
$45340
$69990 $71630
$87520 $89250$98400
$119970
$96642
$0
$20000
$40000
$60000
$80000
$100000
$120000
RetailSalespersons
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters Police andSherriffs
PatrolOfficers
ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
2014 Annual Mean Wage
California
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
SHARE OF FIRST-TIME BUYERS REMAINS BELOW LONG-RUN AVERAGE
295
0
10
20
30
40
50
First-Time Home Buyers Long Run Average
Long Run Average = 38
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS
Baby Boomers
75
223
Own
Rent
Other
Millennials
20
41
39
Own
Rent
Other
Q What is your current living situationSERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME
Q What type of debt do you have that would make it difficult to buy a home
35
12
7
2
11
53
41
17
8
7
4
43
0 10 20 30 40 50 60
Credit cards
Auto loan
Consolidated personal loan
Private loan from friend relative
Other
None
Millennials
Boomers
SERIES 2014 Baby Boomer SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
FINANCIAL CHARACTERISTICS MILLENNIALS VS BABY BOOMERS
Millennials Baby Boomers
Median Household Income $100000 $130000
Median Home Price $470000 $505000
Median Monthly Mortgage Payment $1538 $1516
Median Downpayment (in $$) $50000 $79500
Median Downpayment (in to Price) 131 20
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
THE SHARE OF INTERNATIONAL BUYERS DROPPED TO THE LOWEST LEVEL IN 8 YEARS
4
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012 2013 2014 2015Q Was the buyer an international buyer ndash a person who was a citizen of another country who wished to purchase residential real estate in the US
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
ESTIMATE OF SALES BY COUNTRY
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
ESTIMATE OF SALES TO INTERNATIONAL CLIENTS(IN BILLION DOLLARS)
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
4 STATES ACCOUNTED FOR frac12 OF INTERNATIONAL SALES
SERIES 2015 Profile of International Home Buying ActivitySOURCE NATIONAL ASSOCIATION OF REALTORSreg
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
COUNTRY OF INTERNATIONAL BUYER
bull China (43)
bull Mexico (8)
bull South Korea (8)
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
BAY AREA HOUSING MARKET
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
0
1000
2000
3000
4000
5000
6000
7000
8000
SALES OF EXISTING DETACHED HOMES
Bay Area Feb 2016 2491 Units +04 YTD -55 YTY
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Nonfarm Employment (Thousands)
2015
2007
Change
Change
AlamedaContra Costa
10951
10643
308
29
Marin
1130
1069
61
57
Napa
708
646
62
96
San FranciscoSan Mateo
10511
8993
1518
169
Santa Clara
10428
9211
1217
132
Solano
1323
1301
22
17
Sonoma
1970
1899
71
37
Bay Area
37021
33762
3259
97
NONFARM EMPLOYMENT
Bay Area Region
SERIES Employment GrowthSOURCE US Bureau of Labor Statistics
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Sheet1
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Y-t-D
Alameda
447
495
479
-97
-67
-23
Contra-Costa
541
539
594
04
-89
-57
Marin
94
90
107
44
-121
-42
Napa
55
78
70
-295
-214
-22
San Francisco
99
101
122
-20
-189
-78
San Mateo
199
215
212
-74
-61
78
Santa Clara
488
529
546
-78
-106
-12
Solano
325
267
273
217
190
128
Sonoma
243
251
232
-32
47
110
Sheet2
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
Sheet3
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
February 2016
January 2016
February 2015
Median Time on the Market
255 Days 281Days 248 Days
Unsold Inventory Index 32 Mos 24 Mos 28 Mos
SUPPLY INDICATORS
Bay Area
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
SERIES Median Time of Market Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
INVENTORY DROPPED SIGNIFICANTLY IN THE BAY AREA SINCE 2009 BUT REMAINED TIGHT
Note ldquoUnsold Inventory Indexrdquo represents the number of months it would take to sell the remaining inventory for the month inquestion The remaining inventory for the month is defined as the number of properties that were ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) and divide the sum by the number of ldquoSoldrdquo properties for the month in question
32
42
52
00
10
20
30
40
50
60
70
80
90 Bay Area Central Valley So CA
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES Unsold Inventory IndexSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County Feb-16 Jan-16 Feb-15
Alameda 30 20 29Contra-Costa 30 25 15
Marin 38 28 39Napa 65 41 56
San Francisco 33 23 25San Mateo 27 19 28Santa Clara 29 19 26
Solano 28 34 42Sonoma 39 32 41
S F Bay Area 32 24 28
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
Sheet1
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
County
Feb-16
Jan-16
Feb-15
Alameda
30
20
29
Contra-Costa
30
25
15
Marin
38
28
39
Napa
65
41
56
San Francisco
33
23
25
San Mateo
27
19
28
Santa Clara
29
19
26
Solano
28
34
42
Sonoma
39
32
41
S F Bay Area
32
24
28
162
Sheet2
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
Sheet3
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
BAY AREA DEMAND AND SUPPLY CONTINUED TO DECLINE IN FEBRUARY
-7-9
-12
-21 -19
-6-11
19
5
-5
2
-13
-5-8
16
-6
16
-24
4
-3
-30
-20
-10
0
10
20
30
Sales Active ListingsYear-to-Year Chg
SOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Feb 2016
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San FranciscoBay Area
SouthernCalifornia
Other Counties inCalifornia
Number of Multiple Offers
SERIES 2015 Housing Market SurveySOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
36
56
63
0 20 40 60 80
Other Counties inCalifornia
Southern California
San Francisco BayArea
Percent with Multiple Offers
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area February 2016 $696430 Up 40 YTY
$-
$100000
$200000
$300000
$400000
$500000
$600000
$700000
$800000
$900000
SERIES Median Price of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
Sheet1
Sheet2
Sheet3
HOUSING DEMAND INCREASED IN MORE AFFORDABLE REGIONS
Annual Change in Sales
SERIES Sales of Existing SFHSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County 2015 (yty chg)
Alameda -07Contra-Costa 79
Marin -38Napa 105
San Francisco -82San Mateo -64Santa Clara 60
Solano 186Sonoma 28
S F Bay Area 35
Sheet1
Sheet2
Sheet3
SAN FRANCISCO COUNTY
0
50
100
150
200
250
300
350
400
450
SALES OF EXISTING DETACHED HOMES
San Francisco County Feb 2016 99 Units -78 YTD -189 YTY
SERIES Sales of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
County
Feb-16
Jan-16
Feb-15
M-t-M
Y-t-Y
Alameda
$712990
$711900
$651950
02
94
Contra-Costa
$538650
$499550
$476340
78
131
Marin
$1113640
$955360
$1023440
166
88
Napa
$664470
$610000
$544120
89
221
San Francisco
$1437500
$1173610
$1154760
225
245
San Mateo
$1200000
$1077500
$1200000
114
00
Santa Clara
$942500
$895000
$915130
53
30
Solano
$365620
$361670
$337500
11
83
Sonoma
$554610
$593750
$489330
-66
133
Sheet2
Sheet3
HOUSING DEMAND INCREASED IN MORE AFFORDABLE REGIONS
Annual Change in Sales
SERIES Sales of Existing SFHSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County 2015 (yty chg)
Alameda -07Contra-Costa 79
Marin -38Napa 105
San Francisco -82San Mateo -64Santa Clara 60
Solano 186Sonoma 28
S F Bay Area 35
Sheet1
Sheet2
Sheet3
SAN FRANCISCO COUNTY
0
50
100
150
200
250
300
350
400
450
SALES OF EXISTING DETACHED HOMES
San Francisco County Feb 2016 99 Units -78 YTD -189 YTY
SERIES Sales of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
Sheet3
HOUSING DEMAND INCREASED IN MORE AFFORDABLE REGIONS
Annual Change in Sales
SERIES Sales of Existing SFHSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County 2015 (yty chg)
Alameda -07Contra-Costa 79
Marin -38Napa 105
San Francisco -82San Mateo -64Santa Clara 60
Solano 186Sonoma 28
S F Bay Area 35
Sheet1
Sheet2
Sheet3
SAN FRANCISCO COUNTY
0
50
100
150
200
250
300
350
400
450
SALES OF EXISTING DETACHED HOMES
San Francisco County Feb 2016 99 Units -78 YTD -189 YTY
SERIES Sales of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
HOUSING DEMAND INCREASED IN MORE AFFORDABLE REGIONS
Annual Change in Sales
SERIES Sales of Existing SFHSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
County 2015 (yty chg)
Alameda -07Contra-Costa 79
Marin -38Napa 105
San Francisco -82San Mateo -64Santa Clara 60
Solano 186Sonoma 28
S F Bay Area 35
Sheet1
Sheet2
Sheet3
SAN FRANCISCO COUNTY
0
50
100
150
200
250
300
350
400
450
SALES OF EXISTING DETACHED HOMES
San Francisco County Feb 2016 99 Units -78 YTD -189 YTY
SERIES Sales of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
Sheet1
Sheet2
Sheet3
SAN FRANCISCO COUNTY
0
50
100
150
200
250
300
350
400
450
SALES OF EXISTING DETACHED HOMES
San Francisco County Feb 2016 99 Units -78 YTD -189 YTY
SERIES Sales of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
County
2015 (yty chg)
Alameda
-07
Contra-Costa
79
Marin
-38
Napa
105
San Francisco
-82
San Mateo
-64
Santa Clara
60
Solano
186
Sonoma
28
S F Bay Area
35
Sheet2
Sheet3
SAN FRANCISCO COUNTY
0
50
100
150
200
250
300
350
400
450
SALES OF EXISTING DETACHED HOMES
San Francisco County Feb 2016 99 Units -78 YTD -189 YTY
SERIES Sales of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
Sheet3
SAN FRANCISCO COUNTY
0
50
100
150
200
250
300
350
400
450
SALES OF EXISTING DETACHED HOMES
San Francisco County Feb 2016 99 Units -78 YTD -189 YTY
SERIES Sales of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
SAN FRANCISCO COUNTY
0
50
100
150
200
250
300
350
400
450
SALES OF EXISTING DETACHED HOMES
San Francisco County Feb 2016 99 Units -78 YTD -189 YTY
SERIES Sales of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
0
50
100
150
200
250
300
350
400
450
SALES OF EXISTING DETACHED HOMES
San Francisco County Feb 2016 99 Units -78 YTD -189 YTY
SERIES Sales of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
SALES DOWN TWO YEARS IN A ROW AFTER REACHING THE RECENT PEAK IN 2013
San Francisco 2015 -82 2016 YTD -78
SERIES Sales of Existing Detached HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
EMPLOYMENT GROWTHCALIFORNIA VS SAN FRANCISCOSAN MATEO
28
40
-80
-60
-40
-20
00
20
40
60
80 California San FranciscoSan MateoANNUAL PERCENT CHANGE
SERIES Total Nonfarm EmploymentSOURCE US Bureau of Labor Statistics CA Employment Development Division
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
UNSOLD INVENTORY INDEX
San Francisco County February 2016 33 Months
Note The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular month with the sales rate of the month in consideration Inventory includes listings with ldquoActiverdquo ldquoPendingrdquo and ldquoContingentrdquo (when available) statuses
0
2
4
6
8
10
12
SERIES Unsold Inventory Index of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
NEW HOUSING PERMITS
San Francisco County Feb 2016 635 Units +1018 YTD
0
200
400
600
800
1000
1200 Single Family Multi-Family
SERIES New Housing PermitsSOURCE Construction Industry Research Board
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
MASSIVE HOUSING SHORTAGE
MetroJob Creation
2010-2015
New HomeConstruction
2010-2015 Ratio
San Francisco-Oakland 234000 30000 78
Grand Rapids 46000 6000 78San Jose 118000 23000 51San Diego 101000 21000 49Miami-Ft Lauderdale 191000 48000 39
Salt Lake City 57000 15000 39New York City 400000 114000 35
MEDIAN PRICE OF EXISTING DETACHED HOMES
San Francisco County Feb 2016 $1437500 Up 245 YTY
$0
$200000
$400000
$600000
$800000
$1000000
$1200000
$1400000
$1600000
SERIES Median Price of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ASKING RENTS FOR CLASS AampB APARTMENTS
San Francisco MSA 2015 Q4 $3146 Up 82 YTY
$0
$500
$1000
$1500
$2000
$2500
$3000
$3500
Q4 2005 to Q4 2010 Up 173
SERIES Asking RentsSOURCE Realfacts
Q4 2010 to Q4 2015 Up 655
0
1
2
3
4
5
6
7
VACANCY RATES FOR CLASS AampB APARTMENTS
San Francisco MSA 2015 Q4 56
SERIES Vacancy RatesSOURCE Realfacts
HOUSING AFFORDABILITY INDEX
San Francisco County 4th Quarter 2015 11 OF HOUSEHOLDS THAT CAN BUY
0
5
10
15
20
25
30
35
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
$30340$52690 $49230
$70680$88390
$97570
$124980 $118690
$254107
$0
$50000
$100000
$150000
$200000
$250000
$300000
RetailSalespersons
AutoMechanics
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
Annual Mean Wage
San Francisco
OAKLAND
SALES OF SINGLE FAMILY HOMES
Oakland February 2016 120 Units -11 2015 YTD +76 2016 YTD +62 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Oakland February 2016 $523500Down 48 MTM Up 79 YTY
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
MEDIAN PRICE OF EXISTING DETACHED HOMES
San Francisco County Feb 2016 $1437500 Up 245 YTY
$0
$200000
$400000
$600000
$800000
$1000000
$1200000
$1400000
$1600000
SERIES Median Price of Existing Single Family HomesSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
ASKING RENTS FOR CLASS AampB APARTMENTS
San Francisco MSA 2015 Q4 $3146 Up 82 YTY
$0
$500
$1000
$1500
$2000
$2500
$3000
$3500
Q4 2005 to Q4 2010 Up 173
SERIES Asking RentsSOURCE Realfacts
Q4 2010 to Q4 2015 Up 655
0
1
2
3
4
5
6
7
VACANCY RATES FOR CLASS AampB APARTMENTS
San Francisco MSA 2015 Q4 56
SERIES Vacancy RatesSOURCE Realfacts
HOUSING AFFORDABILITY INDEX
San Francisco County 4th Quarter 2015 11 OF HOUSEHOLDS THAT CAN BUY
0
5
10
15
20
25
30
35
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
$30340$52690 $49230
$70680$88390
$97570
$124980 $118690
$254107
$0
$50000
$100000
$150000
$200000
$250000
$300000
RetailSalespersons
AutoMechanics
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
Annual Mean Wage
San Francisco
OAKLAND
SALES OF SINGLE FAMILY HOMES
Oakland February 2016 120 Units -11 2015 YTD +76 2016 YTD +62 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Oakland February 2016 $523500Down 48 MTM Up 79 YTY
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
ASKING RENTS FOR CLASS AampB APARTMENTS
San Francisco MSA 2015 Q4 $3146 Up 82 YTY
$0
$500
$1000
$1500
$2000
$2500
$3000
$3500
Q4 2005 to Q4 2010 Up 173
SERIES Asking RentsSOURCE Realfacts
Q4 2010 to Q4 2015 Up 655
0
1
2
3
4
5
6
7
VACANCY RATES FOR CLASS AampB APARTMENTS
San Francisco MSA 2015 Q4 56
SERIES Vacancy RatesSOURCE Realfacts
HOUSING AFFORDABILITY INDEX
San Francisco County 4th Quarter 2015 11 OF HOUSEHOLDS THAT CAN BUY
0
5
10
15
20
25
30
35
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
$30340$52690 $49230
$70680$88390
$97570
$124980 $118690
$254107
$0
$50000
$100000
$150000
$200000
$250000
$300000
RetailSalespersons
AutoMechanics
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
Annual Mean Wage
San Francisco
OAKLAND
SALES OF SINGLE FAMILY HOMES
Oakland February 2016 120 Units -11 2015 YTD +76 2016 YTD +62 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Oakland February 2016 $523500Down 48 MTM Up 79 YTY
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
0
1
2
3
4
5
6
7
VACANCY RATES FOR CLASS AampB APARTMENTS
San Francisco MSA 2015 Q4 56
SERIES Vacancy RatesSOURCE Realfacts
HOUSING AFFORDABILITY INDEX
San Francisco County 4th Quarter 2015 11 OF HOUSEHOLDS THAT CAN BUY
0
5
10
15
20
25
30
35
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
$30340$52690 $49230
$70680$88390
$97570
$124980 $118690
$254107
$0
$50000
$100000
$150000
$200000
$250000
$300000
RetailSalespersons
AutoMechanics
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
Annual Mean Wage
San Francisco
OAKLAND
SALES OF SINGLE FAMILY HOMES
Oakland February 2016 120 Units -11 2015 YTD +76 2016 YTD +62 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Oakland February 2016 $523500Down 48 MTM Up 79 YTY
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
HOUSING AFFORDABILITY INDEX
San Francisco County 4th Quarter 2015 11 OF HOUSEHOLDS THAT CAN BUY
0
5
10
15
20
25
30
35
SERIES Housing Affordability Index of Traditional BuyersSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
$30340$52690 $49230
$70680$88390
$97570
$124980 $118690
$254107
$0
$50000
$100000
$150000
$200000
$250000
$300000
RetailSalespersons
AutoMechanics
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
Annual Mean Wage
San Francisco
OAKLAND
SALES OF SINGLE FAMILY HOMES
Oakland February 2016 120 Units -11 2015 YTD +76 2016 YTD +62 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Oakland February 2016 $523500Down 48 MTM Up 79 YTY
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
$30340$52690 $49230
$70680$88390
$97570
$124980 $118690
$254107
$0
$50000
$100000
$150000
$200000
$250000
$300000
RetailSalespersons
AutoMechanics
Chefs andHead Cooks
ElementarySchool
Teachers
Firefighters ComputerProgrammers
RegisteredNurses
SoftwareDevelopers
(Applications)
Min IncRequired toBuy a Med
Home
HOW WAGES MEASURED AGAINST INCOME REQUIRED TO BUY A HOME
SOURCE Bureau of Labor Statistics CAR
Annual Mean Wage
San Francisco
OAKLAND
SALES OF SINGLE FAMILY HOMES
Oakland February 2016 120 Units -11 2015 YTD +76 2016 YTD +62 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Oakland February 2016 $523500Down 48 MTM Up 79 YTY
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
OAKLAND
SALES OF SINGLE FAMILY HOMES
Oakland February 2016 120 Units -11 2015 YTD +76 2016 YTD +62 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Oakland February 2016 $523500Down 48 MTM Up 79 YTY
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
SALES OF SINGLE FAMILY HOMES
Oakland February 2016 120 Units -11 2015 YTD +76 2016 YTD +62 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Oakland February 2016 $523500Down 48 MTM Up 79 YTY
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
MEDIAN PRICE OF SINGLE FAMILY HOMES
Oakland February 2016 $523500Down 48 MTM Up 79 YTY
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
MARIN COUNTY
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
SALES OF SINGLE FAMILY HOMES
Marin County February 2016 100 Units -35 2015 YTD -31 2016 YTD -91 YTY
SOURCE Clarus Market Metrics
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
MEDIAN PRICE OF SINGLE FAMILY HOMES
Marin County February 2016 $1153500Up 195 MTM Up 162 YTY
SOURCE Clarus Market Metrics
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
FOR SALE PROPERTIES
Marin County February 2016 372 Units-89 2015 YTD -221 2016 YTD -173 YTY
SOURCE Clarus Market Metrics
Note ldquoFor Sale Propertiesrdquo represents the overall supply that exist throughout the entire month including any listings that appear as ldquoActiverdquo any point in time during the month
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
Sheet1
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
2008
2009
2010
2011
2012
2013
2014
2015
2016f
SFH Resales (000s)
3814
4749
4165
4226
4398
4149
3827
4071
4326
Change
304
245
-123
14
41
-59
-78
64
63
Median Price ($000s)
$3485
$2750
$3050
$2860
$3193
$4072
$4469
$4744
$4894
Change
-378
-211
109
-62
116
275
98
62
32
Housing Affordability Index
60
51
48
53
51
36
30
31
28
30-Yr FRM
60
50
47
45
37
40
42
39
45
SALES UP FOR 2015 AND CONTINUE TO IMPROVE IN 2016 PRICE WILL GROW STEADILY THIS YEAR AND NEXT
Units (Thousand)
40714326
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Sales of Existing Detached Homes
$474 $489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Median PricePrice
(Thousand)
SERIES CA Housing Market OutlookSOURCE CALIFORNIA ASSOCIATION OF REALTORSreg
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
bull Both CA home sales and prices will be up mid -single digits in 2016
bull Fundamental demand drivers (jobs rates household formation) are strong
bull Housing affordability an insurmountable hurdle for many
bull Trading updown is too expensive for Boomersbull CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEY TAKEAWAYS
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
MARKET OPPORTUNITIES
ndash Millennialsbull Turn renters into first-time buyersbull First-time buyers who bought with tax credit back in 2009
are ready to trade-upbull Understand the differences in needs between Millennial
first-time buyers and Millennial trade-up buyers ndash Baby Boomers
bull Ready to downsizebull Understand Boomersrsquo priorities investment and retirementbull If we canrsquot keep them in CA help them find a place out of
state Network with REALTORSreg outside of CA
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
MARKET OPPORTUNITIES
ndash Minorities bull Minorities have grown in homebuyer share over time bull Surge in the number of minority households will play a big
role in the increase in housing demand in the next 10 yearsbull Develop programs and marketing material tailored towards
minority home buyers of different ethnicityndash Investor sellers
bull Investor buyers who purchased bargain properties a few years ago are ready to sell as home prices start leveling off
ndash Everyone elsehellipbull Low interest rates will be here a little longer
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
STAY CONNECTED WITH RESEARCH
CARResearchGroup
CARResearchInfo
OncarorgCARResearch
Housingmatterscarorg
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
Key Takeaways
Market opportunities
Market opportunities
Stay connected with Research
Thank You
THANK YOUwwwcarorgmarketdata
oscarwcarorgThis presentation can be found on
wwwcarorgmarketdataSpeeches amp Presentations
2016 economic and housing market Forecast
Overview
Economic outlook
Macro Economy Summary
US GDP at risk from weak global growth
Progress Continues Unimpressively
Unemployment Rates at 8-year lows
Employment Growth California vs US
Unemployment rate by California Metro Area
Oilrsquos Drag Coming to Close Maybehellip
Consumer Confidence Index
Mortgage Rates Lower Now than 2015
Where are we headed
US Economic Outlook
California Economic Outlook
California housing market outlook
Sales of Existing Detached Homes
Household Formation rebounding
Median Price of Existing Detached Homes
Inventory dipped slightly From Last Year
Inventory Dropped Significantly in the Bay Area since 2009 and Remained Tight
Demand Decreased in the Bay AreaAS supply Continued to Decline
Where is the inventory
Fewer Middle-Age Adults in Recent years
Drop in Homeownership
Decline in of Trade Up Buyers Due to population loss amp drop in Homeownership Rate
ldquomissingrdquo 100000 units annually at least
Housing Affordability peaked q1 2012prices v low rates and income growth
Housing Affordability In CA by county
How Wages measured against Income Required to buy a Home
Share of First-Time Buyers remains Below Long-Run Average
Home Ownership Rate Nearly 4 Times Higher Among Boomers
Boomers Have Less Debt than Millennials that Prevents Buying a Home
Financial Characteristics millennials vs Baby Boomers
The Share of International Buyers Dropped to the lowest level in 8 years
Estimate of sales by Country
Estimate of sales to international clients(in billion dollars)
4 states Accounted for frac12 of International Sales
Country of International Buyer
Bay Area Housing Market
Sales of Existing Detached Homes
Sales Bounced back after declining in 2013 and 2014
Nonfarm Employment
Sales of Existing Detached Homes
Supply Indicators
Inventory Dropped Significantly in the Bay Area since 2009 But Remained Tight
Unsold Inventory Index (Months)
Bay Area Demand And supply Continued to Decline in February
Massive Housing Shortage
Tight supply created more market Competition
Median Price of Existing Detached Homes
Median Price of Existing Detached Homes
Housing Demand increased in more affordable regions
San Francisco County
Sales of Existing Detached Homes
Sales Down two years in a row after reaching the recent peak in 2013
Employment Growth California vs San FranciscoSan Mateo
Unsold Inventory Index
New Housing Permits
San Francisco New Housing Permits
Massive Housing Shortage
Median Price of Existing Detached Homes
Asking Rents for Class AampB Apartments
Vacancy Rates for Class AampB Apartments
Housing Affordability Index
How Wages measured against Income Required to buy a Home
Oakland
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
Marin County
Sales of Single Family Homes
Median Price of Single Family Homes
For Sale Properties
2016 forecast
California Housing Market Outlook
Sales up for 2015 and continue to Improve in 2016 Price will Grow Steadily this Year and Next
