1.
2016 ECONOMIC AND
HOUSING MARKET
FORECAST
April 22, 2016
CA Community College Real Estate Education Center
OscarWei, Senior Economist of C.A.R.

2.
OVERVIEW
• Economic Outlook
• California Housing Market Outlook
• Regional Housing Market Outlook
• 2016 Forecast

3.
ECONOMIC OUTLOOK

4.
MACRO ECONOMY SUMMARY
1.4%
GDP 2015-Q4
1.9%
Job Growth
2016-02
5.0%
Unemployment
2016-03
2.2%
Consumption
2015-Q4

5.
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
2005
2007
2009
2011
2013
2015
Q2-11
Q4-11
Q2-12
Q4-12
Q2-13
Q4-13
Q2-14
Q4-14
Q2-15
Q4-15
US GDP: AT RISK FROM WEAK GLOBAL GROWTH?
2015: 2.4%; 2015 Q4: 1.4%; 2016 (F): 2.7%
ANNUAL PERCENT CHANGE, CHAIN-TYPE (2005) $
ANNUALLY QUARTERLY
2009 Largest Annual Drop since 1938 (-3.4%)
SERIES: GDP
SOURCE: US Dept. of Commerce, Bureau of Economic Analysis

6.
PROGRESS CONTINUES, UNIMPRESSIVELY
10,000
11,000
12,000
13,000
14,000
15,000
16,000
17,000
18,000
19,000
Q1-00
Q1-01
Q1-02
Q1-03
Q1-04
Q1-05
Q1-06
Q1-07
Q1-08
Q1-09
Q1-10
Q1-11
Q1-12
Q1-13
Q1-14
Q1-15
$Billions
Actual Trend
SERIES: U.S. Real Gross Domestic Product (GDP)
SOURCE: U.S. Bureau of Economic Analysis
24 Consecutive quarters of yty growth, but still below long-run trend

7.
UNEMPLOYMENT RATES AT 8-YEAR LOWS
US 5.0% (Mar 2016), CA 5.4% (Mar 2016)
0%
2%
4%
6%
8%
10%
12%
14%
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
CA US
SERIES: Unemployment Rate
SOURCE: US Bureau of Labor Statistics, CA Employment Development Division

8.
EMPLOYMENTGROWTH, CALIFORNIAVS. U.S.
2.6%
2.0%
-8
-6
-4
-2
0
2
4
6
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
California US
ANNUAL PERCENTCHANGE
SERIES:Total Nonfarm Employment
SOURCE: US Bureau of Labor Statistics, CA Employment Development Division

9.
JOBTRENDS BY CALIFORNIA METRO AREA
1.0%
1.4%
2.0%
2.2%
2.3%
2.4%
2.6%
2.9%
3.1%
3.2%
3.3%
3.5%
3.7%
0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0%
Ventura
Bakersfield
Los Angeles
San Luis Obispo
Oakland
Sacramento
San Diego
Orange County
Fresno MSA
Modesto
Inland Empire
San Jose/Santa Clara
Stockton MSA
SERIES:Total Nonfarm Employment
SOURCE: CA Employment Development Division
ANNUAL PERCENTCHANGE
March 2016: CA +2.6%, +420,800

10.
UNEMPLOYMENT RATE BY CALIFORNIA METRO AREA
3.2%
3.9%
4.0%
4.4%
4.7%
5.0%
5.0%
5.4%
5.8%
8.8%
9.6%
10.6%
11.6%
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0%
San Francisco
Orange County
San Diego
Ventura
Inland Empire
Modesto
Bakersfield
SERIES:Total Nonfarm Employment
SOURCE: CA Employment Development Division
ANNUAL PERCENTCHANGE
March 2016: California 5.4%

11.
OIL’S DRAG COMINGTO CLOSE? MAYBE…
Dollars per Barrel
$0
$20
$40
$60
$80
$100
$120
$140
$160
Mar-06
Nov-06
Jul-07
Mar-08
Nov-08
Jul-09
Mar-10
Nov-10
Jul-11
Mar-12
Nov-12
Jul-13
Mar-14
Nov-14
Jul-15
Mar-16
SERIES: Crude Oil Prices: West Texas Intermediate
SOURCE: U.S. Energy Information Administration
3rd Week of March: $38.32; 5th consecutive week of growth
74%
Drop

12.
CONSUMER CONFIDENCE INDEX
March 2016: 96.2
0
20
40
60
80
100
120
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
INDEX, 100=1985
SERIES:Consumer Confidence
SOURCE: The Conference Board

13.
MORTGAGE RATES LOWER NOWTHAN 2015
January 2009 – March 2016
0%
1%
2%
3%
4%
5%
6%
2009/01
2009/07
2010/01
2010/07
2011/01
2011/07
2012/01
2012/07
2013/01
2013/07
2014/01
2014/07
2015/01
2015/07
2016/01
11.26.15
01.07.16
02.18.16
FRM
MONTHLY WEEKLY
SERIES: 30Yr FRM, 5Yr ARM
SOURCE: Freddie Mac

14.
WHEREAREWEHEADED?
- Fed takes a more dovish tone, leave interest rates unchanged,
will gradually increase rates in 2016 and 2017. Action will be
“data determined”
- Risk of rates increasing too fast: bringing economic growth to
a halt
- Risk of rates increasing too slow: zero leverage when next
downturn hits

15.
U.S. ECONOMIC OUTLOOK
2010 2011 2012 2013 2014 2015 2016f
US GDP 2.4% 1.8% 2.3% 2.2% 2.4% 2.4% 2.7%
Nonfarm Job Growth -0.7% 1.2% 1.7% 1.7% 1.9% 2.1% 1.8%
Unemployment 9.6% 8.9% 8.1% 7.4% 6.2% 5.3% 5.0%
CPI 1.6% 3.1% 2.1% 1.5% 1.6% 0.1% 2.1%
Real Disposable
Income, % Change 1.0% 2.5% 3.1% -1.4% 2.7% 3.5% 2.7%
30-Yr FRM 4.7% 4.5% 3.7% 4.0% 4.2% 3.9% 4.5%
SERIES: U.S. Economic Outlook
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

16.
CALIFORNIA ECONOMIC OUTLOOK
2010 2011 2012 2013 2014 2015 2016f
Nonfarm Job Growth -1.1% 1.1% 2.4% 3.2% 3.1% 3.0% 2.3%
Unemployment Rate 12.3% 11.8% 10.4% 8.9% 7.5% 6.2% 5.5%
Population Growth 0.7% 0.7% 0.7% 0.9% 0.9% 0.9% 0.9%
Real Disposable
Income, % Change 0.9% 3.4% 4.7% 0.2% 3.0% 4.3% 4.5%
SERIES:CA Economic Outlook
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

17.
CALIFORNIA HOUSING MARKET
OUTLOOK

18.
SALES OF EXISTING DETACHED HOMES
California, Mar. 2016 Sales: 415,220 Units, +6.9%YTD, +5.7%YTY
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
Jan-05
Sep-05
May-06
Jan-07
Sep-07
May-08
Jan-09
Sep-09
May-10
Jan-11
Sep-11
May-12
Jan-13
Sep-13
May-14
Jan-15
Sep-15
*Sales are seasonally adjusted and annualized
SERIES: Sales of Existing Single Family Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Mar16:
415,220
Mar-15:
392,660

19.
HOUSEHOLD FORMATION REBOUNDING
SERIES: Household Formation
SOURCE: U.S. Census Bureau, HousingVacancy Survey
1.5
1.9
1.2
0.6
0.4
0.6 0.6 0.6
0.9
0.7
1.0
1.3
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Annual Household GrowthMillions

20.
MEDIAN PRICE OF EXISTING DETACHED HOMES
California, Mar. 2016: $483,280, +8.9% MTM, +4.0%YTY
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
Jan-05
Sep-05
May-06
Jan-07
Sep-07
May-08
Jan-09
Sep-09
May-10
Jan-11
Sep-11
May-12
Jan-13
Sep-13
May-14
Jan-15
Sep-15
P: May-07
$594,530
T: Feb-09
$245,230
-59% from
peak
SERIES: Median Price of Existing Single Family Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Mar-16:
$483,280
Mar-15:
$464,640

21.
INVENTORYCONTINUEDTO
DECLINE FROM LASTYEAR
Mar. 2015: 3.8 Months; Mar. 2016: 3.6 Months
Note: “Unsold Inventory Index” represents the number of months it would take to sell the remaining inventory for the month in question.
The remaining inventory for the month is defined as the number of properties that were “Active”, “Pending”, and “Contingent” (when
available) and divide the sum by the number of “Sold” properties for the month in question.
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
Jan-05
Sep-05
May-06
Jan-07
Sep-07
May-08
Jan-09
Sep-09
May-10
Jan-11
Sep-11
May-12
Jan-13
Sep-13
May-14
Jan-15
Sep-15
SERIES: Unsold Inventory Index of Existing Single Family Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

22.
INVENTORY DROPPED SIGNIFICANTLY
INTHE BAY AREA SINCE 2009 BUT REMAINEDTIGHT
Note: “Unsold Inventory Index” represents the number of months it would take to sell the remaining inventory for the month in question.
The remaining inventory for the month is defined as the number of properties that were “Active”, “Pending”, and “Contingent” (when
available) and divide the sum by the number of “Sold” properties for the month in question.
2.6
3.3
3.3
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
Bay Area So CA Central Valley
SERIES: Unsold Inventory Index of Existing Single Family Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

23.
INVENTORY IMPROVED INTHE BAY AREA, BUT
DROPPED IN SO CA AND CENTRALVALLEY
-8%
1%
7%
3%
-3%
-9%
-20%
-10%
0%
10%
San Francisco Bay Area Southern California Central Valley
Sales Active ListingsYear-to-Year % Chg
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Mar. 2016

24.
WHERE ISTHE INVENTORY?
– Affordability challenge for repeat buyers
• Low rate on current mortgage
• Low property taxes
• Concerned with capital gains
• Why list when there is nowhere to go I can
afford?
• Could not qualify for a mortgage today
– New construction recovering but LOW
– Demographics:Trade-up buyer pool is smaller
– Measurement error? Off- MLS (aka “pocket’)
listings not being counted in listing stats

25.
FEWER MIDDLE-AGEADULTS IN RECENTYEARS
Source: Harvard Joint Center of Housing Studies,Census Bureau

26.
DROP IN HOMEOWNERSHIP
Source: Harvard Joint Center of Housing Studies,Census Bureau

27.
DECLINE IN # OFTRADE UP BUYERS DUETO POPULATION LOSS &
DROP IN HOMEOWNERSHIP RATE
Source: Harvard Joint Center of Housing Studies,Census Bureau

28.
“MISSING” 100,000 UNITS ANNUALLY,AT LEAST
2015p: 98,500 (42,190 sf, 56,310 mf)
2016f: 124,600 total units
SERIES: New Housing Permits
SOURCE: Construction Industry Research Board
0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
Household Growth:
165,000/yr

29.
HOUSING AFFORDABILITY PEAKED Q1 2012
PRICESV. LOW RATES AND INCOME GROWTH
California vs. U.S. – 1984-2015
% OF HOUSEHOLDSTHAT CAN BUY
A MEDIAN-PRICED HOME
SERIES: Housing Affordability Index ofTraditional Buyers
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
30%
58%
0%
10%
20%
30%
40%
50%
60%
70%
80% CA US
Annual Quarterly

30.
61
58
55 54 53
49 48
46 45 44
40 39 38 37
30
27 26 26 26 25 25
23 22 21 21 21 20
17
14
11
0
10
20
30
40
50
60
70
HOUSING AFFORDABILITY IN CA: BY COUNTY
SERIES: Housing Affordability Index
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
2015-Q4: % able to purchase median priced home

31.
$27,010
$45,340
$69,990 $71,630
$87,520 $89,250
$98,400
$119,970
$96,642
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
Retail
Salespersons
Chefs and
Head Cooks
Elementary
School
Teachers
Firefighters Police and
Sherriff's
Patrol
Officers
Computer
Programmers
Registered
Nurses
Software
Developers
(Applications)
Min. Inc
Required to
Buy a Med.
Home
HOWWAGES MEASURED AGAINST INCOME
REQUIREDTO BUY A HOME
SOURCE: Bureau of Labor Statistics, C.A.R.
2014 Annual Mean Wage
California

32.
SHARE OF FIRST-TIME BUYERS REMAINS
BELOW LONG-RUNAVERAGE
29.5%
0%
10%
20%
30%
40%
50%
% First-Time Home Buyers Long Run Average
Long Run Average = 38%
SERIES: 2015 Housing Market Survey
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

33.
THE SHARE OF INTERNATIONAL BUYERS DROPPED
TOTHE LOWEST LEVEL IN 8YEARS
4%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
2008 2009 2010 2011 2012 2013 2014 2015
Q.Was the buyer an international buyer – a person who was a citizen of another country who wished to
purchase residential real estate in the U.S.?
SERIES: 2015 Housing Market Survey
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

34.
ESTIMATE OF SALES BY COUNTRY
SERIES: 2015 Profile of International Home Buying Activity
SOURCE: NATIONAL ASSOCIATION OF REALTORS®

35.
ESTIMATE OF SALESTO INTERNATIONALCLIENTS
(IN BILLION DOLLARS)
SERIES: 2015 Profile of International Home Buying Activity
SOURCE: NATIONAL ASSOCIATION OF REALTORS®

36.
4 STATESACCOUNTED FOR ½ OF
INTERNATIONAL SALES
SERIES: 2015 Profile of International Home Buying Activity
SOURCE: NATIONAL ASSOCIATION OF REALTORS®

37.
COUNTRY OF INTERNATIONAL BUYER
• China (43%)
• Mexico (8%)
• South Korea (8%)
SERIES: 2015 Housing Market Survey
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

38.
BAY AREA HOUSING MARKET

39.
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
SALES OF EXISTING DETACHED HOMES
Bay Area, Mar. 2016: 3,665 Units, -3.4%YTD, -8.1%YTY
SERIES: Sales of Existing Detached Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

40.
0
10000
20000
30000
40000
50000
60000
70000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
SALES BOUNCED BACKAFTER
DECLINING IN 2013 AND 2014
Bay Area, 2015: +3.5%, 2016YTD: -3.4%
SERIES: Sales of Existing Detached Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

41.
NONFARM EMPLOYMENT
Bay Area Region
SERIES: Employment Growth
SOURCE: US Bureau of Labor Statistics
2015 2007 Change % Change
Alameda/Contra Costa 1,095.1 1,064.3 30.8 2.9%
Marin 113.0 106.9 6.1 5.7%
Napa 70.8 64.6 6.2 9.6%
San Francisco/San Mateo 1,051.1 899.3 151.8 16.9%
Santa Clara 1,042.8 921.1 121.7 13.2%
Solano 132.3 130.1 2.2 1.7%
Sonoma 197.0 189.9 7.1 3.7%
Bay Area 3,702.1 3,376.2 325.9 9.7%
Nonfarm Employment (Thousands)

42.
SALES OF EXISTING DETACHED HOMES
Bay Area Counties
Alameda 722 447 781 61.5% -7.6% -4.6%
Contra-Costa 798 541 866 47.5% -7.9% -6.6%
M arin 128 94 183 36.2% -30.1% -16.8%
Napa 94 55 105 70.9% -10.5% -5.8%
San Francisco 151 99 182 52.5% -17.0% -12.0%
San M ateo 302 199 349 51.8% -13.5% -2.3%
Santa Clara 741 488 846 51.8% -12.4% -2.3%
Solano 390 325 352 20.0% 10.8% 12.0%
Sonoma 339 243 323 39.5% 5.0% 8.5%
Y-t-DY-t-YCounty Mar-16 Feb-16 Mar-15 M-t-M
SERIES: Sales of Existing Detached Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

43.
March
2016
February
2016
March
2015
Median Time on the Market
21.2 Days 25.5 Days 21.6 Days
Unsold Inventory Index
2.6 Mos. 3.2 Mos. 2.1 Mos.
SUPPLY INDICATORS
Bay Area
Note: The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular
month with the sales rate of the month in consideration. Inventory includes listings with “Active”, “Pending”, and “Contingent” (when available)
statuses.
SERIES: MedianTime of Market, Unsold Inventory Index
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

44.
UNSOLD INVENTORY INDEX (MONTHS)
Bay Area
SERIES: Unsold Inventory Index
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
County Mar-16 Feb-16 Mar-15
Alameda 2.2 3.0 2.1
Contra-Costa 2.4 3.0 1.3
Marin 3.8 3.8 2.6
Napa 4.6 6.5 4.1
San Francisco 2.7 3.3 1.6
San Mateo 2.2 2.7 1.6
Santa Clara 2.4 2.9 1.9
Solano 2.6 2.8 3.7
Sonoma 3.1 3.9 3.7
S. F. Bay Area 2.6 3.2 2.1

45.
MASSIVE HOUSING SHORTAGE
Metro
Job Creation
2010-2015
New Home
Construction
2010-2015
Ratio
San Francisco-
Oakland
234,000 30,000 7.8
Grand Rapids 46,000 6,000 7.8
San Jose 118,000 23,000 5.1
San Diego 101,000 21,000 4.9
Miami-Ft.
Lauderdale
191,000 48,000 3.9
Salt Lake City 57,000 15,000 3.9
New York City 400,000 114,000 3.5

46.
TIGHT SUPPLY CREATED MORE MARKET COMPETITION
4
3 3
0
1
1
2
2
3
3
4
4
5
San Francisco
Bay Area
Southern
California
Other Counties in
California
Number of Multiple Offers
SERIES: 2015 Housing Market Survey
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
36%
56%
63%
0% 20% 40% 60% 80%
Other Counties in
California
Southern California
San Francisco Bay
Area
Percent with Multiple Offers

47.
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area, March 2016: $761,160, Up 4.2%YTY
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
SERIES: Median Price of Existing Detached Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

48.
MEDIAN PRICE OF EXISTING DETACHED HOMES
Bay Area Counties
•
Alameda $762,570 $712,990 $713,060 7.0% 6.9%
Contra-Costa $572,620 $538,650 $491,780 6.3% 16.4%
M arin $1,148,150 $1,113,640 $1,085,230 3.1% 5.8%
Napa $666,670 $664,470 $562,500 0.3% 18.5%
San Francisco $1,360,580 $1,437,500 $1,275,000 -5.4% 6.7%
San M ateo $1,205,000 $1,200,000 $1,300,000 0.4% -7.3%
Santa Clara $1,065,000 $942,500 $932,100 13.0% 14.3%
Solano $376,420 $365,620 $345,100 3.0% 9.1%
Sonoma $596,090 $554,610 $519,500 7.5% 14.7%
Y-t-YCounty Mar-16 Feb-16 Mar-15 M-t-M
SERIES: Median Price of Existing Detached Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

49.
HOUSING DEMAND INCREASED IN MORE
AFFORDABLE REGIONS
Annual % Change in Sales
SERIES: Sales of Existing SFH
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
County 2015 (yty% chg.)
Alam eda -0.7%
Contra-Costa 7.9%
Marin -3.8%
Napa 10.5%
San Franc isc o -8.2%
San Mateo -6.4%
Santa Clara 6.0%
Solano 18.6%
Sonom a 2.8%
S. F. Bay Area 3.5%

50.
SAN FRANCISCO COUNTY

51.
0
50
100
150
200
250
300
350
400
450
Jan-05
Sep-05
May-06
Jan-07
Sep-07
May-08
Jan-09
Sep-09
May-10
Jan-11
Sep-11
May-12
Jan-13
Sep-13
May-14
Jan-15
Sep-15
SALES OF EXISTING DETACHED HOMES
San Francisco County, Mar. 2016: 151 Units, -12.0%YTD, -17.0%YTY
SERIES: Sales of Existing Single Family Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

52.
0
500
1000
1500
2000
2500
3000
3500
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
SALES DOWNTWOYEARS IN A ROW
AFTER REACHINGTHE RECENT PEAK IN 2013
San Francisco, 2015: -8.2%, 2016YTD: -7.8%
SERIES: Sales of Existing Detached Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

53.
EMPLOYMENTGROWTH:
CALIFORNIAVS. SAN FRANCISCO/SAN MATEO
Feb 2016: 2.8%
Feb 2016: 4.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
California San Francisco/San Mateo
ANNUAL PERCENTCHANGE
SERIES:Total Nonfarm Employment
SOURCE: US Bureau of Labor Statistics, CA Employment Development Division

54.
UNSOLD INVENTORY INDEX
San Francisco County, March 2016: 2.7 Months
Note: The Unsold Inventory Index represents the number of months it would take to deplete the remaining inventory at the end of a particular
month with the sales rate of the month in consideration. Inventory includes listings with “Active”, “Pending”, and “Contingent” (when available)
statuses.
0
2
4
6
8
10
12
Jan-05
Sep-05
May-06
Jan-07
Sep-07
May-08
Jan-09
Sep-09
May-10
Jan-11
Sep-11
May-12
Jan-13
Sep-13
May-14
Jan-15
Sep-15
SERIES: Unsold Inventory Index of Existing Single Family Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

55.
NEW HOUSING PERMITS
San Francisco County, Feb. 2016: 635 Units, +101.8%YTD
0
200
400
600
800
1,000
1,200
Jan-05
Sep-05
May-06
Jan-07
Sep-07
May-08
Jan-09
Sep-09
May-10
Jan-11
Sep-11
May-12
Jan-13
Sep-13
May-14
Jan-15
Sep-15
Single Family Multi-Family
SERIES: New Housing Permits
SOURCE: Construction Industry Research Board

56.
0
1000
2000
3000
4000
5000
6000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Single Family Multi-Family
SAN FRANCISCO NEW HOUSING PERMITS
2015: Single Family, +88.6%; Multi-Family, +18.7%
SERIES: New Housing Permits
SOURCE: Construction Industry Research Board

57.
MEDIAN PRICE OF EXISTING DETACHED HOMES
San Francisco County, Mar. 2016: $1,360,580, Up 6.7%YTY
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
Jan-05
Sep-05
May-06
Jan-07
Sep-07
May-08
Jan-09
Sep-09
May-10
Jan-11
Sep-11
May-12
Jan-13
Sep-13
May-14
Jan-15
Sep-15
SERIES: Median Price of Existing Single Family Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

58.
ASKING RENTS FOR CLASS A&B APARTMENTS
San Francisco MSA, 2015 Q4: $3,146 , Up 8.2%YTY
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
Q4 2005 to Q4 2010: Up 17.3%
SERIES: Asking Rents
SOURCE: Realfacts
Q4 2010 to Q4 2015: Up 65.5%

59.
0%
1%
2%
3%
4%
5%
6%
7%
Q1/05Q4/05Q3/06Q2/07Q1/08Q4/08Q3/09Q2/10Q1/11Q4/11Q3/12Q2/13Q1/14Q4/14Q3/15
VACANCY RATES FOR CLASS A&B APARTMENTS
San Francisco MSA, 2015 Q4: 5.6%
SERIES: Vacancy Rates
SOURCE: Realfacts

60.
HOUSING AFFORDABILITY INDEX
San Francisco County, 4th Quarter 2015: 11%
% OF HOUSEHOLDSTHAT CAN BUY
0%
5%
10%
15%
20%
25%
30%
35%
SERIES: Housing Affordability Index ofTraditional Buyers
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

61.
$30,340
$52,690 $49,230
$70,680
$88,390
$97,570
$124,980 $118,690
$254,107
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
Retail
Salespersons
Auto.
Mechanics
Chefs and
Head Cooks
Elementary
School
Teachers
Firefighters Computer
Programmers
Registered
Nurses
Software
Developers
(Applications)
Min. Inc
Required to
Buy a Med.
Home
HOWWAGES MEASURED AGAINST INCOME
REQUIREDTO BUY A HOME
SOURCE: Bureau of Labor Statistics, C.A.R.
Annual Mean Wage
San Francisco

62.
OAKLAND

63.
SALESOFSINGLEFAMILYHOMES
Oakland, March 2016: 188 Units
-1.1% 2015YTD, +4.5% 2016YTD, +0.5%YTY
SOURCE: Clarus Market Metrics

64.
MEDIANPRICEOFSINGLEFAMILYHOMES
Oakland, March 2016: $600,000
Up 14.6% MTM, Up 10.1%YTY
SOURCE: Clarus Market Metrics

65.
FORSALEPROPERTIES
Oakland, March 2016: 561 Units
-9.4% 2015YTD, -12.7% 2016YTD, -9.7%YTY
SOURCE: Clarus Market Metrics
Note: “For Sale Properties” represents the overall supply that exist throughout the entire month, including any listings that appear as “Active” any
point in time during the month.

66.
CITY OF SANTA CLARA

67.
SALESOFSINGLEFAMILYHOMES
City of Santa Clara, March 2016: 26 Units
-9.1% 2015YTD, -19.7% 2016YTD, -42.2%YTY
SOURCE: Clarus Market Metrics

68.
MEDIANPRICEOFSINGLEFAMILYHOMES
City of Santa Clara, March 2016: $1,200,000
Up 4.3% MTM, Up 29.0%YTY
SOURCE: Clarus Market Metrics

69.
FORSALEPROPERTIES
City of Santa Clara, March 2016: 88 Units
+0.6% 2015YTD, -19.7% 2016YTD, -3.3%YTY
SOURCE: Clarus Market Metrics
Note: “For Sale Properties” represents the overall supply that exist throughout the entire month, including any listings that appear as “Active” any
point in time during the month.

70.
2016 FORECAST

71.
CALIFORNIA HOUSING MARKET OUTLOOK
2010 2011 2012 2013 2014 2015 2016f
SFH Resales (000s) 416.5 422.6 439.8 414.9 382.7 407.1 432.6
% Change -12.3% 1.4% 4.1% -5.9% -7.8% 6.4% 6.3%
Median Price ($000s) $305.0 $286.0 $319.3 $407.2 $446.9 $474.4 $489.4
% Change 10.9% -6.2% 11.6% 27.5% 9.8% 6.2% 3.2%
Housing Affordability
Index 48% 53% 51% 36% 30% 31% 28%
30-Yr FRM 4.7% 4.5% 3.7% 4.0% 4.2% 3.9% 4.5%
SERIES:CA Housing Market Outlook
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

72.
SALES UP FOR 2015 AND CONTINUETO IMPROVE IN 2016;
PRICEWILL GROW STEADILYTHISYEAR AND NEXT
Units
(Thousand)
407.1
432.6
0
100
200
300
400
500
600
700
2005 2007 2009 2011 2013 2015
Thousands
Sales of Existing Detached Homes
$474
$489
$0
$100
$200
$300
$400
$500
$600
2005 2007 2009 2011 2013 2015p
Thousands
Median Price
Price
(Thousand)
SERIES:CA Housing Market Outlook
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

73.
• Both CA home sales and prices will be up mid -
single digits in 2016
• Fundamental demand drivers (jobs; rates;
household formation) are strong
• Housing affordability an insurmountable hurdle
for many
• Trading up/down is too expensive for Boomers
• CA will see accelerating out-migration of
Millennials in search of housing they can afford
KEYTAKEAWAYS

74.
STAY CONNECTEDWITH RESEARCH
CARResearchGroup
CARResearchInfo
On.car.org/CARResearch
Housingmatters.car.org

75.
“The Impact of Investors on
California’s Housing Market”
Friday, April 29, 2016
1:00 PM – 1:30 PM
To register: WWW.CAR.ORG/MARKETDATA/VIDEOS
Join us for our next webinar…

76.
THANKYOU!
www.car.org/marketdata
oscarw@car.org
This presentation can be found on
www.car.org/marketdata
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