Today's California housing market and economic outlook for 2015.

See where the market is going and where it has been. • Mortgage rates are low & lending is loosening up a bit • Affordability is still good and price gains are slowing • Foreclosure & delinquency rates are low & distressed sales are less than 10% of the market • Investors are leaving creating more opportunity for buyers needing financing • Overall homeownership rate has stabilized • International demand for housing in CA still strong • Construction is up – residential and non-residential ECONOMIC FUNDAMENTALS ARE BETTER • Economic growth is accelerating • Unemployment rate 5.9% - lowest since ? • 248,000 new jobs in Sept • Construction jobs +230,000 in last 12 months BUT...DEMOGRAPHICS AS DESTINY? • Affordability is worsening • Homeownership rate for 18-34 - year-olds still falling • Household formation is VERY slow • Census: US added 476,000 HH v. 1.3 m HH prior 2 years • Majority of new households rent: “Renter Nation” • Millennials delaying “adulthood”: Getting married later or not at all; Student loans; dim job prospects • Baby boomers delaying “retirement” and staying put longer; they will love their loans when rates do rise • Inventory is better but still well below “normal” AND… FIRST TIME BUYERS FACE MANY OBSTACLES • Lot’s of competition for existing housing stock • Affordability constraints • Lack of a down-payment • Lack of information about the home-buying process • Fear of financing: “I can’t qualify” • Job prospects/security still dim for many • Many who have jobs are under-employed. Download a free copy at http://www.scribd.com/doc/254746849/California-Housing-Market-Forecast-February-2015