CONTENTS. It s a good life!

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2 Twice a year, we produce Brian Buffini s Real Estate Report to give you a snapshot of today s market and to help you educate your clients on the process of buying or selling a home. I recommend that you lean into this piece when giving a presentation use it to help set expectations and position yourself as your clients trusted advisor. I hope you enjoy this comprehensive report and put it to use in your business. It s a good life! CONTENTS Industry Facts PAGE 1 Mortgage Stats PAGE 2 Distressed Properties PAGE 3 Price Information PAGE 3 Today s Buyer PAGE 4 First-Time Home Buyer Facts PAGE 5 Seller Stats & Trends PAGE 6 Consumer Confidence PAGE 7 Today s Real Estate Professional PAGE 8 Why Working by Referral Works PAGE Buffini & Company. All rights reserved.

3 Brian Buffini s Real Estate Report PAGE 1 INDUSTRY FACTS AVERAGE DAYS ON THE MARKET: April 2012 March 2013 April % of home sales in May were to first-time buyers In Q1 2013, the homeownership rate was 65% EXISTING HOME SALES: Midwest South Northeast West up 16.3% up 16.1% up 8.3% up 7% SUPPLY OF LISTED INVENTORY: 5.1 months in May months in May 2012 Currently, there is less than five months of inventory on the market The sales pace is where it was during the housing boom in 2005 and 2006 In 2012, housing affordability reached A median-income family would have almost twice as much of the income needed to purchase a median-priced home 80% 14 million new housing units will be needed this decade due to population growth 5.2% increase in home values from April 2012 to April 2013, the highest level since June 2004 of homeowners say their home is worth the same or more than what they paid for it In May, existing home sales reached their highest level since November From April to May, sales grew 4.2% Since 2012, home building is up 40% 44% of agents said properties were sold in less than 4 weeks (up from 30% in April 2012) In June, the number of improving housing markets increased by five to a total of 263. New additions to the list include: Salinas, CA Laredo, TX Sioux City, IA Topeka, KS Chicago, IL Baton Rouge, LA Philadelphia, PA Tallahassee, FL June is the fifth consecutive month in which the Improving Markets Index (IMI) has designated more than 70% of U.S. metros as improving SOURCES: CNBC, FANNIE MAE, HOUSINGWIRE, NATIONAL ASSOCIATION OF REALTORS, RISMEDIA, THE NEW YORK TIMES COMPANY, THE WALL STREET JOURNAL, U.S. CENSUS BUREAU

4 Brian Buffini s Real Estate Report PAGE 2 MORTGAGE STATS In June, interest rates for 30-year fixed rate loans stood at 4.15% 28% of all refinancings in Q involved shortening the amortization period Homeowners with a mortgage 50% of loans were given to applicants with credit scores above % 68% 32% 1/3 of people refinancing 30-year mortgages chose shorterterm replacement loans In March, the average down payment was 70% calculated it themselves 87% of owners have a fixed-rate mortgage Homeowners without a mortgage TYPE OF LOANS BUYERS CHOSE: How owners decided how much to spend on a home: asked a lender 22% asked an agent 49% Conventional loan 33% FHA loan 10% VA loan Of buyers, 92% chose a fixed-rate mortgage Over the last decade, interest rates have averaged between 5% and 6% WHAT BUYERS SAID ABOUT THE MORTGAGE PROCESS: 44% not difficult/no more difficult than expected 23% somewhat more difficult than expected 17% easier than expected 37% of households use more than 30% of their income for housing 18% use more than 50% of their income for housing SOURCES: ELLIE MAE, FANNIE MAE, NATIONAL ASSOCIATION OF REALTORS, REUTERS,THE WASHINGTON POST, U.S. CENSUS BUREAU

5 Brian Buffini s Real Estate Report PAGE 3 DISTRESSED PROPERTIES AVERAGE TIME ON MARKET: Short sales 73 Days OF ALL SALES, FORECLOSURES ACCOUNTED FOR: 25% 21% Q Q Non-distressed properties 44 Days Foreclosed properties 43 Days DISTRESSED PROPERTIES WERE PURCHASED BY: STATES WITH THE LARGEST PERCENTAGE OF FORECLOSURE SALES: Compared with a year earlier, short sales fell 35% in Q % of home sales in May were distressed 37% investors 17% first-time buyers 13% repeat buyers PRICE INFORMATION STATES WITH THE HIGHEST HOME APPRECIATION: Hawaii Nevada California Arizona Oregon 86% of agents report constant or increasing prices in their markets 95% of agents expect prices to increase over the next 12 months 51% of consumers expect home prices to rise within the next year In May, the median sales price for existing homes of all types was $208,000 (up 15.4% from May 2012) In Q2 2013, median home prices were up in 100 of 148 markets In Q1 2013, foreclosure prices increased 28% MEDIAN SINGLE-FAMILY HOME PRICES: New Homes Existing Homes Michigan 28% California 30% Arizona 28% Illinois 32% Georgia 35% 2013 (as of April) SOURCES: BUSINESS INSIDER, INC., CNNMONEY, FANNIE MAE, NATIONAL ASSOCIATION OF HOME BUILDERS, NATIONAL ASSOCIATION OF REALTORS, THE WALL STREET SOURCES: JOURNAL??

6 Brian Buffini s Real Estate Report PAGE 4 TODAY S BUYER 89% Until the 30-year fixed rate mortgage hits 10.5%, buying will be cheaper than renting POPULAR BUYER MISCONCEPTIONS: of buyers used an agent or broker considering today s home prices and rental costs 90% of buyers look for a home online first 24% 73% of agents said their clients faced multiple offers 96% of agents said that common challenges for buyers now are low inventory and multiple offers % 37% would give up an updated kitchen or walk-in closet 85% OF POTENTIAL BUYERS WOULD MAKE THESE COMPROMISES TO CLOSE ON A HOME: 50% would be flexible on the closing date would buy the home as-is 29% would pay more SOURCES: CNNMONEY, HOUSINGWIRE, NATIONAL ASSOCIATION OF REALTORS, TRULIA Once I m pre-approved, I have to close with that loan. 24% My current bank will give the best rates so I shouldn t shop around for a better rate. 11 MILES from previous residence would give up a pool would give up a finished basement 24% MEDIAN HOME PURCHASED: BUYERS FLEXIBLE WISH LISTS: 50+% It isn t possible to get a mortgage for less than 5% down. 24% Built in 1992 On average, a buyer searched for 12 weeks and viewed 10 homes 11 MILE

7 Brian Buffini s Real Estate Report PAGE 5 FIRST-TIME HOME BUYER FACTS More than 80 million millenials in the US will make up the next generation of first-time homeowners 65% of first-time buyers would consider buying a foreclosure TOP SOURCES OF DOWN PAYMENT: 40% Savings In April 2013, first-time home buyers comprised 29% of all residential buyers FIRST-TIME HOME BUYER PREFERENCES: 77% technological capabilities 69% an open layout in the kitchen and family rooms 30% a fixer upper over a house with minimal repairs needed HOME FEATURES THAT ARE IMPORTANT TO MILLENNIALS: Gift from family or friend First-time buyers are most likely to compromise on the size and price of a home but least likely to compromise on distance from and quality of schools TO PURCHASE A HOME, FIRST-TIME BUYERS WOULD CUT SPENDING ON: 84% storage 76% space for TV 73% entry of the home 63% outdoor living space 36% ability to conduct Luxury items Entertainment Clothes business from home SOURCES: BLOOMBERG, NATIONAL ASSOCIATION OF REALTORS, PULTEGROUP, INC., RISMEDIA, U.S. NEWS & WORLD REPORT 401k or pension fund of renters qualified to buy a median priced home in 2012 of working renters spend at least half of their income on housing 96% of first-time buyers financed their purchase with a mortgage