California Community College Real Estate Educators' Conference, Los Angeles, CA. 2013 Real Estate Economic Forecast presented by Sara Sutachan, Senior Research Fellow, California Association of Realtors.

1. 2013 HOUSING
MARKET FORECAST
Fall 2012 Real Estate Educator’s Conference
Sara Sutachan, Senior Research Analyst
October 26, 2012

2. Recent Housing Headlines – Good News
1. NAR Aug 4.82M +9.3% YTY +7.8% MTM
2. US Aug new home sales: 372K, +25.3% YTY
3. Housing Prices on the rise
4. Mortgage rates at historic lows
5. Fed Initiates QE3 – Buying $40B/month in MBS
for as long as it takes
6. “Bakersfield shows signs of boomtown again”
(LA Times 9-9-12)

3. THE ECONOMY`

4. Gross Domestic Product: Growth is Stalling
2011: 1.7%; 2012 Q2: 1.3%, Q3: 2.0%
ANNUAL PERCENT CHANGE, CHAIN-TYPE (2005) $
8%
7% ANNUAL QTRLY
6%
5%
4%
3%
2%
1%
0%
-1%
-2%
-3%
-4%
-5%
-6% 2009 Largest Annual Drop since 1938 (-3.4%)
-7%
-8%
Q1-10
Q3-10
Q1-12
2005
2007
2009
Q1-11
Q3-11
2011
SOURCE: US Dept of Commerce, Bureau of Economic Analysis

5. Unemployment: Cyclical & Structural
Heading Down: At 3 year lows
14%
CA US
12%
10%
8%
6%
4%
2%
0%
Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
SOURCE: CA Employment Development Division

6. CA Added ~300k Jobs in Aug-11 to Aug-12
Recession Job Losses: 1.3 million
Since Jan 2010: + 485,000
90000
40000
-10000
-60000
-110000
-160000
Oct-11
Oct-08
Oct-09
Oct-10
Jul-11
Jan-12
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-12
Apr-11
Apr-08
Apr-09
Apr-10
Apr-12
SOURCE: CA Employment Development Division Month-to-Month Changes

7. Job Trends by California Metro Area
Annual Percentage Change in Nonfarm Jobs
July 2012: CA +2.6%, +365.1 thousand Jobs
Stockton 6.3%
San Francisco 4.4%
San Jose 3.5%
Fresno 3.1%
San Diego 2.9%
Sacramento 2.8%
Riverside 2.3%
Oakland 2.1%
Bakersfield 2.1%
Orange County 2.0%
Los Angeles 1.6%
Modesto 1.3%
Ventura -0.4%
-2.0% 0.0% 2.0% 4.0% 6.0% 8.0%
Source: CA EDD, Labor Market Information Division, LAEDC

8. Professional & Business Services
Leading Sector
8% Professional & Business Services
6%
4%
2%
0%
-2%
-4%
-6%
-8%
-10%
-12%
Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
SOURCE: CA Employment Development Department

9. Construction Is Making a Comeback
15% Construction
10%
5%
0%
-5%
-10%
-15%
-20%
-25%
Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
SOURCE: CA Employment Development Department

10. Manufacturing Stumbling but
Worst is Over
2% Manufacturing
0%
-2%
-4%
-6%
-8%
-10%
-12%
-14%
Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
SOURCE: CA Employment Development Department

11. Consumer Confidence –
Uneven But Things Are Getting Better
September 2012: 70.3
INDEX, 100=1985
120
100
80
60
40
20
0
SOURCE: The Conference Board

12. CPI – Subdued for Now
August 2012: All Items +1.7% YTY; Core +1.9% YTY
PERCENT CHANGE FROM A YEAR AGO
10% All Items Core
8%
6%
4%
2%
0%
-2%
-4%
Jan-05 Jan-07 Jan-09 Jan-11
SOURCE: U.S. Bureau of Labor Statistics

13. CA Negative - Equity Mortgages
Negative Equity Share in CA Near Negative Equity Share in CA
40%
35%
30% 29.0%
25%
20%
15%
10%
4.4%
5%
0%
Q4-2009
Q1-2010
Q2-2010
Q3-2010
Q4-2010
Q1-2011
Q2-2011
Q3-2011
Q4-2011
Q1-2012
Q2-2012
SOURCE: CoreLogic

14. California Borrowers: 29% Underwater
15.6% of CA mortgages over 125% LTV
US CA
10%
9%
8% 7.3% 7.1%
7%
6%
5%
4% 3.6%
3.0% 2.6%
3% 2.3% 2.0%
2% 1.2%
1%
0%
125 to 149%
225%+
110% to 114%
115% to 119%
100% to 104%
105% to 109%
120% to 124%
150% to 224%
Loan-To-Value
SOURCE: CoreLogic

15. THE LENDING
ENVIRONMENT

16. CA Housing Affordability at Record Highs
but Still Trails U.S.
% OF HOUSEHOLDS THAT CAN BUY
80% CA US
70%
60%
50%
40%
30%
20%
10%
0%
Q1 2005
Q3 2005
Q1 2006
Q3 2006
Q1 2007
Q3 2007
Q1 2008
Q3 2008
Q1 2009
Q3 2009
Q1 2010
Q3 2010
Q1 2012
Q1 2011
Q3 2011
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

17. Mortgage Rates at 50 Year Lows
But Credit is Tight: “Defensive Lending”
8%
FRM
7%
ARM
6%
Federal Funds
5%
4%
3%
2%
1%
0%
Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
SOURCE: Federal Home Loan Mortgage Corporation

18. Average Credit Score Increased 26 points
since 2005 For Purchase Loans
AVERAGE FICO PURCHASE LOANS
745
740
735
730
725
720
715
710
705
700
2005 2006 2007 2008 2009 2010 2011 2012*
SOURCE: CoreLogic *2012 through Feb

19. Fannie & Freddie are the Market
Source: LPS CoreLogic

20. THE “G” FORCES

21. Caution: Fiscal Cliff Ahead

25. State & Local Government Finances

27. Future of Fannie and Freddie?

28. U.S. Economic Outlook
Indicator 2008 2009 2010 2011 2012p 2013f
US GDP -0.30% -3.50% 3.00% 1.70% 2.00% 2.30%
Nonfarm Job Growth -0.60% -4.40% -0.70% 1.20% 1.40% 1.60%
Unemployment 5.80% 9.30% 9.60% 9.00% 8.20% 8.00%
CPI 3.80% -0.40% 1.60% 3.20% 2.00% 2.10%
Real Disposable
Income, % Change 0.50% 0.90% 1.80% 1.30% 1.60% 1.60%

29. California Economic Outlook
Indicator 2008 2009 2010 2011 2012p 2013f
Nonfarm Job Growth -1.3% -6.0% -1.1% 0.9% 1.6% 1.6%
Unemployment Rate 7.2% 11.3% 12.4% 11.7% 10.7% 9.9%
Population Growth 0.8% 0.6% 0.7% 0.7% 0.8% 0.9%
Real Disposable
Income, % Change 1.0% -3.1% 1.8% 1.5% 0.3% 1.0%

30. THE CALIFORNIA RESIDENTIAL
REAL ESTATE MARKET

31. C.A.R. Membership Off 50,000+ From Peak
1970-2011
THOUSANDS
Home Sales Membership
700,000 250,000
600,000
200,000
500,000
150,000
400,000
300,000
100,000
200,000
50,000
100,000
0 0
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010

32. Dollar Volume of Sales Slowly Improving
Up 16.5% in 2012, Up 7.0% in 2013
$ in Billion % Change
$400 20%
$ Volume of Sales Percent Change
$350 15%
$327
-54% 10%
$300
$266 5%
$250 0%
$194
$200 $178 -5%
$166
$154 $150 $150
$150 $142 -10%
-15%
$100
-20%
$50 -25%
$0 -30%
2005 2006 2007 2008 2009 2010 2011 2012p 2013f
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

33. CA Sales of Existing Detached Homes
September 2012 Sales: 484,240 Units, Up 5.6% YTD, - 1.2% YTY
UNITS
Sales
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
*Sales are seasonally adjusted and annualized

34. Share of Distressed Sales to Total Sales
(California) Sep-12
REOs, 12.3%
Short
Sales, 24.3%
Equity
Sales, 63.0%
Other Distressed
Sales (Not
Specified), 0.4%
SOURCE: California Association of REALTORS®

35. Share of Equity Sales Has Been
Trending Upward Since Early 2012
Equity Sales Short Sale REO
70%
63.0%
60%
50%
40%
30%
24.3%
20%
10% 12.3%
0%
Jan-09 Jun-09 Nov-09 Apr-10 Sep-10 Feb-11 Jul-11 Dec-11 May-12
SOURCE: California Association of REALTORS®

36. REO & Short Sales: Bay Area
(Percent of Total Sales)
100%
Sep 2012
80% Short Sales
REO Sales
60%
40%
42%
20% 18% 18% 26%
16%
10% 24%
10% 13% 18%
0% 8% 11%
7% 17%
Alameda
Contra
4% 13%
Marin
Costa Napa
San
Mateo Santa
Clara Solano
Sonoma
SOURCE: California Association of REALTORS®

37. REO & Short Sales: Southern California
(Percent of Total Sales)
100% Sep 2012
80% Short Sales
REO Sales
60%
40%
26% 34% 24%
20%
19%
10%
6% 14% 21%
0% 8%
7%
Los Angeles
Orange
Riverside
San
Bernardino San Diego
SOURCE: California Association of REALTORS®

38. REO & Short Sales: Central Valley
100% (Percent of Total Sales)
Sep 2012
80%
Short Sales
REOs
60%
40% 29%
27% 17%
35%
23%
20% 32% 34% 32%
33% 36%
23%
18% 30%
17%
0% 13%
10% 15% 20%
20%
20%
SOURCE: California Association of REALTORS®

39. CA Median Price of Existing Detached Homes
September 2012: $345,000, Up 19.5% YTY
$700,000 P: May-07
$594,530
$600,000
$500,000
T: Feb-09
$400,000 $245,230
-59% from
peak
$300,000
$200,000
$100,000
$-
Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

40. CA Unsold Inventory: Nearing Record Lows
September 2012: 3.7 Months
MONTHS
18
16
14
12
10
8
6
4
2
0
Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
Note: “Unsold Inventory Index” represents the number of months it would take to sell the remaining inventory for the month in question.
The remaining inventory for the month is defined as the number of properties that were “Active”, “Pending”, and “Contingent” (when
available) and divide the sum by the number of “Sold” properties for the month in question.
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

41. Unsold Inventory Index
Months of Supply
Price Range (Thousand) Sep-11 Aug-12 Sep-12
$1,000K+ 9.9 6.1 7.7
$750-1000K 6.1 4.0 4.7
$500-750K 6.0 3.1 3.6
$300-500K 5.4 3.0 3.3
$0-300K 4.6 2.8 3.2
Note: “Unsold Inventory Index” represents the number of months it would take to sell the remaining inventory for the month in question.
The remaining inventory for the month is defined as the number of properties that were “Active”, “Pending”, and “Contingent” (when
available) and divide the sum by the number of “Sold” properties for the month in question.
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

42. Tight Supply of Inventory, Especially for REO Sales
(California)
Sep-12
Unsold
Inventory Index 3.9
(Months) 3.8
4
3 2.2
2
1
0
Equity Sales REO Sales Short Sales
SOURCE: California Association of REALTORS®

43. Extremely Low Levels of Active Listings
at the State Level
Sep-12
Unsold Inventory Index –
Active Listing Only
(Months)
3 2.4
2
1.1 1.1
1
0
Equity Sales REO Sales Short Sales
SOURCE: California Association of REALTORS®

44. Equity Sales and Short Sales Continued to
Improved, While REO Sales Dropped
(% Change in Sales – Year to Year)
14.1%
20%
3.6%
0%
-20%
-40%
-60% -59.0%
Equity Sales Short Sales REO Sales
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

45. Inventory Remained in Short Supply
Unsold Inventory Equity Sales REO Short Sales
Index (Months)
9
8
7
6
5
4
3
2
1
0
Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

46. Low Inventory Pushing Prices Upward in
REOs & Equity Sales
Equity Sales Short Sale REO
20%
15%
10%
5%
0%
-5%
-10%
-15%
-20%
Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12
SOURCE: California Association of REALTORS®

47. Shadow Inventory

48. How do you define “Shadow Inventory”?
• Everyone defines it differently
• Bank owned?
• In foreclosure?
• Not making payments?
• Underwater?
• Urban Myth: There will be a flood of
foreclosures after the election

49. The CA Foreclosure Funnel:
8.6 Million Homes
6.8 Million Mortgages
2.07 Million Underwater
.com/CAR

50. 18,000/684,000 = 38 months of Inventory
434,000 Delinquent
180,000 in Foreclosure
70,000 Bank Owned
18,000 Distressed Sales
.com/CAR

52. California Foreclosure Filings, Sep. 2012
• NTS: 16,947, -21.0% YTD • NOD: 14,478, -18.6% YTD
Notice of Trustee Sale - Counts Notice of Defaults - Counts
70,000
60,000 6 Month Average:
NTSs: 16,669
50,000
NODs: 19,046
40,000
30,000
20,000
10,000
0
Oct-11
Oct-07
Oct-08
Oct-09
Oct-10
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jul-11
Jan-12
Jul-07
Jul-08
Jul-09
Jul-10
Jul-12
Apr-11
Apr-07
Apr-08
Apr-09
Apr-10
Apr-12
SOURCE: ForeclosureRadar.com

53. California Foreclosure Outcomes, Sep. 2012
• REO: -51.4% YTD • 3rd Party: -2.0% YTD • Cancel: -24.8% YTD
REOs Sold to 3rd Party Cancellations
6 Month Average:
30,000
REO: 4,761
25,000 3rd Party: 3,305
Cancelled: 9,868
20,000
15,000
10,000
5,000
0
Jul-11
Jul-07
Jul-08
Jul-09
Jul-10
Jul-12
Oct-11
Oct-07
Oct-08
Oct-09
Oct-10
Jan-11
Jan-07
Jan-08
Jan-09
Jan-10
Jan-12
Apr-07
Apr-08
Apr-09
Apr-10
Apr-11
Apr-12
SOURCE: ForeclosureRadar.com

54. California Foreclosure Inventories, Sep. 2012
• Preforeclosure: -20.3% YTD • Schedule for Sale: -21.0% YTD •
• Bank Owned: -28.4% YTD
Preforeclosure Scheduled for Sale Bank Owned
180,000
160,000
140,000
120,000
100,000
80,000
6 Month Average:
60,000
Preforeclosure: 91,014
40,000
Schedule for Sale: 85,022
20,000 Bank Owned: 68,690
0
Jul-07
Jul-08
Jul-09
Jul-10
Jul-11
Jul-12
Oct-11
Oct-07
Oct-08
Oct-09
Oct-10
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Apr-11
Apr-12
Apr-07
Apr-08
Apr-09
Apr-10
SOURCE: ForeclosureRadar.com

55. Los Angeles County
Preforeclosure: 13,092 • Auction: 20,458 • Bank Owned: 3,235
Source: ForeclosureRadar.com as of 10/12/12.

56. Los Angeles County
Preforeclosure: 13,092 • Auction: 20,458 • Bank Owned: 3,235
Source: ForeclosureRadar.com as of 10/12/12.

57. Los Angeles County
Preforeclosure: 13,092 • Auction: 20,458 • Bank Owned: 3,235
Source: ForeclosureRadar.com as of 10/12/12.

58. Los Angeles County
Preforeclosure: 13,092 • Auction: 20,458 • Bank Owned: 3,235
Source: ForeclosureRadar.com as of 10/12/12.

59. LENDER SATISFACTION
SURVEY

60. Overall Lender Performance Index Improving
25
23
20
15 17
16
10
5
0
2010 2011 2012
SOURCE: California Association of REALTORS®

61. Majority of REALTORS® in California Dealt with
Bank of America in Most Recent Short Sale
Transaction
Other , 14%
Citi Bank, 4%
Bank of
America, 50% JP Morgan
Chase, 14%
Wells
Fargo, 18%
Please indicate which lender/servicer you dealt with in your most
recent transaction.

62. Difficulty in Closing Improved
4%
Extremely 1 7%
Easy
7%
2 12%
12% 2011
3 17% 2012
21%
4 30%
56%
Extremely 5 34%
Difficult
0% 10% 20% 30% 40% 50% 60%
Please rate the level of ease or difficulty you had in closing this
transaction. 5 is extremely difficult, 1 is extremely easy. N=495

63. Satisfaction Levels Slightly Improved in All Categories
1.9
Your overall satisfaction with this lender 2.5
Expectations of financial contrivuations 2.4
from the seller at or after closing 3.0
Length of time to obtain 1.8
2011
approval/disapproval of the short sale… 2.2
2012
Knowledge/professionalism of the 2.4
representative you worked with 2.9
The timeliness of responses to your 2.1
inquiries 2.5
1 2 3 4 5
Very Dissatisfied Very Satisfied
With respect to your most recent transaction, please rate your satisfaction
level with the lender/servicer in the following categories.

64. Overall Satisfaction With Lender During Short
Sale Better Than a Year Ago
2012 2011
54%
60%
50%
40% 21%
30%
36% 9%
20% 9%
7%
10% 23%
0%
14% 16% 2011
Not at all 12%
Not 2012
Satisfied Neutral
Satisfied Satisfied
Extremely
Satisfied
With respect to your most recent transaction, please rate your satisfaction level with the
lender/servicer - Your overall satisfaction with this lender

65. Communications with Lenders Improving…
1.1%
Instantly 1.2%
4.1%
Within 1 Hour 6.5%
14.5%
Within 1 business day 19.4%
14.7%
Within 2 business days 16.1%
2011
12.8%
Within 3 business days 14.3% 2012
4.6%
Within 4 business days 4.9%
5.2%
Within 5 business days 7.3%
43.0%
More than 5 business days 30.4%
0% 10% 20% 30% 40% 50%
On average, what was the actual time it required for the lender's representative to n=510
return any form of communication to you?

66. …But Communication Problems with Lender
Remain Obstacles to the Transaction
2011 2012
Lender's response time to the short sale package 67%
Poor communications with lender representative 55%
Repeated requests for documentation 50%
Buyer backed out of the transaction/Long negotiations 32%
Problem with the second lien holder(s) in the short sale 23%
Problem with the appraisal 12%
Seller in the short sale transaction not responsive 11%
Lender foreclosed before the transaction completed 8%
Problems qualifying the buyer 4%
Other 17%
0% 10% 20% 30% 40% 50% 60% 70%
What were the obstacles you faced with this transaction?
(Check all that apply)

67. More REALTORS® Likely to Refer Lender to
Future Buyers than in 2011
2011 2012
7%
Very likely 11%
7%
Likely 16%
18%
Not likely 23%
60%
Not at all likely 42%
7%
Unsure 8%
0% 20% 40% 60% 80% 100%
How likely are you to refer buyers to this lender for financing on a future n=557
home purchase?

68. Still, Nearly 2/3rds Not Happy With Lender
50%
45%
40% 44%
35%
30%
25%
20%
21%
15%
10% 15%
5% 11%
8%
0%
Very Unhappy Unhappy Neutral Happy Very Happy
N=492
Overall, how did working with this lender make you feel?

69. 2012 ANNUAL HOUSING
MARKET SURVEY

70. Equity Sales vs. REO vs. Short Sales
(2012)
Equity Sales REO Sales Short Sales
Share of Total Sales 64.7% 12.3% 21.7%
Median Home Price $448,000 $185,000 $235,000
Square Footage 1,750 1,500 1,600
Price / SF $243 $116 $154
Sales-to-List Price Ratio 97.3% 100.0% 99.9%
% of Sales With Multiple Offers 50.9% 70.8% 66.1%
Avg. Number of Offers 4.0 4.2 4.3
% of All Cash Sales 27.3 43.1% 26.7%
Days on MLS 32 30 90
Days in Escrow 35 45 50

71. Equity Sales (2011 vs. 2012)
2012 2011
Share of Total Sales 64.7% 58.7%
Median Home Price $448,000 $431,000
Square Footage 1,750 1,783
Price / SF $243 $250
Sales-to-List Price Ratio 97.3% 95.9%
% of Sales With Multiple Offers 50.9% 35.2%
Avg. Number of Offers 4.0 3.0
% of All Cash Sales 27.3% 25.5%
Days on MLS 32 67
Days in Escrow 35 35

72. REO Sales (2011 vs. 2012)
2012 2011
Share of Total Sales 12.3% 19.7%
Median Home Price $185,000 $240,000
Square Footage 1,500 1,500
Price / SF $116 $112
Sales-to-List Price Ratio 100.0% 98.0%
% of Sales With Multiple Offers 70.8% 58.3%
Avg. Number of Offers 4.2 4.3
% of All Cash Sales 43.1% 34.0%
Days on MLS 30 50
Days in Escrow 45 35

73. Short Sales (2011 vs. 2012)
2012 2011
Share of Total Sales 21.7% 20.2%
Median Home Price $235,000 $287,000
Square Footage 1,600 1,600
Price / SF $154 $175
Sales-to-List Price Ratio 99.9% 95.9%
% of Sales With Multiple Offers 66.1% 57.5%
Avg. Number of Offers 4.3 3.6
% of All Cash Sales 26.7% 23.3%
Days on MLS 90 141
Days in Escrow 50 45

74. Demand for Investment & Second/ Vacation
Homes Dips Slightly, But Remains Strong
Investment/Rental Property
Vacation/Second Home
25%
20% 7%
15%
10%
5%
0%
16%

75. For Those Who Purchased
an Investment Property:
Investment to Flip
Rental Property

76. Share of International Buyers
9%
8% 7.8%
7%
6.0%
6% 5.7% 5.8%
5.3%
5%
4%
3%
2%
1%
0%
2008 2009 2010 2011 2012
Q. Was the buyer an international buyer – a person who was a citizen of another country who
wished to purchase residential real estate in the U.S.?

77. More Sellers Are Planning to Buy Another
Home As the Market Slowly Recovers
80%
70%
60%
50% 40%
40%
30%
20%
10%
0%
2005 2006 2007 2008 2009 2010 2011 2012
Q. Is the seller planning on purchasing another home?

78. For Those Who Do Not Plan to Repurchase, Here
Are Their Top 5 Reasons:
2012 2011
0% 5% 10% 15% 20% 25%
15.3%
Seller is a lender/bank
19.8%
Seller prefers to have less financial 14.4%
obligation 11.4%
8.8%
Poor credit background
10.9%
8.6%
Lack of cash for down payment
5.7%
8.1%
Decide to live with family/friends
4.7%

79. CALIFORNIA HOUSING
MARKET FORECAST

80. Forecast Report Card
2011 Projected 2012 Forecasted 2012
September 2011 2011 Actual September 2011 Projected
SFH Resales
(000s) 491.1 497.9 496.2 523.3
% Change -0.1% 1.1% 1.0% 5.1%
Median Price
($000s) $291.0 $286.0 $296.0 $317.0
% Change -4.0% -6.2% 1.7% 10.9%
Forecast Date: October 2012 vs. September 2011
Source: CALIFORNIA ASSOCIATION OF REALTORS®

81. California Housing Market Outlook
Indicator 2008 2009 2010 2011 2012p 2013f
SFH Resales (000s) 441.81 546.86 492.29 497.86 523.25 530
% Change 27.3% 23.8% -10.0% 1.1% 5.1% 1.3%
Median Price
($000s) $ 348.5 $ 275.0 $ 305.0 $ 286.0 $ 317.0 $ 335.0
% Change -37.8% -21.1% 10.9% -6.2% 10.9% 5.7%
30-Yr FRM 6.0% 5.1% 4.7% 4.5% 3.8% 4.0%
1-Yr ARM 5.2% 4.7% 3.5% 3.0% 2.8% 2.8%

82. Recovery Will Continue in 2013,
with Both Sales and the Median Price Up
Sales of Existing Detached Homes Median Price
Units Price
(Thousand) (Thousand)
700 $600
600
523.3530.0 $500
500
$400
$335
400
$300
300 $317
$200
200
$100
100
0 $0
2005 2007 2009 2011 2013f 2005 2007 2009 2011 2013f
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

83. CLOSING THOUGHTS

84. Housing Permits Improving…Slowly
2012(p): 52,000 units, Up 10.4% from 2011
Single Family Multi-Family
250,000
Household Growth: 220,000-250,000/yr
200,000
150,000
100,000
50,000
0
2005 2006 2007 2008 2009 2010 2011 2012P
SOURCE: Construction Industry Research Board

85. First-time Buyers: Rent v. Buy? Do the Math!
Buying Renting Monthly Savings Annual Savings
$5,000 $4,680
$4,000
$3,000
$2,000
$1,949
$1,000 $1,560 $390
$0
Total Monthly Housing Costs

86. For more information:
http://www.facebook.com/CARResearchgroup

87. THANK YOU!
www.car.org/marketdata
saras@car.org
@sarasutachan