1. State of the California Housing Market
Recovery or ….?

2. Discussion Points
• National Economic Picture
• California Market Update
• Recovery, Yes, But…?
• Expectations Next Six to Twelve
Months

3. Mortgage Interest Rates

4. Mortgage Interest Rates
1.0
2.0
3.0
4.0
5.0
6.0
7.0
InterestRates
10-Year Treasury Note Yields and 30-Year Mortgage Interest Rate
July 2007 through July 1, 2013
10-Year Treasury Yields
30-Year Mortgage Interest Rates
Source: Federal Reserve, Freddie Mac, Wells Fargo
Mortgage
June 19, 2013
Bernanke comments
cause mortgage
interest rates to spike
53 basis points.

5. $500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
FederalReserveBankAssets
Federal Reserve, Total Assets (Millions of $)
January 2003 through July 1, 2013
As a result of QEs, Federal
Reserve Bank Assets have
mushroomed from $800
billion to $3.5 trillion
Mortgage Interest Rates

6. Federal Reserve Policy
Bernanke Has Your Back…
Q & A: Members of House Financial Services Committee, July 18, 2013

7. Where are we in this
housing recovery cycle?

8. Where are we in this
housing recovery cycle?

9. Where are we in this
housing recovery cycle?
3,000,000
3,500,000
4,000,000
4,500,000
5,000,000
5,500,000
6,000,000
6,500,000
7,000,000
7,500,000
8,000,000
8,500,000
9,000,000
UnitsSold
Total New and Existing Home Sales -
May 1999 through May 2013

10. Median Prices up sharply in 2012
and YTD 2013
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
$550,000
$600,000
CaliforniaMedianHomePrice($)
California Median Prices - Single Family Home
June 2001 through June 2013
Source: PropertyRadar.com

11. Inventory at or near record lows
Source: California Association of Realtors – CAR.org
0
2
4
6
8
10
12
14
16
18
20
MonthsofUnsoldInventory
California Unsold Inventory Index (Months of Available
Inventory) January 1990 to May 2013

12. Source: ForeclosureRadar – www.foreclosureradar.com
Foreclosure activity slowing…
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
ForeclosureNoticesorSales
Foreclosure Activity
May 2007 through May 2013
Notice of Default
Notice of Trustee Sale
Foreclosure Sales

13. Time to foreclose lengthening
Average Time to Foreclose
300+ Days

14. Government intervention

15. California home building permits
on the rise
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
NumberofPermits
California Total Single Family Home Construction Permits
January through May, 2000 through 2013

16. Housing Market Recovery?

17. Housing Recovery Dependent on
Jobs and Income
Rising Employment
Rising Incomes

18. California employment on the rise
11,500
12,000
12,500
13,000
13,500
14,000
14,500
15,000
15,500
NumberofEmployees
Monthly California Employment Trends (thousands of employees)
January 1990 to May 2013

19. San Diego employment rising at a faster clip
1,320,000
1,340,000
1,360,000
1,380,000
1,400,000
1,420,000
1,440,000
1,460,000
1,480,000
1,500,000
NumberofEmployees
Employment Trends - San Diego - Carlsbad - San Marcos Metro Area
2003 to 2013
Source: BLS.gov

20. California personal income
gaining ground
$900,000
$1,000,000
$1,100,000
$1,200,000
$1,300,000
$1,400,000
$1,500,000
$1,600,000
$1,700,000
$1,800,000
PersonalIncome(Millionsof$)
California Total Personal Income (Mllions of $)
Q1 1999 through Q1 2013

21. What should a housing recovery
look like?
Rising Prices
Increase in Market Activity
Increase in Building Activity

22. Market Activity Slows…
0
10,000
20,000
30,000
40,000
50,000
60,000
SalesVolume
Monthly Trend of California Real Estate Sales
Distressed vs. Non-Distressed Sales
February 2006 to June 2013
Distressed Sales
Non-Distressed Sales
Source: PropertyRadar.com

23. Sales volume down 5.9% in June
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
SalesVolume
California Total Single Family Home and Condominium Sales
January to June Year-to-Date Sales Comparisons
2005 through 2013
Distressed Sales
Non-Distressed Sales
Year-to-Date
Jan-June sales nearly down
5.9 percent Y-o-Y

24. What about San Diego County……?
Source: PropertyRadar.com
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
SalesVolume
Monthly Trend of San Diego Real Estate Sales
Distressed vs. Non-Distressed Sales
February 2006 to June 2013
Distressed Sales
Non-Distressed Sales
Source: PropertyRadar.com

25. What about San Diego County……?
Source: PropertyRadar.com
0
5,000
10,000
15,000
20,000
25,000
30,000
SalesVolume
San Diego County Total Single Family Home and Condominium Sales
January to June Year-to-Date Sales Comparisons
2005 through 2013
Distressed Sales
Non-Distressed Sales
Year-to-Date
Jan-June sales up in San
Diego County

26. What a difference a year makes!
Source: PropertyRadar.com
Distressed Property Sales as a % of
Total Sales
County Q2-11 Q2-12 Q2-13
San Diego 51.8% 47.2% 27.1%
Contra Costa 60.9% 54.5% 29.8%
Riverside 62.8% 55.7% 37.2%
Sacramento 68.1% 61.7% 38.2%
San Bernardino 68.7% 61.5% 42.1%

27. Negative Equity on the Decline
Homeowner equity critical
to housing recovery

28. Negative equity on the decline
Source: CoreLogic – www.corelogic.com
24%
28%
32%
36%
NegativeEquityShare(%)
California Negative Equity (%)
Q4 2009 to Q4 2012

29. Negative Equity - California

30. Negative Equity - California
0
200
400
600
800
1,000
1,200
5% 10% 15% 20% 25%
NumberofCaliforniaHomeowners(inThousands)
Increase In California Home Prices
Number of California Homeowners
that Exit Negative Equity Positions
Approximately 500,000
California homeowners
exit their negative equity
positions if home prices
go up 10%
Approximately 900,000
California homeowners exit
their negative equity
positions if home prices go
up 20%
Source: PropertyRadar.com

31. Negative Equity – San Diego

32. The Answer to the California
Housing Market Recovery
Question?
Yes, but….
Recovery?

33. Recovery? Yes, but…

34. Expectations
Next 6 to 12 Months

35. Demand will remain strong
• Despite jawboning by the Fed, QE 3 will likely
continue at current levels well into 2014
• In many parts of CA rents higher than house
payments
• Many early foreclosure “victims” now qualify
for a mortgage and are choosing to buy

36. Supply will remain tight
• Government intervention will continue to slow
foreclosures, ie. CA Homeowner’s Bill of Rights
• Many homeowners with equity waiting for higher
prices
• Nearly 2 million underwater homeowners can’t
buy or sell (except short)
• New home supply lagging demand
• Lack of REO inventory
• Short sales CA hampered by legislative
uncertainty

37. Home prices will rise
• Lack of supply, and continued demand will put
upward pressure on prices
• But increases will be constrained:
– Interest rate volatility
– By credit terms
– By appraisals
– By affordability and ROI

38. PropertyRadar
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www.propertyradar.com

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41. Start with Explore Mode

42. Negative equity in Escondido, CA

43. …..compared to Carlsbad

44. View “Ownership” heat map, Escondido,CA

45. View “Turnover” heat map

46. View “Debt” heat map, Escondido, CA

47. Find properties in foreclosure with “Foreclosures” heat map,
Escondido, CA

48. View a property with the click of a button

49. View transaction history using public record data

50. Move to Property Search Mode

51. Select search criteria

52. Choose search criteria

53. Refine search criteria

54. Further refine search criteria

55. View search results

56. Export search results

57. View Property Details
$550,000

58. Find owner via linked in or…?
$550,000

59. View transaction history
$550,000

60. – Farm for short sale opportunities
– Locate and mail to renters who may
eventually become buyers
– Locate and mail to landlords who might
want to sell
– Locate older homeowners who have
owned homes for years, free and clear.
– Locate small older homes on large lots
Other opportunities to find inventory

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Search Criteria!

62. What’s Available Now
What’s Coming Soon
Available Now
Coming Soon

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64. California Property Report
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