REAL ESTATE REPORT 3RD QUARTER 2015 SOURCES: BUFFINI & COMPANY,

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1 REAL ESTATE REPORT 3RD QUARTER 2015 SOURCES: BUFFINI & COMPANY,

2 INDUSTRY FACTS MEDIAN DAYS ON THE MARKET: 39 Days in April 2015 vs. Home sales in April reached a seasonally adjusted rate of 5.04 million, an increase of 6.1% from April The total housing inventory at the end of April increased by 10%, resulting in 2.21 million existing homes available for sale. 48 Days in April % of homes sold in April were on the market for less than a month. Low interest rates and the stability of the job market are moving buyers off the fence. The home ownership rate is 64.3%. Existing home sales are 82% back to normal. New construction starts are 53% back to normal, up from 46% a year ago. EXISTING HOME SALES BY REGION: Northeast: Existing home sales declined 3.1% to an annual rate of 620,000. Midwest: Existing home sales increased 1.7% to an annual rate of 1.22 million. South: Existing home sales declined 6.8% to an annual rate of 2.04 million. West: Existing home sales increased 1.7% in to an annual rate of 1.16 million. In the next 12 months, 40% of Americans say that the homes in their neighborhood will be worth more, 37% say they ll remain the same, 15% aren t sure and 8% say they ll be worth less. 63% of Americans say they would buy if they were going to move today Texas 2. Florida 3. California 4. North Carolina % of Americans say that now is a good time to buy; 46% say that it s a good time to sell. TOP 10 STATES FOR NEW HOMES SALES IN Georgia 6. Colorado 7. Washington 8. Arizona Virginia 10. South Carolina Home sales in 2015 are expected to reach their highest level in two years. SOURCES: NATIONAL ASSOCIATION OF REALTORS, NATIONAL ASSOCIATION OF HOME BUILDERS, TRULIA, BUILDER MAGAZINE, FANNIE MAE

3 MORTGAGE STATS 12% of buyers thought that saving for a down payment was difficult. COMMON SAVINGS OBSTACLES: 52% 48% Student loans. 44% Credit card debt. 36% Car loans. of Americans say that mortgage rates will go up in the next 12 months. 52% of Americans say that it would be difficult to get a mortgage today, while 46% say it would be easy. Buyers typically financed 90% of their home purchase. 95% of first-time buyers financed their home purchase, while 84% of repeat buyers did the same. 92% 26% of borrowers chose a fixed-rate mortgage. of buyers say that the mortgage application and approval process were somewhat more difficult than expected. TYPE OF LOANS BUYERS CHOSE: AMONG REPEAT BUYERS: 61% Conventional 22% FHA 12% VA 48% Conventional 35% FHA 9% VA AMONG FIRST-TIME BUYERS: 69% Conventional 15% FHA 13% VA 44% of Millennials think it will be difficult to qualify for a mortgage. 88% of buyers financed their home purchase, including 97% of Gen Y. Top 3 Sources of Down Payments 1. Savings 2. Sale of a primary residence 3. Gift from family/friend SOURCES: NATIONAL ASSOCIATION OF REALTORS, FANNIE MAE, NATIONAL ASSOCIATION OF HOME BUILDERS

4 DISTRESSED PROPERTIES AVERAGE TIME ON MARKET: Short sales 180 days Non-distressed properties 38 days Foreclosed properties 50 days DISTRESSED PROPERTY AS PERCENTAGE OF ALL SALES: 10% April 2015 vs. 15% April 2014 The housing market is sounder than it has been in a decade: The number of homes in foreclosure each quarter is down to pre-crisis levels of 2005 and PRICE INFORMATION Home prices rose 5.7% on a 12-month seasonally adjusted basis in April the 56th consecutive month of yearover-year growth. The median existing home price for all housing types in April was $160,802, up 5.7% through the beginning of % of Americans say that home prices will stay the same over the next 12 months. Foreclosures sold for an average discount of 20% below market value in April Experts predict that existing home prices will increase 3% in 2015 and 2% in Although home prices are increasing, they re doing so at the slowest pace in two years. Home prices are 82% back to normal, up from 66% a year ago. SOURCES: NATIONAL ASSOCIATION OF REALTORS, BLOOMBERG, TRULIA, NATIONAL ASSOCIATION OF HOME BUILDERS, FANNIE MAE, U.S. CENSUS BUREAU

5 TODAY S BUYER GENERATIONAL TRENDS: of buyers Gen X. 32% are Gen Y. 27% 31% Baby Boomers. 10% Silent Generation. Half of buyers begin their formal home search 6 to 12 months before buying; 3/4 start a year ahead. The median household income of buyers was $84,500. Among first-time buyers, it was $68,300. Among repeat buyers, it was $95, % of home buyers bought due to a desire to own a home. 9% purchased a home due to a job-related relocation. 8% purchased a home to be in a better area or due to a change in their family situation. 92% of buyers used the Internet in some way during their home search, with 50% of buyers using a mobile website or application. All generations looked online for properties first before contacting a real estate agent; however, the younger the buyer, the more likely they were to look online. 31% of Gen Y and 26% of Gen X buyers found the home they purchased through their mobile device. Buyers expect to live in their homes for 12 years. Younger buyers are more likely to purchase an older or previously owned home, while Baby Boomers are more likely to buy a new home. Younger buyers prefer an agent to communicate via and text, whereas older buyers prefer a phone call. The typical buyer searched for 10 weeks and viewed 10 homes during their search. SOURCE: NATIONAL ASSOCIATION OF REALTORS, THINK WITH GOOGLE

6 FIRST-TIME HOME BUYER FACTS 68% of Gen Y are first-time home buyers. 30% of buyers in March 2015 were first-time buyers. 85% of experts predict, the median age of first-time home buyers will rise to 32 or older in the next decade. FIRST-TIME HOME BUYERS (BY REGION): 41% Northeast 36% Midwest 30% South 32% West 54% of first-time buyers were married. 18% were single females. 11% were single males. 15% were unmarried couples. 75% rented an apartment or house before buying a home. 19% lived with parents, relatives or friends. The median age of first-time buyers in 2013 was 31. SOURCES: NATIONAL ASSOCIATION OF REALTORS, ZILLOW

7 SELLER STATS & TRENDS Gen X comprised the largest share 27% of home sellers, followed by older Baby Boomers (23%) and younger Baby Boomers (20%). 16% Younger sellers are more likely to sell to upgrade to a larger home or for a job relocation. Older sellers want to downsize in retirement or to be closer to friends and family. of sellers wanted to sell their homes earlier but waited because their homes were worth less than the mortgage. 36% of sellers offered incentives to attract buyers, including home warranty policies and closing costs. SOURCES: NATIONAL ASSOCIATION OF REALTORS SELLERS UPGRADED: 40% of sellers bought a home larger than their current one. 47% purchased a more expensive home. 53% purchased a newer home. 45% of sellers reduced the initial asking price at least once. Sellers lived in their homes for 10 years. This is up from 6 years in Sellers sold their homes for an average of 97% of the listing price.

8 CONSUMER CONFIDENCE 51% of Americans plan to buy a home within the next 5 years, including 61% of Millennials, 28% of Gen X and 10% of Baby Boomers. 75% of Millennials say that homeownership is an important long-term goal. REASONS RENTERS DON T BUY: 56% Insufficient savings or too much debt. 53% Don t earn enough. 53% of buyers undertook a home improvement project within 3 months of buying, spending an average of $4,550 on improvement projects. The kitchen was the most common space to improve. 73% of Millennials say that homeownership is an excellent investment. ARE RENTAL PRICES GOING UP? 54% of Americans say that home rental prices will increase in the next 12 months. 38% say they ll stay the same. REASONS FOR MOVING: 11.7% of people moved between 2012 and 2013: 48% moved for housing-related reasons (foreclosure, wanted to move to a better neighborhood, wanted to buy a home, wanted a better home, etc.). 30.3% moved for family-related reasons (change in marital status, establish own household, etc.). 19.4% moved for employment-related reasons (retired, looking for work, to be closer to work, new job/transfer). 2.3% moved for other reasons (natural disaster, change of climate, health, attend or leave college, etc.). 41% Credit isn t good enough. 3% say they ll go down. FOR MOST AMERICANS, THEIR FINANCIAL SITUATIONS ARE STABLE: 45% of Americans expect their personal financial situation to get better over the next 12 months. 44% expect it to stay the same. 10% expect it to get worse. 62% say that their household income is the same as it was 12 months ago. 24% 12% say that it s significantly higher. say it s significantly lower. SOURCES: BUILDER MAGAZINE, NATIONAL ASSOCIATION OF REALTORS, NATIONAL ASSOCIATION OF HOME BUILDERS, U.S. CENSUS BUREAU, WALL STREET JOURNAL, FANNIE MAE

9 BUYERS AND THE INTERNET Google searches for real estate listings peak in July. This year, they reached their highest point since Half of all Millennials visited real estate websites in July, 36% visited real estate websites or apps on mobile devices. People who search for real estate listings are 5 times more likely to search about planning for retirement and 4 times more likely to search about finding child care. Millennials are twice as likely as the average person to look at real estate information on a mobile device. House hunters used their mobile device most to search for listings and find directions while out looking for a home. PEOPLE USE THEIR MOBILE DEVICE TO: Search for listings. Find directions to a home. Look for more information on a listing. Call or an agent directly. Watch video tours while out looking for a home. One-quarter of Google searches for mortgages have been on mobile devices, with mortgage calculator making up half of the searches year olds were twice as likely as year olds to say that they re planning to buy a home in the next year. 83% of year olds said that they would start their formal home search more than 6 months in advance, compared to 73% of people older than 35. SOURCE: THINK WITH GOOGLE

10 TODAY S REAL ESTATE PROFESSIONAL The average real estate professional has 12 years of experience. 65% 12% of agents have a website. 84% of real estate professionals are very certain they ll be active in real estate in the next two years. AGENTS PREFERRED METHOD OF COMMUNICATION WITH: of agents have a real estate blog. Current Clients Past Clients Potential Clients THE MEDIAN NUMBER OF TRANSACTIONS of agents use social BY EXPERIENCE: 93% 67% 63% 65% media or a professional networking website. 2 years or less: 3 transactions. 91% Telephone 57% Telephone 57% Telephone 3 to 5 years: 10 transactions. 85% Text messaging 42% Text messaging 41% Postal mail 6 to 15 years: 12 transactions. 16 years or more: 13 transactions. WHAT DO SELLERS WANT MOST FROM THEIR AGENTS? 23% Market home to potential buyers. 20% Sell the home within specific time frame. 19% Price home competitively. 14% Find a buyer for home. 13% Find ways to fix up home to sell it for more. WHAT DO BUYERS WANT MOST FROM THEIR AGENTS? 53% Find the right home to purchase. 12% Negotiate the terms of sale. 11% Handle the price negotiations. 8% Determine what comparable homes were selling for. 6% Handle the paperwork. SOURCES: NATIONAL ASSOCIATION OF REALTORS, BUFFINI & COMPANY, RISMEDIA

11 WHY I WORK BY REFERRAL Studies show that 82% of real estate sales are the result of agent contacts from previous clients, referrals, friends, family and personal clients. 88% of buyers would use their agent again or refer them to others. RELATIONSHIPS ARE MORE IMPORTANT THAN TRANSACTIONS. You may have noticed that many real estate agents take a transactional approach to sales identifying clients, closing the deal, and then moving on to the next one. I choose not to work that way because I believe you deserve more from the professional you decide to work with. That s why I work by referral. Since my primary source of new business is referrals from people who know and trust me, I don t have to spend time prospecting and promoting myself. I can dedicate myself fully to the activities that benefit you most and always deliver truly exceptional service. Working by referral is all about trust. And, let s face it, when we re seeking a service, we look for someone we can trust someone proven, who comes highly recommended and is already on our side. YOU CONTROL MY BUSINESS. I know that I must earn your future referrals, so I aim to exceed your expectations. I have a vested interest in making sure that you are completely satisfied at the end of our transaction together. I want you to be so fired-up that you can t wait to tell your friends and family about me and the fantastic service you received! When you come across an opportunity, I d appreciate you referring me to great people like yourself, who would benefit from the excellent service and personal attention I provide. There is no lead more powerful than one referred from someone you know someone who knows you, trusts you and will put their name to you. Craig West SERVICE THAT CONTINUES AFTER THE SALE. I devote myself to serving the needs of my clients before, during and after each sale. Instead of disappearing after the closing, you can expect me to keep in touch. I will send you valuable information each month, and will also call from time to time just to check in and see if you need anything. SOURCES: NATIONAL ASSOCIATION OF REALTORS