economic and market outlook 2010-11 sacramento association of realtors® november 2, 2010 robert a....
TRANSCRIPT
Economic and Market Outlook 2010-11
Sacramento Association of REALTORS®November 2, 2010
Robert A. Kleinhenz, Ph.D.Deputy Chief EconomistCalifornia Association of REALTORS®
www.car.org Market Data Speeches
Speeches & Presentations
Overview
US and California Economy
California Housing Market
Local/Regional Housing Market
California Forecast
Opportunities
US and California Economic Conditions
Gross Domestic Product
-8%
-7%
-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
19
70
19
72
19
74
19
76
19
78
19
80
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82
19
84
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20
02
20
04
20
06
20
08
----
Q4
-09
Q2
-10
2009: -2.6%; 2010 Q2: +1.7%
ANNUAL PERCENT CHANGE, CHAIN-TYPE (2005) $
ANNUAL QTRLY
2009 Largest Annual Drop since 1938 (-3.4%)
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
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US-CA CA US
SOURCE: CA Employment Development Division
Unemployment RateCalifornia vs. United States
-750000
-550000
-350000
-150000
50000
250000
450000
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U.S. Non-farm Job Growth
SOURCE: US Dept of Labor, Bureau of Labor Statistics
Month-to-Month Changes
-160000
-140000
-120000
-100000
-80000
-60000
-40000
-20000
0
20000
40000
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California Non-farm Job Growth
SOURCE: CA Employment Development Division
Month-to-Month Changes
California Employment Trends by Industry
Industry 2000 2005 2010 YTD2005 to
2010 Mining and Logging 26,500 23,600 26,400 2,800 Construction 733,400 905,300 567,200 (338,100) Manufacturing 1,852,700 1,502,600 1,250,800 (251,800) Trade, Transportation & Utilities 2,727,900 2,822,100 2,572,000 (250,100) Information 576,700 473,600 444,600 (29,000) Financial Activities 806,900 927,200 776,900 (150,300) Professional & Business Services 2,221,800 2,159,800 2,059,900 (99,900) Educational & Health Services 1,401,000 1,586,500 1,725,300 138,800 Leisure & Hospitality 1,335,600 1,475,200 1,509,900 34,700 Other Services 487,700 505,500 479,600 (25,900) Government 2,318,100 2,420,200 2,354,100 (66,100)TOTAL 14,488,300 14,801,600 13,766,700 (1,034,900)
SOURCE: California Association of REALTORS®
Consumer Price IndexSeptember 2010: All Items 1.1% YTY; Core 0.8% YTY
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
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All Items
Core
PERCENT CHANGE FROM A YEAR AGO, 100=1982-1984
U.S. Economic Outlook
2004 2005 2006 2007 2008 2009 2010f 2011f
US GDP 3.6% 3.1% 2.7% 1.9% 0.0% -2.6% 2.7% 2.4%
Nonfarm Job Growth
1.1% 1.7% 1.8% 1.1% -0.4% -4.3% -0.5% 1.0%
Unemployment 5.5% 5.1% 4.6% 4.6% 5.8% 9.3% 9.7% 9.6%
CPI 2.7% 3.4% 3.2% 2.8% 3.8% -0.3% 1.5% 1.3%
Real Disposable Income, % Change
3.4% 1.3% 4.0% 2.2% 0.5% 0.9% 1.2% 1.1%
SOURCE: California Association of REALTORS®
Forecast Date: October 1, 2010
California Economic Outlook
2004 2005 2006 2007 2008 2009 2010f 2011f
Nonfarm Job Growth
1.0% 1.8% 1.7% 0.8% -1.3% -6.0% -1.0% 1.6%
Unemployment Rate
6.2% 5.4% 4.9% 5.4% 7.2% 11.4% 12.3% 11.4%
Population Growth
1.4% 1.2% 1.1% 1.1% 1.2% 1.1% 1.0% 1.0%
Real Disposable Income, % Change
3.6% 1.3% 3.4% 1.5% 0.1% -2.2% 0.6% 1.9%
SOURCE: California Association of REALTORS®
Forecast Date: October 1, 2010
Economic Snapshot
Recession over, slow recovery expected Government support in first half of 2010 Private sector economy must accelerate thereafter
Business, Global Trade, Consumers Labor market: mixed signals, job growth in late ’10 Inflation: in check through 2011 Monetary policy: no rate hikes until 2011
California Housing Market
Sales of Existing Detached Homes and Pacific West Consumer Confidence
California, September 2010 Sales: 466,580 Units, -12.2% YTY, -8.8% YTD
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
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60
80
100
120
140
160
Sales Consumer Confidence INDEXUNITS
SOURCE: California Association of REALTORS®; The Conference Board
*Sales are seasonally adjusted and annualized
0
20
40
60
80
100
120
140
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CA US
CA Sales Back to Pre-Peak Levels by mid ‘08California Vs. U.S. 2000-Present
SOURCE: California Association of REALTORS®
Seasonally Adjusted Sales Index (Jan 2004=100)
P: May-07$594,530
T: Feb-09$245,230
-59% frompeak
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
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Median Price of Existing Detached HomesCalifornia, September 2010: $309,900, Up 4.5% YTY
SOURCE: California Association of REALTORS®
Trough vs. Current Price – Sep 2010
RegionTrough Month
Trough Price
Sept-10 Median
% Chg From Trough
Monterey Region Feb-09 $241,130 $343,000 42.2%
San Francisco Bay Area Feb-09 $399,040 $563,480 41.2%
Santa Clara Feb-09 $445,000 $620,000 39.3%
CALIFORNIA Feb-09 $245,230 $309,900 26.4%
Ventura Feb-09 $359,630 $453,290 26.0%
Riverside/San Bernardino Apr-09 $156,840 $191,080 21.8%
Orange County Jan-09 $423,100 $510,530 20.7%
San Diego Mar-09 $326,830 $388,850 19.0%
Los Angeles Mar-09 $295,100 $349,040 18.3%
High Desert May-09 $106,210 $124,960 17.7%
Northern Wine Country Feb-09 $310,950 $358,040 15.1%
Palm Springs/Lower Desert Apr-09 $150,140 $169,320 12.8%
Sacramento Apr-09 $167,340 $181,780 8.6%
San Luis Obispo Apr-09 $338,160 $354,880 4.9%Northern California May-10 $243,200 $245,190 0.8%
SOURCE: California Association of REALTORS®
Unsold Inventory IndexCalifornia, September 2010: 6.2 Months
0
2
4
6
8
10
12
14
16
18
20
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SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
MONTHS
Price Range (Thousand) Sep-10 Aug-10 Sep-09
$1,000K+ 11.6 11.3 11.8$750-1000K 7.0 7.1 6.9$500-750K 6.4 6.4 4.4$300-500K 5.4 5.4 3.7$0-300K 4.2 4.0 2.8
Unsold Inventory Index (Months)
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
County/Region Aug-09 Aug-10
San Diego 39.1% 26.9%Orange 41.4% 36.4%San Luis Obispo 38.7% 40.7%Los Angeles 56.2% 47.4%Sacramento 66.4% 62.8%Riverside/San Bernardino 79.5% 66.0%Kern 72.9% 63.4%
Distressed Sales to Total Sales Ratio
SOURCE: California Association of REALTORS®
19% 16%30%
22%36%
43% 38%
20%27%
25%10%
20%8%
27%
0%
20%
40%
60%
80%S
an D
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Ora
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San
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s A
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Sac
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Ker
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/San
Ber
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o
REO/Bank Owned Short Sales
Distressed Sales Breakdown(Aug 2010)
Price Differential by Type of SaleREO, Short-Sale, Regular
SOURCE: C.A.R.
Median Price
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10
Conventional Short Sale Bank Owned All Types
California Foreclosure Filings, Sept. 2010NOD: 31,594, -36.3% YTD • NTS: 26,039, -7.6% YTD
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
60,000
65,000
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Notice of Trustee Sale - Counts Notice of Defaults - Counts
SOURCE: ForeclosureRadar.com
6 Month Average:
NODs: 28,329
NTSs: 30,338
California Foreclosure Outcomes, Sept. 2010REO: -7.1% YTD • 3rd Party: +67.7% YTD • Cancel: +111.8% YTD
0
5,000
10,000
15,000
20,000
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30,000
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REOs Sold to 3rd Party Cancellations
SOURCE: ForeclosureRadar.com
6 Month Average:
REO: 13,319
3rd Party: 3,520
Cancelled: 18,072
First-time Buyer Housing Affordability IndexCalifornia Vs. U.S. 2000-2010
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
20
00
Q1
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Q3
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Q1
20
01
Q3
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20
02
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20
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Q1
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Q3
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Q1
CA US
% OF HOUSEHOLDS THAT CAN BUY
SOURCE: California Association of REALTORS®
SOURCE: Federal Home Loan Mortgage Corporation
Mortgage Rates
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
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FRM
ARM
FederalFunds
Median Price to Median HH Income RatioCalifornia
4
10
4.55
0
1
2
3
4
5
6
7
8
9
10
11
19
89
19
90
19
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20
06
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07
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20
09
20
10
SOURCE: California Association of REALTORS®
Average Over Years Shown: 6:1 Ratio
Market Snapshot
Has Market Hit Bottom? State sales hit bottom in late ’07 State median price hit bottom in early ’09 Some parts of state still looking for bottom but are close
Inventory Marginally Higher but Lean More MLS inventory at higher price ranges Distressed properties at steady pace, more short sales
Looking Ahead This Year: Sales down 10%, Price up 11% Next Year: Sales up 2%, Price up 2% Supply: More discretionary sellers
Historic Opportunity for Qualified Buyers
Sacramento Area Housing Market
Unemployment Rate
2%
4%
6%
8%
10%
12%
14%
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ul-
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SOURCE: CA Employment Development Division
Sacramento County, September 2010: 13.0%
Nonfarm EmploymentSacramento-Arden Arcade-Roseville MSA, August 2010: Down 3.0% YTY
SOURCE: CA Employment Development Division
Y-T-Y PERCENT CHANGE
-7%
-5%
-3%
-1%
1%
3%
5%
7%
Ja
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Sales of Existing Detached HomesSacramento County, 2009: 19,983 Units, Up 3.5% YTY
UNITS
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
0
5,000
10,000
15,000
20,000
25,0001
98
9
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
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01
20
02
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03
20
04
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05
20
06
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07
20
08
20
09
Sales of Existing Detached Homes and Pacific West Consumer Confidence
Sacramento County, Sept. 2010: 1,430 Units, Down 13.3% YTD, Down 12.3% YTY
INDEXUNITS
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2200
2400
2600
Ja
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95
Ja
n-9
6J
ul-
96
Ja
n-9
7J
ul-
97
Ja
n-9
8J
ul-
98
Ja
n-9
9J
ul-
99
Ja
n-0
0J
ul-
00
Ja
n-0
1J
ul-
01
Ja
n-0
2J
ul-
02
Ja
n-0
3J
ul-
03
Ja
n-0
4J
ul-
04
Ja
n-0
5J
ul-
05
Ja
n-0
6J
ul-
06
Ja
n-0
7J
ul-
07
Ja
n-0
8J
ul-
08
Ja
n-0
9J
ul-
09
Ja
n-1
0J
ul-
10
0
20
40
60
80
100
120
140
160
Sales Consumer Confidence
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®; The Conference Board
Sales of Existing Detached HomesPlacer County, 2009: 4,112 Units, Up 1.0% YTY
UNITS
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
0
1,000
2,000
3,000
4,000
5,000
6,000
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
Sales of Existing Detached Homes and Pacific West Consumer Confidence
Placer County, Sept. 2010: 408 Units, Up 15.2% YTD, Up 4.9% YTY
INDEXUNITS
0
200
400
600
800
Ja
n-9
1J
ul-
91
Ja
n-9
2J
ul-
92
Ja
n-9
3J
ul-
93
Ja
n-9
4J
ul-
94
Ja
n-9
5J
ul-
95
Ja
n-9
6J
ul-
96
Ja
n-9
7J
ul-
97
Ja
n-9
8J
ul-
98
Ja
n-9
9J
ul-
99
Ja
n-0
0J
ul-
00
Ja
n-0
1J
ul-
01
Ja
n-0
2J
ul-
02
Ja
n-0
3J
ul-
03
Ja
n-0
4J
ul-
04
Ja
n-0
5J
ul-
05
Ja
n-0
6J
ul-
06
Ja
n-0
7J
ul-
07
Ja
n-0
8J
ul-
08
Ja
n-0
9J
ul-
09
Ja
n-1
0J
ul-
10
0
20
40
60
80
100
120
140
160
Sales Consumer Confidence
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®; The Conference Board
Annual Median PriceSacramento County, 2009: $180,543, Down 16.7% YTY
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
$-
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,0001
98
9
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
Median Price of Existing Detached Homes
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000J
an
-89
Ju
l-8
9J
an
-90
Ju
l-9
0J
an
-91
Ju
l-9
1J
an
-92
Ju
l-9
2J
an
-93
Ju
l-9
3J
an
-94
Ju
l-9
4J
an
-95
Ju
l-9
5J
an
-96
Ju
l-9
6J
an
-97
Ju
l-9
7J
an
-98
Ju
l-9
8J
an
-99
Ju
l-9
9J
an
-00
Ju
l-0
0J
an
-01
Ju
l-0
1J
an
-02
Ju
l-0
2J
an
-03
Ju
l-0
3J
an
-04
Ju
l-0
4J
an
-05
Ju
l-0
5J
an
-06
Ju
l-0
6J
an
-07
Ju
l-0
7J
an
-08
Ju
l-0
8J
an
-09
Ju
l-0
9J
an
-10
Ju
l-1
0
Sacramento County, Sept. 2010: $181,780, Down 1.3% YTY
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Annual Median PricePlacer County, 2009: $296,478, Down 15.1% YTY
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
19
89
19
91
19
93
19
95
19
97
19
99
20
01
20
03
20
05
20
07
20
09
Median Price of Existing Detached HomesPlacer County, Sept. 2010: $281,820, Down 4.8% YTY
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
$550,000
Ja
n-8
9J
ul-
89
Ja
n-9
0J
ul-
90
Ja
n-9
1J
ul-
91
Ja
n-9
2J
ul-
92
Ja
n-9
3J
ul-
93
Ja
n-9
4J
ul-
94
Ja
n-9
5J
ul-
95
Ja
n-9
6J
ul-
96
Ja
n-9
7J
ul-
97
Ja
n-9
8J
ul-
98
Ja
n-9
9J
ul-
99
Ja
n-0
0J
ul-
00
Ja
n-0
1J
ul-
01
Ja
n-0
2J
ul-
02
Ja
n-0
3J
ul-
03
Ja
n-0
4J
ul-
04
Ja
n-0
5J
ul-
05
Ja
n-0
6J
ul-
06
Ja
n-0
7J
ul-
07
Ja
n-0
8J
ul-
08
Ja
n-0
9J
ul-
09
Ja
n-1
0J
ul-
10
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Sep-10 Sep-09Yearly %Change
Sacramento County $170,000 $175,750 -3.3%
Antelope $180,000 $190,000 -5.3%
Carmichael $241,000 $255,000 -5.5%
Citrus Heights $163,750 $165,000 -0.8%
Elk Grove $223,000 $237,500 -6.1%
Fair Oaks $200,000 $217,000 -7.8%
Folsom $307,250 $375,000 -18.1%
Galt $165,500 $186,500 -11.3%
North Highlands $114,000 $102,000 11.8%
Orangevale $205,000 $213,500 -4.0%
Rancho Cordova $227,500 $234,000 -2.8%
Sacramento $140,500 $142,000 -1.1%
Median Home Sales PriceSacramento County
SOURCE: C.A.R.; DataQuick Information Systems. The price statistics are derived from all types of home sales -- new and existing, condos and single-family.
Unsold Inventory IndexSacramento County, August 2010: 3.4 Months
MONTHS
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
Ja
n-9
3J
ul-
93
Ja
n-9
4J
ul-
94
Ja
n-9
5J
ul-
95
Ja
n-9
6J
ul-
96
Ja
n-9
7J
ul-
97
Ja
n-9
8J
ul-
98
Ja
n-9
9J
ul-
99
Ja
n-0
0J
ul-
00
Ja
n-0
1J
ul-
01
Ja
n-0
2J
ul-
02
Ja
n-0
3J
ul-
03
Ja
n-0
4J
ul-
04
Ja
n-0
5J
ul-
05
Ja
n-0
6J
ul-
06
Ja
n-0
7J
ul-
07
Ja
n-0
8J
ul-
08
Ja
n-0
9J
ul-
09
Ja
n-1
0J
ul-
10
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Foreclosure Filings – Sacramento County
SOURCE: ForeclosureRadar.com
Foreclosure Outcomes – Sacramento County
SOURCE: ForeclosureRadar.com
Foreclosure Inventories-Sacramento County
SOURCE: ForeclosureRadar.com
Sources of Population GrowthSacramento County (1981-2008)
THOUSANDS
-10
-5
0
5
10
15
20
25
30
35
40Natural Increase
Net Migration
SOURCE: CA Department of Finance
Where are new Sacramento County households coming from?
• Placer (3,207)• Yolo (2,017)• El Dorado (1,297)• Alameda County (1,060)• San Joaquin (1,041)• Los Angeles (947)• Total incoming for 2008: 27,700• Total outgoing for 2008: 28,228
Source: NAR Relocation Report 2008 – IRS Data; Item 187-06067
New Housing PermitsSacramento County, August 2010: 65 Units, Up 28.0% YTD
0
500
1000
1500
2000
2500
Ja
n-8
8J
ul-
88
Ja
n-8
9J
ul-
89
Ja
n-9
0J
ul-
90
Ja
n-9
1J
ul-
91
Ja
n-9
2J
ul-
92
Ja
n-9
3J
ul-
93
Ja
n-9
4J
ul-
94
Ja
n-9
5J
ul-
95
Ja
n-9
6J
ul-
96
Ja
n-9
7J
ul-
97
Ja
n-9
8J
ul-
98
Ja
n-9
9J
ul-
99
Ja
n-0
0J
ul-
00
Ja
n-0
1J
ul-
01
Ja
n-0
2J
ul-
02
Ja
n-0
3J
ul-
03
Ja
n-0
4J
ul-
04
Ja
n-0
5J
ul-
05
Ja
n-0
6J
ul-
06
Ja
n-0
7J
ul-
07
Ja
n-0
8J
ul-
08
Ja
n-0
9J
ul-
09
Ja
n-1
0J
ul-
10
Single Family Multi-Family
SOURCE: Construction Industry Research Board
Asking Rents for Class A&B ApartmentsSacramento MSA, 2010 Q2: $928, Down 2.2% YTY
$0
$200
$400
$600
$800
$1,000
Q3
/97
Q2
/98
Q1
/99
Q4
/99
Q3
/00
Q2
/01
Q1
/02
Q4
/02
Q3
/03
Q2
/04
Q1
/05
Q4
/05
Q3
/06
Q2
/07
Q1
/08
Q4
/08
Q3
/09
Q2
/10
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®; REALFACTS
Vacancy Rates for Class A&B ApartmentsSacramento MSA, 2010 Q2: 6.9%
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®; REALFACTS
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
19
90
19
92
19
94
Q4
/95
Q4
/96
Q3
/97
Q1
/98
Q3
/98
Q1
/99
Q3
/99
Q1
/00
Q3
/00
Q1
/01
Q3
/01
Q1
/02
Q3
/02
Q1
/03
Q3
/03
Q1
/04
Q3
/04
Q1
/05
Q3
/05
Q1
/06
Q3
/06
Q1
/07
Q3
/07
Q1
/08
Q3
/08
Q1
/09
Q3
/09
Q1
/10
VACANCY RATE
Alameda 529 488 705 8.4% -25.0% -8.9%Contra Costa (Central County) 334 339 321 -1.5% 4.0% 24.7%Marin 149 138 143 8.0% 4.2% 21.1%San Francisco 239 263 240 -9.1% -0.4% 2.6%San Mateo 332 401 391 -17.2% -15.1% 10.4%Santa Clara 853 886 1096 -3.7% -22.2% -1.4%Santa Cruz 142 153 152 -7.2% -6.6% -4.4%Solano 359 407 488 -11.8% -26.4% -18.5%Sonoma 379 387 396 -2.1% -4.3% -6.6%
Y-t-DY-t-YCounty Sep-10 Aug-10 Sep-09 M-t-M
Sales of Existing Detached HomesBay Area Counties
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Median Price of Existing Detached HomesBay Area Counties
Alameda 462,499$ 515,625$ 487,894$ -10.3% -5.2%Contra Costa (Central County) 648,734$ 670,454$ 626,275$ -3.2% 3.6%Marin 797,794$ 794,117$ 804,166$ 0.5% -0.8%San Francisco 652,243$ 675,781$ 685,975$ -3.5% -4.9%San Mateo 705,000$ 790,000$ 690,000$ -10.8% 2.2%Santa Clara 620,000$ 633,250$ 553,000$ -2.1% 12.1%Santa Cruz 532,500$ 514,000$ 534,000$ 3.6% -0.3%Solano 199,696$ 207,094$ 207,432$ -3.6% -3.7%Sonoma 369,657$ 378,828$ 352,586$ -2.4% 4.8%
Sep-09 M-t-M Y-t-YCounty Sep-10 Aug-10
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Market Cycle – Sacramento County
Sales MonthMonthly
SalesPercentage
ChangePeak Aug-04 2,328Trough Sep-07 706 -69.7%Current Sep-10 1,430 102.5%
SOURCE: California Association of REALTORS®
Market Cycle – Sacramento County
Median Price MonthMonthly
PricePercentage
ChangePeak Aug-05 $394,450Trough Apr-09 $167,340 -57.6%Current Sep-10 $181,780 8.6%
SOURCE: California Association of REALTORS®
First-time Buyer Housing Affordability IndexSacramento County, 2nd Quarter 2010: 80%
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%Q
1/0
3Q
2/0
3Q
3/0
3Q
4/0
3Q
1/0
4Q
2/0
4Q
3/0
4Q
4/0
4Q
1/0
5Q
2/0
5Q
3/0
5Q
4/0
5Q
1/0
6Q
2/0
6Q
3/0
6Q
4/0
6Q
1/0
7Q
2/0
7Q
3/0
7Q
4/0
7Q
1/0
8Q
2/0
8Q
3/0
8Q
4/0
8Q
1/0
9Q
2/0
9Q
3/0
9Q
4/0
9Q
1/1
0Q
2/1
0
% OF HOUSEHOLDS THAT CAN BUY
Forecasts
California Housing Market Outlook
2003 2004 2005 2006 2007 2008 2009 2010f 2011f
SFH Resales (000s)
601.8 624.7 625.0 477.5 346.9 439.8 546.5 492.0 502.0
% Change 5.1% 3.8% 0.03% -23.6% -27.3% 26.8% 24.3% -10.0% 2.0%
Median Price ($000s)
$371.5 $450.8 $522.7 $556.4 $560.3 $346.4 $275.0 $306.5 $312.5
% Change 17.5% 21.3% 16.0% 6.5% 0.7% -38.2% -20.6% 11.5% 2.0%
30-Yr FRM 5.8% 5.8% 5.9% 6.4% 6.3% 6.0% 5.1% 4.7% 5.1%
1-Yr ARM 3.8% 3.9% 4.5% 5.5% 5.6% 5.2% 4.7% 3.9% 4.1%
Source: CALIFORNIA ASSOCIATION OF REALTORS®
Forecast Date: October 1, 2010
129 132
181
224
282
327
266
194
152 150 151 157
26%
16%
-19%
-27%-22%
-1% 0.3%4%
24%
37%
2%
$0.0
$50.0
$100.0
$150.0
$200.0
$250.0
$300.0
$350.0
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
F
20
11
F
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
$ Volume of Sales Percent Change% Change$ in Billion
California Housing Market Dollar Volume Up Marginally in 2010, Better in 2011
SOURCE: California Association of REALTORS®
-54%
Market Opportunities in 2011
• Improved Affordability/Responsible Ownership– First-Time Buyers in Driver’s Seat– Repeat Buyers: More for Money
• Financing– Know Fannie/Freddie terms– FHA for first time buyers– Qualifying is Key– FRM-ARM Spread Narrow
• REOs/Loan Mods– REOs/Short Sales– HAFA Programs – Fannie Mae, Freddie Mac, Lenders
How’s Your Competitive Edge?
• Consumers are more connected, more mobile than ever. Are you…
– Utilizing mobile technology: laptops, etc?– Going wireless?– Capitalizing on Internet marketing?– Measuring your return on time/investment
with respect to social media?
Thinking About Next Year …
Education/Training
Buyers is all shapes/sizes
Changing landscape of distressed sales
Capitalize on technology
Information & insights
Public policy: GSE reform, loan limits, local/state
www.car.org Market Data Speeches
Speeches & Presentations
The End - - Thank You