california housing market 2012 forecast coldwell banker san diego/inland empire october 25, 2011...

CALIFORNIA HOUSING MARKET 2012 FORECAST

Coldwell Banker San Diego/Inland Empire

October 25, 2011

Leslie Appleton-Young, Chief Economist

Overview

US and California Economies

California Housing Market

Regional & Local Markets

2011 Annual Market Survey

2012 Housing Market Forecast

U.S. Economic Outlook

Japanese

Earthquake &

Tsunami

Sovereign DebtCrisis in EuroZone

Oil Price Spikes

2011: A Year of Wild Cards

Arab Uprising

Political Change on Capitol Hill

Debt Limit Ceiling & Downgrade of US Debt

Stock Market Volatility

Gross Domestic Product: Stall Speed

2010: 2.8%; 2011 Q1: 0.4% Q2: 1.0% ANNUAL PERCENT CHANGE, CHAIN-TYPE (2005) $

-8%-7%-6%

-5%-4%

-3%-2%-1%

2%3%4%

ANNUAL QTRLY

SOURCE: US Dept of Commerce, Bureau of Economic Analysis

Components of GDP:Consumer Spending Weak; Gov’t Sector Down

Quarterly Percent Change

Consumption Fixed Nonres.Investment

Net Exports Government

Q3 2010

Q4 2010

Q1 2011

Q2 2011

QUARTERLY PERCENT CHANGE

Consumers Pulling BackHome Equity & Reverse Wealth Effect

Consumer Spending 2011 Q1: 2.7% Q2: 0.4%

SOURCE: US Dept of Commerce, Bureau of Economic Analysis

CA Underwater Mortgages

SOURCE: CoreLogic

Q4-2009

Q1-2010

Q2-2010

Q3-2010

Q4-2010

Q1-2011

Q2-2011

Negative Equity Share in CA Near Negative Equity Share in CA

Unemployment Stubbornly High September 2011

SOURCE: CA Employment Development Division

California (12.1%) vs. United States (9.1%)

Unemployment RateSan Diego County, September 2011: 9.7%

Unemployment Rate – Cont.San Diego County – September 2011

SOURCE: CA Employment Development Department

CCD Census County DivisionCDP Census Designated Place

Area Name Labor Force Rate

Lakeside CDP 11,200 10.8%Lemon Grove city 13,900 12.2%National City city 24,800 18.5%Oceanside city 86,000 9.3%Poway city 28,000 5.8%Ramona CDP 8,900 9.0%San Diego city 700,200 9.7%San Marcos city 31,200 9.7%Santee city 32,900 8.2%Solana Beach city 8,500 6.6%Spring Valley CDP 15,200 11.3%Valley Center CDP 4,100 4.8%Vista city 49,100 10.8%San Diego County 1,568,600 9.7%

Unemployment RateSan Diego County – September 2011

SOURCE: CA Employment Development DepartmentCCD Census County DivisionCDP Census Designated Place

Area Name Labor Force Rate

Bonita CDP 6,700 7.7%Bostonia CDP 8,300 13.3%Carlsbad city 47,600 6.5%Casa de Oro Mount Helix CDP 11,100 9.2%Chula Vista city 92,300 11.3%Coronado city 8,700 6.2%Del Mar city 3,000 5.1%El Cajon city 53,300 13.2%Encinitas city 38,800 6.9%Escondido city 73,200 10.1%Fallbrook CDP 14,700 12.3%Imperial Beach city 14,100 15.5%La Mesa city 34,000 8.2%

U.S. Job Growth: Flat in August

SOURCE: US Dept of Labor, Bureau of Labor Statistics

Month-to-Month Changes

Recession Job Losses: 8.4 millionSince Jan’10: +1.8 million

-900,000

-800,000

-700,000

-600,000

-500,000

-400,000

-300,000

-200,000

-100,000

100,000

200,000

300,000

400,000

500,000

California Job Growth Faltering

Month-to-Month ChangesRecession Job Losses: 1.3 million

Since Jan’10: +188,100

-160000

-140000

-120000

-100000

-80000

-60000

-40000

-20000

100000

San Diego Nonfarm EmploymentSan Diego County, September 2011: Up 1.4% YTY

Y-T-Y PERCENT CHANGE

Where are California’s Jobs? Employment Trends:

Construction & Financial Sectors Biggest Losers

SOURCE: California Association of REALTORS®

Industry 2005 Jul-11Year to

Mining and Logging 23,600 27,600 4,000

Construction 905,300 567,300 -338,000

Manufacturing 1,502,600 1,257,600 -245,000

Trade, Transportation & Utilities 2,822,100 2,641,500 -180,600

Information 473,600 455,400 -18,200

Financial Activities 920,300 755,800 -164,500

Professional & Business Services 2,160,700 2,136,200 -24,500

Educational & Health Services 1,593,400 1,837,000 243,600

Leisure & Hospitality 1,475,200 1,531,600 56,400

Other Services 505,500 484,500 -21,000

Government 2,420,200 2,380,200 -40,000

TOTAL 14,802,500 14,074,700 -727,800

CA New Housing Permits2010: 44,601 units, +22.5% YTY; Aug 2011: +2.6% YTD

50,000

100,000

150,000

200,000

250,000

300,0001

Single Family Multi-Family

SOURCE: CBIA

New Housing PermitsSan Diego County, September 2011: 420 Units, Up 47.2% YTD

4500Ja

Single Family Multi-Family

SOURCE: Construction Industry Research Board

INDEX, 100=1985

Consumer Confidence SlippingMarginal Gains in September

September 2011: 45.4

Source: National Federation of Independent Business

Crisis of Confidence: Small Business Optimism Down

Consumer Prices Low

CPI August 2011: All Items +3.8% YTY; Core +2.0% YTY

All Items

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

Monetary Policy

FRM ARM

MONTHLY WEEKLY

Mortgage Rates @ Historical LowsDebt Down Grade Ignited Flight to Quality

SOURCE: Federal Home Loan Mortgage Corporation

Classic Liquidity Trap: Consumers DeleveragingLow Rates and Low Borrowing

Federal Funds

Fiscal Policy

US Deficit Highest in Decades2010: 11% of GDP (Revenues – Expenses)

19621965

19681971

19741977

19801983

19861989

19921995

19982001

20042007

2010-12.0%

-10.0%

4.0%Deficit as a % of GDP

Source: US Treasury, BEA, compiled by C.A.R.Note: Positive = Surplus

US Debt Jumped as Government Responded to Financial Crisis 2010: 93% of GDP

19621965

19681971

19741977

19801983

19861989

19921995

19982001

20042007

20100.0%

100.0%

Debt as a % of GDP

Source: US Treasury, compiled by C.A.R.

Obama Jobs Proposal

What: $450 Billion stimulus: Tax cuts ($250B) and infrastructure spending ($200B)

Why: Economy is stalled/Avoid double-dip Zero job growth in August/high unemploymentStabilize confidence: consumer, business, investor

How:Increase taxes on the richEntitlement ReformTax Reform

Housing

Obama Mortgage Refinance Proposal “HARP II”

What: Make it easier for homeowners who are significantly underwater AND not behind on their payments to refi at today’s low rates. Mortgage sold to Fannie or Freddie on or before May 31, 2009Help 1 million homeowners to refinance (Pool: 7 million)

Why: Housing market is stalled / Consumers leery of spending

How: Modify the Home Affordable Refi ProgramEliminates 125% capWaives some GSE fees if loan term reducedEliminates appraisals & extensive underwritingModifies Reps and Warranties

California vs. U.S. Sales

19701973

19771980

19821984

19861988

19901992

19941996

19982000

20022004

20062008

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

100,000

200,000

300,000

400,000

500,000

600,000

700,000

US Home Sales CA Home Sales

California vs. U.S. Median Price

19701973

19771980

19821984

19861988

19901992

19941996

19982000

20022004

20062008

2010$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

US Median Price CA Median Price

Housing Affordability: Historic HighsObsolete Metric?

California Vs. U.S.

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

% OF HOUSEHOLDS THAT CAN BUY

12.0%Refinance Originations (Bil $)Purchase Originations (Bil $)Fixed Rate Mortgage

ORIGINATION (BIL $) 30-YR FIXED RATE MORTGAGE

Mortgage Originations: 1990-2010

Source: Mortgage Bankers Association of America

• Refinance vs. Purchase

What Happened?

Trustee Sales in Anaheim Scheduled for 10/7/10

1872 W. Admiral, 92801

•3 bed, 2.5 ba, built in 1982•Purchased in Sept 2005 for $594,000 with 30% down.•In April 2006, added a second for $57,000.•In Oct 2006, refinanced the second into a new second for $100,000.•Defaulted in 2010•Zestimate of current value = $364,000.

1572 W. Orangewood, 92802

•3 bd, 2 ba, 2,016 sq ft built in 1977.•Purchased in June 2003 for $455,000 with 30% down.•March 2004: added a second for $75,000; added a third for $90,500; added a fourth for $80,000. •Within one year of purchase, the property had $565,000 in debt on it!•Defaulted in 2010.•Zestimate of current value •= $442,000.

8871 Regal, 92804

•3 bd, 2 ba, 1,314 sq ft built in 1956.•Sold for $568,000 in 2005 and went into default•Purchased as REO in 2007 for $417,000 with zero down..•Defaulted in 2010.•Zestimate of current value = $367,500.

2414 E. Underhill, 92806

•3 bd, 2 ba, 1,459 sq ft built in 1957.•Purchased for $640,000 in July 2006 with piggyback financing: $500,000 first and $140,000 second, i.e. zero down.•Defaulted in 2010.•Zestimate of current value = $387,000.

Conclusions

• Excessive borrowing against home equity is the untold part of the foreclosure story.

• “House Prices, Home Equity-Based Borrowing, and the U.S. Household Leverage Crisis” by Mian and Sufi: American Economic Review :

• 39% of new defaults from 2006 to 2008

• attributable to home equity borrowing

Understanding the Financial Crisis

Federal Issues – Critical Concerns

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

Future of Fannie and Freddie in flux - Increase

guarantee fee likely

FHA targeted for market share drop

Tax Reform on the horizon – MID?

QRM (Qualified Residential Mortgage)

20% Down – Is the future of the 30 year

mortgage in doubt?

U.S. Economic Outlook

• 2005 2006 2007 2008 2009 2010 2011f 2012f

US GDP 3.1% 2.7% 2.0% 0.0% -2.6% 2.9% 1.7% 2.0%

Nonfarm Job Growth

1.7% 1.8% 1.1% -0.6% -4.4% -0.7% 1.0% 0.9%

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

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

Real Disposable Income, % Change

1.3% 4.0% 2.2% 0.5% 0.9% 1.4% 1.7% 1.5%

Forecast Date: September 2011

California Economic Outlook

• 2005 2006 2007 2008 2009 2010 2011f 2012f

Nonfarm Job Growth

1.8% 1.7% 0.8% -1.3% -6.0% -1.4% 1.5% 2.1%

Unemployment Rate

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

Population Growth

1.2% 1.1% 1.1% 1.2% 1.1% 0.9% 0.9% 0.9%

Real Disposable Income, % Change

1.3% 3.4% 1.5% 0.1% -2.2% 1.6% 1.5% 2.0%

California Housing Market

California Sales of Existing Homes and Median Price

Housing Cycle Comparisons 1970- 2011UNITS/MEDIAN PRICE $

100,000

200,000

300,000

400,000

500,000

600,000

700,000

Sales of Existing Detached Homes Median Price

-61% -25%

Sales of Existing Detached Homes and Consumer Confidence• California, September 2011 Sales: 487,940 Units, Up 0.4% YTD, Up 4.1% YTY

100,000

200,000

300,000

400,000

500,000

600,000

700,000

Sales Consumer Confidence INDEXUNITS

SOURCE: California Association of REALTORS®; The Conference Board

*Sales are seasonally adjusted and annualized

P: May-07$594,530

T: Feb-09$245,230

-59% frompeak

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000Ja

Median Price of Existing Detached HomesCalifornia, September 2011: $287,440, Down 8.3% YTY

California’s Million-Dollar Home Sales

22,52918,621

24,43642,506

50,01054,773

36,99020,595

15,70310,658

13,1018,906

5,3663,762

2,6512,0172,5222,2982,8903,3623,7734,271

19881989199019911992199319941995199619971998199920002001200220032004200520062007200820092010

Source: DataQuick Information Systems

Number of Homes

Unsold Inventory IndexCalifornia, September 2011: 5.1 Months

MONTHS

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

$1,000K+ 11.1 9.1 10.0$750-1000K 6.8 6.2 6.1$500-750K 6.3 5.6 6.0$300-500K 5.6 5.2 5.4$0-300K 5.1 4.6 4.7

Unsold Inventory Index: Sept 2011(By Price Range: Months)

Market Breakdown: Equity v. Distressed Sales

REOs Short Sales Distressed Sales0%

Aug-10 Jul-11 Aug-11

Share of Distressed Sales to Total Sales

Tight Supply of Inventory for REO Sales

Equity Sales REO Sales Short Sales0123456789

Aug-11Unsold In-ventory Index (Months)

REO & Short Sales: Southern California(Percent of Total Sales)

Los AngelesOrange

RiversideSan

Bernardino San Diego

20%12%

35% 49%

26%14%

Aug 2011

Short SalesREO Sales

REO & Short Sales: Central Valley(Percent of Total Sales)

MaderaMerced

San BenitoSacramento

36%37%

38% 41%

23% 30%24% 19%

Aug 2011Short SalesREO Sales

REO & Short Sales: Bay Area(Percent of Total Sales)

MarinNapa

San MateoSanta Clara

SolanoSonoma

13%28%

11%10%

15% 21%

Aug 2011

Short SalesREO Sales

California Foreclosure Inventory, September 2011

SOURCE: ForeclosureRadar.com

ForeclosuresSan Diego County

SOURCE: Real Estate Research Council

San Diego• Preforeclosure: 2,251

Source: ForeclosureRadar.com as of 10/24/11

San Diego• Auction: 1,840

San Diego• Bank Owned: 754

Del Mar• Preforeclosure: 25 • Auction: 21 • Bank Owned: 5

La Jolla• Preforeclosure: 66 • Auction: 73 • Bank Owned: 19

Point Loma• Preforeclosure: 45 • Auction: 51 • Bank Owned: 23

Rancho Santa Fe• Preforeclosure: 20 • Auction: 30 • Bank Owned: 2

Murrieta• Preforeclosure: 481 • Auction: 430 • Bank Owned: 198

Temecula• Preforeclosure: 459 • Auction: 359 • Bank Owned: 143

Regional Housing Markets

San Diego CountyOctober 2011

Economic Profile

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®;The Conference Board

INDEXUNITS

Sales of Existing Detached Homes and Pacific West Consumer Confidence

San Diego County, Sept. 2011: 1,785 Units, Down 0.5% YTD, Up 6.1% YTY

Sales Consumer Confidence

Sales of Existing Detached HomesSan Diego County, 2010: 20,257 Units, Down 6.7% YTY

10,000

15,000

20,000

25,000

30,000

ANNUAL MONTHLY

Median Price of Existing Detached HomesSan Diego County, September 2011: $364,180, Down 6.3% YTY

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000J

Median Price Annual ComparisonSan Diego County, 2010: $385,740, Up 7.3% YTY

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

MONTHLYANNUAL

Median Home Sales PriceSan Diego County

SOURCE: DataQuick Information Systems. The price statistics are derived from all types of home sales -- new and existing, condos and single-family.

Aug-10 Aug-11Yearly %Change

ALPINE $417,000 $392,500 -5.9%

BONITA $475,000 $400,000 -15.8%

BONSALL $125,000 $340,000 172.0%

BORREGO SPRINGS $137,500 $91,500 -33.5%

BOULEVARD $130,000 $148,000 13.9%

CAMPO $155,000 $120,000 -22.6%

CARDIFF BY THE SEA $417,000 $737,500 76.9%

CARLSBAD $572,500 $545,000 -4.8%

CHULA VISTA $305,000 $325,000 6.6%

CORONADO $1,331,250 $1,437,500 8.0%

DEL MAR $925,000 $1,175,000 27.0%

DESCANSO $86,250 $280,000 224.6%

EL CAJON $265,000 $265,000 0.0%

Median Home Sales Price – Cont.San Diego County

ENCINITAS $680,000 $660,000 -2.9%

ESCONDIDO $305,000 $270,000 -11.5%

FALLBROOK $330,000 $340,000 3.0%

IMPERIAL BEACH $230,000 $278,000 20.9%

JAMUL $405,000 $347,500 -14.2%

JULIAN $370,000 $300,500 -18.8%

LA JOLLA $670,000 $825,000 23.1%

LA MESA $320,000 $295,000 -7.8%

LAKESIDE $290,000 $248,500 -14.3%

LEMON GROVE $242,000 $247,000 2.1%

NATIONAL CITY $182,500 $204,000 11.8%

OCEANSIDE $293,000 $282,500 -3.6%

PALA N/A $407,500 N/A

Median Home Sales Price – Cont.San Diego County

PINE VALLEY n/a $343,500 n/a

POWAY $443,500 $405,000 -8.7%

RAMONA $347,000 $277,500 -20.0%

RANCHO SANTA FE $1,532,500 $1,425,000 -7.0%

SAN DIEGO $345,000 $315,000 -8.7%

SAN MARCOS $365,000 $320,000 -12.3%

SAN YSIDRO $120,000 $106,000 -11.7%

SANTEE $342,000 $289,500 -15.4%

SOLANA BEACH $1,013,500 $760,000 -25.0%

SPRING VALLEY $261,000 $235,500 -9.8%

VALLEY CENTER $415,000 $376,500 -9.3%

VISTA $312,000 $265,500 -14.9%

SAN DIEGO COUNTY $340,000 $320,000 -5.9%

Asking Rents for Class A&B ApartmentsSan Diego County, 2011 Q3: $1,404 Up 1.7% YTY

$1,000

$1,200

$1,400

$1,600

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®; REALFACTS

Vacancy Rates for Class A&B ApartmentsSan Diego County, 2011 Q3: 4.5%

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®; REALFACTS

VACANCY RATE

San Diego

Sales of Residential Homes• San Diego, September 2011: 994 Units

• Down 13.6% MTM, Down 3.3% YTY

SOURCE: Clarus Market Metrics

Median Price of Residential Homes• San Diego, September 2011: $302,150

For Sale Properties• San Diego, September 2011: 6,565 Unit

Months Supply of Inventory • San Diego, September 2011: 4.8 Months

Del Mar

Sales of Residential Homes• Del Mar, September 2011: 24 Units

• Up 41.2% MTM, Up 33.3% YTY

Median Price of Residential Homes• Del Mar, September 2011: $872,500• Down 20.3% MTM, Down 29.6% YTY

For Sale Properties• Del Mar, September 2011: 218 Units• Down 4.0% MTM, Down 17.7% YTY

Months Supply of Inventory • Del Mar, September 2011: 8.9 Months

La Jolla

Sales of Residential Homes• La Jolla, September 2011: 46 Units

• Even 0% MTM, Up 2.2% YTY

Median Price of Residential Homes• La Jolla, September 2011: $812,500• Down 5.0% MTM, Down 18.3% YTY

For Sale Properties• La Jolla, September 2011: 596 Units• Down 3.9% MTM, Down 12.1% YTY

Months Supply of Inventory • La Jolla, September 2011: 7.7 Months

Point Loma

Sales of Residential Homes• Point Loma, September 2011: 29 Units

• Down 3.3% MTM, Up 38.1% YTY

Median Price of Residential Homes• Point Loma, September 2011: $685,000

• Up 24.5% MTM, Up 5.4% YTY

For Sale Properties• Point Loma, September 2011: 233 Units

Months Supply of Inventory • Point Loma, September 2011: 5.0 Months

Rancho Santa Fe

Sales of Residential Homes• Rancho Santa Fe, September 2011: 20 Units

• Up 33.3% MTM, Up 5.3% YTY

Median Price of Residential Homes• Rancho Santa Fe, Sept. 2011: $1,588,750

• Up 2.6% MTM, Down 30.9% YTY

For Sale Properties• Rancho Santa Fe, Sept. 2011: 401 Units

Months Supply of Inventory • Rancho Santa Fe, September 2011: 15.7 Months

Murrieta

Sales of Residential Homes• Murrieta, September 2011: 187 Units• Down 14.2% MTM, Down 13.4% YTY

Median Price of Residential Homes• Murrieta, September 2011: $237,000

• Down 1.2% MTM, Up 0.1% YTY

For Sale Properties• Murrieta, September 2011: 1,145 Units

Months Supply of Inventory • Murrieta, September 2011: 3.4 Months

Temecula

Sales of Residential Homes• Temecula, September 2011: 162 Units• Down 17.8% MTM, Down 23.2% YTY

Median Price of Residential Homes• Temecula, September 2011: $258,730

For Sale Properties• Temecula, September 2011: 942 Units

Months Supply of Inventory • Temecula, September 2011: 2.7 Months

2011 Annual Housing Market Survey

Equity vs. REO vs. Short Sales

Equity Sales REO Sales Short Sales

Share of Total Sales 58.7% 19.7% 20.2%

Median Home Price $431,000 $240,000 $287,000

Square Footage 1,783 1,500 1,600

Price / SF $250 $112 $175

Sales-to-List Price Ratio 95.9% 98.0% 95.9%

% of Sales With Multiple Offers 35.2% 58.3% 57.5%

Avg. Number of Offers 3.0 3.0 3.6

% of All Cash Sales 25.5% 34.0% 23.3%

Days on MLS 67 50 141

Days in Escrow 35 35 45

1 in 3 Sellers Sold Because They Were in Distress

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110%

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

Q. What was the single most important reason for selling/buying the property?

Net Cash to Sellers

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

$50,000

$100,000

$150,000

$200,000

$250,000

$75,000

Median

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

Proportion of Sellers Planning to Repurchase

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110%

Q. Is the seller planning on purchasing another home?

Reasons Sellers Not Planning to Buy Another Home

Q. Why is the seller not planning to purchase another home?

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

Seller is a lender/bank

Seller prefers to have less financial obligation

Poor credit background

Lack of cash for down payment

Out of work/unemployment

Decide to live with family/friends

Waiting for market to bottom

Reasons For SellingAll Home Sellers

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

Foreclosure/ShortSale/Default

Change in Family Status

Retirement/Move toRetirement Community

Investment/ TaxConsderations

Desired Better Location

Desired Smaller Home

Changed Jobs

Desired Larger Home

Q. What was the single most important reason for selling/buying the property?

Cash Sales on the Rise

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110%

% of All Sales

Investments & Second/Vacation Homes

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110%

Investment/Rental Property Vacation/Second Home

Foreign Buyers

5%6%6%

2008 2009 2010 2011

% of Foreign Buyers

Q. Was the buyer a foreign buyer?

California Housing Market Forecast

Forecast Progress Report

2010 Projected October

2010 Actual

2011 Forecast October

2011 Projected

SFH Resales (000s)

492.0 491.5 502.0 491.1

% Change -10.0% -10.1% 2.0% -0.1%Median Price ($000s)

$306.5 $303.1 $312.5 $291.0

% Change 11.5% 10.2% 2.0% -4.0%

Source: CALIFORNIA ASSOCIATION OF REALTORS®

Forecast Date: September 2011 vs October 2010

California Housing Market Outlook

2005 2006 2007 2008 2009 2010 2011f 2012f

SFH Resales (000s)

625.0 477.5 346.9 441.8 546.9 491.5 491.1 496.2

% Change 0.03% -23.6% -27.3% 27.3% 23.8% -10.1% -0.1% 1.0%

Median Price ($000s)

$522.7 $556.4 $560.3 $348.5 $275.0 $303.1 $291.0 $296.0

% Change 16.0% 6.5% 0.7% -37.8% -21.1% 10.2% -4.0% 1.7%

30-Yr FRM 5.9% 6.4% 6.3% 6.0% 5.1% 4.7% 4.5% 4.7%

1-Yr ARM 4.5% 5.5% 5.6% 5.2% 4.7% 3.5% 3.0% 3.1%

Source: CALIFORNIA ASSOCIATION OF REALTORS®

Closing Thoughts

Direction of Home Prices: Sellers Skeptical; Buyers Hopeful

Sellers Buyers0%

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

Down Flat Unsure Up

Q: Do you think home prices in your neighborhood will go up, down or stay flat in one year, five years and 10 years?

Real Estate: It’s Time To Buy Again

SOURCE: “Real estate: It’s time to buy again” Fortune Magazine’s 3/28/11 article written by Shawn Tully

“Forget stocks. Don't bet on gold. After four years of plunging home prices, the most attractive asset

class in America is housing.”

8 in 10 Americans Agree Buying a Home is the Best Investment One Can Make

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

8 in 10 Renters Would Like to Buy in the Future

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

just 24% say they rent out of choice.”

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

C.A.R. Strategic Planning Book Pics

Thank You

www.car.org.marketdata

lesliea@car.org

california housing market 2012 forecast coldwell banker san diego/inland empire october 25, 2011...

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