1

MARKET PULSE
August 2016

Survey Methodology
Monthly online survey of more than 300 California

REALTORS.
The survey was sent via email to a random sample of
10,000 REALTORS throughout California. The
sample represented the geographical distribution of
C.A.R. membership across the state.
Respondents are asked about their last closed
transaction and business activity in their market area
for the previous month.

MARKET CONDITIONS

Floor Calls Decline

Index (>50 is positive)
80
70

Index

60

54

50
40

50

30
20
10
0

Q: Compared to last month, the number of floor calls from potential clients in your market area this month was
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

48

ListingAppointments/Client PresentationsGrowth
Continues Slowing
Index (>50 is positive)

80
70
55
53

Index

60
50
40

50

30
20
10
0

Q: Compared to last month, the number of listing appointments and presentations to clients in your
market area this month was
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

Open HouseTraffic Declines

90

Index (>50 is positive)

80
70

Index

60

58

50
40
30
20
10
0

Q: Compared to last month/year, open house traffic in your market area this month was
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

52
49

Auctions Not Prevalent in Market Place

Index (>50 is positive)

50
45
40

40

Index

35

39

35

30
25
20
15
10
5
0
Apr-14

Aug-14

Dec-14

Apr-15

Aug-15

Dec-15

Q: Compared to last month/year, the number of auctions in your market area this month was
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

Apr-16

Aug-16

All Cash PurchasesContinue to Decline

70

Index (>50 is positive)

Index

60

Index

50
40
30

39

45 43

20
10
0

Q: Compared to last month/year, the number of all cash purchases in your market area this month was
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

Affordability Becomes BiggestConcern

Decline in housing affordability

26%

Lack of Inventory

19%

Inflated home prices

18%

Slow down in economic growth

11%

Housing bubble

6.5%

Lending & financing

6.2%

Rising interest rates

4.0%

Policy & regulations

1.7%
0%

10%

Q: What is your biggest concern about the current real estate market?
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

20%

30%

10

REALTORS Remain MostConcerned

About Inventory &Affordability
Inventory

Affordability

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

Q: What is your biggest concern about the current real estate market?
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

11

REALTORS Less OptimisticAbout Market

Q: What are your expectations for market conditions over the next year?
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

May-16

Mar-16

Jan-16

52

Nov-15

Sep-15

Jul-15

May-15

Mar-15

Jan-15

Nov-14

Sep-14

Jul-14

May-14

Mar-14

58

Jul-16

90
80
70
60
50
40
30
20
10
0
Jan-14

Index

Index (>50 is positive)

51

12

Why REALTORS Expect MarketConditions to

Worsen
Harder to acquire a loan for a home purchase.
First time buyers are being continually
outbid.
Lack of affordable housing in under $1.5m.
There is a lot of uncertainty in the economy
and employment situations.
Q: Why do you expect real estate market conditions to worsen over the next year?
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

13

LASTTRANSACTION

14

More Properties Selling BelowAsking Price

Below
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

At

Over
27%
25%

34%
29%
30%
30%

48%

Q: Did your last closed transaction sell over, at or below asking price?
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

41%
36%

15

More Properties Selling BelowAsking Price

Net % of Properties Selling Below/Above Asking Price
10%
5%
0%
-5%
-10%
-15%
-20%
-25%
-30%
-35%
-40%
-45%

-2%
-12%
-21%

Q: Did your last closed transaction sell over, at or below asking price?
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

16

Premium Paid overAsking Price Increased

Average
14.0%
12.0%

10%

10.0%

8.2%

7.8%

8.0%
6.0%
4.0%
2.0%

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

Jul-16

Mar-16

Jan-16

May-16

Q: At what percentage was your last closed transaction sold over asking price?

Nov-15

Sep-15

Jul-15

May-15

Mar-15

Jan-15

Nov-14

Sep-14

Jul-14

May-14

Mar-14

Jan-14

0.0%

17

Aug-16

Jul-16

Jun-16

May-16

Apr-16

Mar-16

Feb-16

Jan-16

Dec-15

Nov-15

Oct-15

Sep-15

Aug-15

Jul-15

Jun-15

May-15

Apr-15

Mar-15

Feb-15

Jan-15

Dec-14

Nov-14

Oct-14

Sep-14

-2%

Aug-14

0%

Jul-14

% Paid BelowAsking Price Decreased

-4%
-6%
-8%
-10%
-12%

-11%

-14%
-16%
Q: At what percentage was your last closed transaction sold below asking price?
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

-12%
-14%

18

62% of Properties Received MultipleOffers

80%
70%
60%

58%

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

Q: How many offers did the seller in your last closed transaction receive?
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

66%
62%

19

Number of Offers Steady

4.0

Average

3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0

Q: How many offers did the seller in your last closed transaction receive?
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

2.8 2.8
2.4

20

More Properties Received 3+Offers than LastYear

40%
40%

Aug-15

Aug-16

37%

35%
27%

30%
25%

20%

20%

18%
14%

15%

9.5%

10%

4.5%

5%

11%
7.1%
6.4%
3.4%

0%
1

3
4
Number of Offers

Q: How many offers did the seller in your last closed transaction receive?
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

6+

21

Proportion of 3+ Offers Up From AYearAgo

100%

1-2

3+

90%

32%

80%

44%
42%

70%
60%
50%
40%
30%

68%

20%
10%
0%

Q: How many offers did the seller in your last closed transaction receive?
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

58%
56%

22

3+Offers Higher in $200k & $1M+ PriceCategories

Percentage of Properties Receiving 3+
Offers

Aug-15

Aug-16
28%

30%

24%

25%
20%

20%
13% 14%

15%
10%
5%

10%

13%

15%
12% 12%

9.3%

6.7%
4.0%

0%

Q: How many offers did the seller in your last closed transaction receive?
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

6.0%

6.0% 6.7%

23

31% of Properties Had Listing Price Reductions

35%
30%

30%

25%
20%
15%
10%
5%
0%

Q: Were there any listing price reductions before escrow opened in your last closed transaction?
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

31%
26%

24

Proportion of BuyersWhoWere Renters Decreased

60%
50%

45%

43%
39%

40%
30%
20%
10%

Q: Was the buyer of your last closed transaction a renter immediately prior to purchasing the property?
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

Jul-16

May-16

Mar-16

Jan-16

Nov-15

Sep-15

Jul-15

May-15

Mar-15

Jan-15

Nov-14

Sep-14

Jul-14

May-14

Mar-14

Jan-14

0%

25

More Sellers Became Renters

25%
20%

18%
16%

16%
15%
10%
5%

Q: Did the seller of your last closed transaction become a renter immediately after selling the property?
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

Jul-16

May-16

Mar-16

Jan-16

Nov-15

Sep-15

Jul-15

May-15

Mar-15

Jan-15

Nov-14

Sep-14

Jul-14

May-14

Mar-14

Jan-14

0%

26

Share of First-time Buyers Decreased

Long RunAverage: 32%

45%

% First-time Buyers

Long Run Average

40%

34%

35%
30%

32%

30%

25%
20%
15%
10%
5%

Q: Was the buyer of your last closed transaction a first-time buyer?

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

Jul-16

May-16

Mar-16

Jan-16

Nov-15

Sep-15

Jul-15

May-15

Mar-15

Jan-15

Nov-14

Sep-14

Jul-14

May-14

Mar-14

Jan-14

0%

27

Majority Purchases are Primary Residences

Primary residence

Investment

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Q: What was the intended/actual use of the property?

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

Vacation home

Other

28

Share of Investment Properties Decreased

Investment

Vacation home

30%
25%
20%
2.8%

15%

3.3%

10%

16%
11%

5%

Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Jun-16
Jul-16
Aug-16

0%

Q: What was the intended/actual use of the property?

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

29

Proportion of International Buyers Down

Long RunAverage: 6.2%

% International Buyers

Long Run Average

12%
10%
8%

6.8%

6%
5.1%

4%
3.5%

2%

Q: Was the buyer an international client (one who was not a citizen or permanent resident of the U.S.)?
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey

Jul-16

May-16

Mar-16

Jan-16

Nov-15

Sep-15

Jul-15

May-15

Mar-15

Jan-15

Nov-14

Sep-14

Jul-14

May-14

Mar-14

Jan-14

0%

30

Top 10 Counties of Respondents

July 2016

August 2016

Los Angeles

Los Angeles

San Diego

Riverside

Orange

San Diego

Riverside

Alameda

Sacramento

Contra Costa

Contra Costa

Sacramento

Santa Clara

San Bernardino

Alameda

Santa Clara

San Bernardino

Sonoma

10

Placer

Fresno

Q: In which county do you live?

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS Market Pulse Survey