2013 Survey of CaliforniaHome Buyers

Survey Methodology

1,400 telephone interviews conducted in March 2013

Respondents are home buyers who purchased in previous 6 months

Maximum sampling error: ±3.5% at two standard deviations (a 95% confidence level). (Subsets of the total sample will have a higher sampling error.)

About the Buyer

53%female

63% minority

38 years old

37% single

61% college degree

2/3 household income >

$100k

Typical 2013 California Buyer

Buyer Gender Remains a Fairly Equal Male/Female Split

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130%

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

100%

36% 36% 38% 39% 43% 42% 44% 42% 41%52% 47% 47%

64% 64% 62% 61% 57% 58% 56% 58% 59%48% 53% 53%

Male Female

Average Age: 38

< 25 (3%)25-34 (22%)

35-44 (21%)

45-54 (20%)

55-64 (18%)

Q. What is your age?

Percentage of Younger Buyers Drops

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130%

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

100%

Under 25 25-34 35-44 45-5455-64 65+ Refused

Buyers Age Rises Slightly

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

5

10

15

20

25

30

35

40

45

50

Average Age Median Age

Minorities are the Majority

Q. How would you describe your ethnic background?

WhiteHispanicBlackIndianOther AsianOtherChineseKoreanFilipino

White 37%

Korean 5%

Black 8%Hispanic 26%

Filipino 4%

Indian 8%

Other 1%Chinese 4%

Other Asian 7%

Ethnic Background of Buyers Resembles CA Population

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 CA*0%

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

100%

White Black Asian/Pacific IslanderHispanic Other

*Source: U.S. Census Bureau 2011 American Community Survey

Singles Made Up 37% of Buyers in 2013

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

63%

37%

Married Single

More than Half of Buyers have College Degrees

9% 15%

16%

45%

16%

High School Some College Vocation/TechnicalCollege Grad Post Grad

Q. What is the highest level of education you have completed?

Most Buyers are Well Educated

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

0%10%20%30%40%50%60%70%80%90%

100%

High School Some College Vocation/TechnicalCollege Grad Post Grad

Nearly 2/3 of Buyers have an Annual Household Income > $100K

3%

33%

30%

19%

14%

$50-000-$74,999$75,000-$99,999$100,000-$149,999$150,000-$199,999$200,000 +

Q. Which of the following categories best represents you total annual income from all sources?

Buyers’ Annual Household Income Remains Steady

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130%

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

100%

Under $50,000 $50-000-$74,999 $75,000-$99,999$100,000-$149,999 $150,000-$199,999 $200,000 +

Q. Which of the following categories best represents you total annual income from all sources?

Residence Location

58%24%

18%

Southern CANorthern CAOther CA

Geographical Distribution of Purchases has Remained Steady

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130%

10%

20%

30%

40%

50%

60%

70%

SoCal NorCal Other CA

The Buying Experience

Median Distance from Previous Residence: 27 Miles

1-10 11-25 26-100 >1000%

5%

10%

15%

20%

25%

30%

30% 29%

16%

25%

Miles

Q. How many miles away was your previous residence from the home you bought?

Half of Buyers Were Previous Owners

Owned50%

Rented38%

Lived with Parents

6%

Live with Other Rela-tive/Friend

6%

Q. What was the living arrangement immediately before your recent home purchase?

More than 7 out of 10 1st-time Buyers Were Renters

Rented72%

Lived with Parents

14%

Military12%

Live with Other Rela-tive/Friend

3%

Q. What was the living arrangement immediately before your recent home purchase?

More Buyers Owned Previous Residence

2011 2012 20130%

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

100%

49%38%

50%

48%54% 38%

3%7% 6%

2%6%

Owned RentedLived with parents Other

DecisionFactors

Average Buyer Spent 6 Months Considering Purchase Before Contacting Agent

3-7 Weeks

8-12 Weeks

16-24 Weeks

36+ Weeks

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

26%

42%

15%

17%

Q. How many weeks did you consider buying a home before contacting a real estate agent? (Asked if agent was used)

Buyers Spending More Time Considering a Purchase Before Contacting Agent

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

3.9 3.9 4.0 3.8 3.85.6

7.28.4 8.6

16.6

12.2

23.7

Q. How many weeks did you consider buying a home before contacting a real estate agent? (Asked if agent was used)

Average Weeks

Average Buyer Investigates Homes/Neighborhoods More than 9 Months Before Contacting Agent

3-7 weeks

8-12 weeks

16+ weeks

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

26%

42%

32%

Q. How many weeks did you spend investigating homes and neighborhoods before contacting a real estate agent? (Asked if agent was used)

Buyers Spending More Time Investigating Homes & Neighborhoods Before Contacting Agent

Q. How many weeks did you spend investigating homes and neighborhoods before contacting a real estate agent? (Asked if agent was used)

Average Weeks

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

3.9 3.0 3.2 3.0 3.15.4 6.2 6.6 6.8 6.2 6.5

28.5

Average Buyer Searched for a Home for 2 Months with Agent

2 Weeks Or Less

3-7 Weeks 8-12 Weeks 14-16 Weeks 18-24 Weeks0%

34%

40%

18%

6%

Q. Once you found your agent, about how many weeks did you spend looking for a home with your agent? (Asked if agent was used)

The Home Search is Getting Lengthier

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

2

4

6

8

10

12Median Weeks

Q. Once you found your agent, about how many weeks did you spend looking for a home with your agent? (Asked if agent was used)

All Buyers Viewed at Least 8 Homes Before Buying

8 -10 11-29 20-29 30-39 40 -50

63%

12%5% 5%

14%

Average = 9 HomesMedian = 10 Homes

Q. How many different homes did you preview and visit with your agent prior to making a purchase?

Drop in Homes Viewed Reflects Tight Inventory

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

1110

910

11

1514 14

15

12

10 10

Q. How many different homes did you preview and visit with your agent prior to making a purchase?

Median

85% of Buyers Made Offers on Other Homes

0 1 2 3 4 5 6 70%

5%

10%

15%

20%

25%

30%

15%12%

9%

30%

10%13%

7%5%

Number of Offers

Q. How many offers did you make on other homes?

1/3 of Buyers Settled on Best Available Home

66%

34%

SatisfiedSelected best option given limited supply

Q. Are you satisfied with the home you purchased or do you feel like you selected the best option given the limited supply of homes?

Price Decreases Were Primary Reason for Buying

Long -term appreciation

Change in family

Desired larger home

Tired of renting

Promotion/raise

Investment/Tax advantage

Favorable price/financing

Desired better/other location

Price decreases

5%

5%

6%

7%

7%

9%

12%

10%

38%

Q. What were your main reasons for buying your home?

Buyers Didn’t Purchase Sooner Because…

48% •Not many good housing options

37% •Waited to see when prices would stabilize

28% •Difficulty qualifying for mortgage

21% •No real buying urgency

19% •Need to accumulate adequate down payment

15% •Wanted to wait until financial situation more solid

11% •Needed to sell existing home

Q. Why didn’t you buy a home sooner?

Average Buyer Plans to Keep Home for 6 Years

3 4 5 6 10 Unsure0%

5%

10%

15%

20%

25%

30%

35%

40%

Years

Q. How long do you plan to keep the property?

Most Buyers Found Home through Agent

For Sale Sign, 2%

Website, 37%

Agent, 61%

Q. How did you find the home you purchased?

More Buyers are Finding Homes Online

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

0%10%20%30%40%50%60%70%80%90%

100%Agent Website For Sale Sign Friend/Family Open House Driving Around Other

Q. How did you find the home you purchased?

Most Homes Were Listed on MLS

Yes89%

No11%

Q. Was the home you purchased listed on a multiple listing service?

Buyers Optimistic About Long Term Direction of Home Prices

Up

Flat

Unsure

1 Year 5 YearsQ Do you think home prices in the neighborhood where you purchased will go up,

down, or stay flat … in one year, in five years?

Buyer Optimism About Future Home Prices Improved

In 1 Year In 5 Years

36%

60%

20132012201120102009

Q Do you think home prices in the neighborhood where you purchased will go up in one year, in five years?

Internet Use

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013-20%

0%

20%

40%

60%

80%

100%

120%

Yes (Internet Buyers) No (Traditional Buyers)

Q. Did you use the Internet as an important part of your home-buying and selection process?

Nearly All Buyers Use the Internet

Buyers Primarily Accessed Internet by Phone

70%

15%

8%7%

Mobile/smart phoneTabletLaptopDesktop

Q. How did you primarily access the internet during the home buying process?

Multitude of Mobile Device Uses

90% •Access internet

78% •Look for comparable prices

47% •Search for homes

45% •Communicate

44% •Search websites, take photos of homes/amenities/neighborhoods

22% •Research communities/neighborhoods

11% •Create videos of homes, amenities, neighborhoods

10% •Research agents

Q. How did you use your mobile device in the home buying process?

Realtor.com & Zillow are Most Useful Websites in Buying Process

Q. What was the single most useful website that you visited during your home buying process?

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

5%

6%

7%

8%

9%

28%

30%

Brokerage

Agent

Top 3 Most Useful Websites Unchanged

2007 2008 2009 2010 2011 2012 20130%5%

10%15%20%25%30%35%40%45%50%

Zillow realtor.com Brokerage Yahoo

Most Buyers Found Home on Realtor.com or Zillow

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

4%

5%

6%

7%

7%

13%

23%

31%

Q. On which website did you find your home?

Realtor.com & Trulia Helped More Buyers Find Homes

2011 2012 20130%

5%

10%

15%

20%

25%

30%

35%Agent realtor.com BrokerageZillow Trulia Redfin

Q. On which website did you find your home?

Social Media Use on the Rise

2011 2012 20130%

10%

20%

30%

40%

50%

60%

70%

80%

52%

68%75%

Q. Did you use social media (such as Facebook, Twitter, YouTube, etc.) in your home buying process?

Social Media Used for Buying Tips & Neighborhood Info

Neighborhood amenities

Neighborhood lifestlye

Agent referrals

Agent's Facebook page

Neighborhood info from friends

Buying tips, suggestions from friends

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

19%

28%

32%

41%

42%

43%

Q. How did you use social media (such as Facebook, Twitter, YouTube, etc.) in your home buying process?

Buying Tips & Neighborhood Info Remain Popular on Social Media

2011 2012 20130%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%Buying tips Friend neighborhood comments Agents' Facebook

Agent referals from friends Agent home videos

Q. How did you use social media (such as Facebook, Twitter, YouTube, etc.) in your home buying process?

91% of Buyers are Receptive to Receiving Information via Social Media

2 3 4 5

9%

22% 20%

49%

Not Inter-ested

Extremely Receptive

Average Rating = 4.09

Q. How receptive would you be to receiving information about the home buying process directly from your real estate agent via social media? Rate how receptive

you would be on a 1-5 scale, where 1 = “not at all interested” and 5 = “extremely receptive”.

Buyers Remain Receptive to Receiving Information Via Social Media

2011 2012 20131.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.04.2 4.1 4.1

Average

Q. How receptive would you be to receiving information about the home buying process directly from your real estate agent via social media? (Scale: 1-5)

Financing

Majority Obtain Financing

2009 2010 2011 2012 20130%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%100%

94% 92%96%

91%

Q. Did you obtain financing for your home purchase?

Average Down Payment Remains Above 20%

2009 2010 2011 2012 20130%

5%

10%

15%

20%

25%

30%

35%

Average

Q. What was your down payment for the home purchased, in percent of the home value?

Most Buyers Obtain Fixed Rate Loans

Fixed 91%

Ad-justable 8%

One or more family mem-bers 1%

Q. What type of loan do you have?

Fixed Rate Loans Remain Majority

2009 2010 2011 2012 20130%

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

100%

69%79% 84%

93% 91%

31% 15%16%

7% 8%6% 1%

Fixed Adjustable Other

85% of Loans are for 30 Years

20112012

2013

0%

20%

40%

60%

80%

100%

85%87%

85%

15% 13%15%

< 30 Year 30 Year

Q. What was the duration of your loan?

Buyers Continue Having Difficulty With Financing

20092010

20112012

2013

0.01.02.03.04.05.06.07.08.09.0 8.1 8.5

8.0 8.5 8.6

Average

Q. Please rate how easy or difficult it was to obtain financing on a scale of 1 to 10 with 1 being very easy and 10 being very difficult.

Financing is Difficult to Obtain

1 2 3 4 5 6 7 8 9 100%5%

10%15%20%25%30%35%40%

2009 2010 2011 2012

Q. Please rate how easy or difficult it was to obtain financing on a scale of 1 to 10 with 1 being very easy and 10 being very difficult.

EASY DIFFICULT

Most Buyers Did Not Have Appraisal Problems

83%

12%

5%

NoneHad to get 2nd appraisalHad to find more recent comps

Q. What, if any, problems did you have with the home appraisal when attempting to obtain financing?

What Buyers Would Change About the Home Buying Experience

1. Better Communication with agent (31%)

2. Faster agent response (24%)

3. Better agent negotiation (19%)

4. Better market understanding (14%)

5. Escrow close on time (7%)

Q. If there was one thing you could change about the home buying experience, what would it be?

Buyer / Agent Relationship

Nearly All Buyers Use an Agent

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%91%

Q. Did you use a real estate agent in your home buying process?

Most Buyers Find Agents Online

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

0%10%20%30%40%50%60%70%80%90%

100%

Relationships/Contacts AdvertisingInternet Other

Q. How did you find your real estate agent?

More than 8 out of 10 Buyers Interviewed at Least 2 Agents

Q. How many agents did you interview prior to selecting the agent you used in your recent home purchase?

1 2 3 4 5+0%

5%

10%

15%

20%

25%

30%

19%

26%

12%

21% 22%

# of Agents Interviewed

Buyers Continue Interviewing Multiple Agents

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Average

Response Time is Important to Buyers in Selecting Agent

Most qualified

Most knowledgeable

Previous relationship

Distressed property knowledge

Negotiating ability

1st to respond

Most aggressive

Most reponsive

5%

4%

6%

9%

11%

17%

17%

32%

Q. What was the single most important reason for selecting the agent that you used in your recent home purchase?.

More Buyers Google their Agent

Q. Did you Google your agent…?

2007 2008 2009 2010 2011 2012 20130%

10%

20%

30%

40%

50%

60%

70%

80%

TelephoneEmail

Text MessageIn Person

17%

50%

29%

4%

51%

43%

5%

0%

Preferred Actual

Gap in Phone & Text Communication

Q. What was your preferred method of communicating with your agent?

Q. How did your agent actually communicate with you?

Room for Improvement in Agent Response Time

Instantly Within 30 mins.

Within 1 hr.

Within 2 hrs.

Within 4 hrs.

Same day 1 business day-10%

0%

10%

20%

30%

40%

50%

60%

Expected Actual

Q. What was the typical response time you expected from your agent to return any form of communication to you?

Q. On average, what was the actual response time of your agent to return any form of communication to you?

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%44%

Q. What was the typical response time you expected from your agent to return any form of communication to you?

More Buyers Expect Instant Response from Agents

Agent Satisfaction Ratings Decline- Average Ratings on 1-5 Scale -

2012 2013

Your real estate agent’s negotiating skills 3.4 3.2

Overall process of finding a home 3.4 3.2

Overall satisfaction with your real estate agent 3.4 3.1

Q. Please rate your degree of satisfaction with the following aspects of your home buying experience on a scale of 1-5, where 1 is “least satisfied” and 5 is “most satisfied”.

Buyer Satisfaction Continues Decline

2005 2006 2007 2008 2009 2010 2011 2012 20131

1.5

2

2.5

3

3.5

4

4.5

5

Process of Finding a Home Satisfaction with Agent

Q. Please rate your degree of satisfaction with the following aspects of your home buying experience on a scale of 1-5, where 1 is “least satisfied” and 5 is “most satisfied”.

Reasons for Satisfaction With Agent

Q. Why do you have that level of satisfaction with your agent?

Found best home (52%)

Worked hard (48%)

Quick to respond (37%)

Negotiated good deal (26%)

Listened to needs (19%)

Reasons for Dissatisfaction With Agent

Q. Why do you have that level of satisfaction with your agent?

Slow response (82%)

Ineffective/inefficient communication (48%)

Undesirable communication methods (43%)

Not aggressive in negotiation (47%)

Showed homes unlikely to buy (2%)

Fewer Buyers Certain they Would Work With the Same Agent Again

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

88% 87%

50%67% 61% 64% 72%

54% 60% 52%

2% 3%

4%

3% 15% 13%11%

11%12% 22%

10% 10%

46%30%

25% 22% 17%35% 28% 26%

Unsure No Yes

Q. Would you work with the same agent again?

Majority of Buyers Didn’t Rate their Agent,Yelp Was Most Popular Among those Who Did

No70%

7%

4%

4%4%

Q. Did you rate your agent on a public forum, like Yelp or Zillow?Q. (If so) On which platform did you rate your agent?

Buyers Need Most Agent Assistance in Price Negotiation

Find the right home

Determine affordability

Determine comps

Negotiate terms of sale

Price negotiation

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

39%

43%

61%

71%

86%

Q. In which part(s) of the transaction did you need the most assistance from your agent?

Advice to Agents from Buyers

Q. What advice would you give to real estate agents to improve the process or the level of service?

Respond faster (54%)

Communicate according to client preference (48%)

Gain better market direction understanding (34%)

Better communication (32%)

Be savvier about distressed properties (9%)

Have better understanding of interest rate direction (6%)

Negotiate better (6%)