consumer insights 2q14 east bay area

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ConsumerInsights

Top Amenities by Generation

East Bay Housing Outlook

A Look at The Boomers, Gen X, and Gen Y

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Consumer research in the real estate world is often overlooked because it is difficult and expensive to conduct. However, understanding what home buyers value is critical, given the market climate and competitive field today. Our third annual Consumer Insights report couples our timely market research with qualitative findings from our proprietary “What Do You Call Home?” survey to provide better information on consumer marketing strategies for your communities.

What Do You Call Home?

E-MAIL SURVEYOur survey includes over 100 questions and several hundred variables regarding shoppers’ opinions on their next home and community.

PARTNERSBuilders, developers, and Zillow joined in the effort nationwide by sending an e-mail to their prospective shoppers.

NATIONWIDE SAMPLEOver 22,000 responses are collected across the nation annually. We have access to over 50,000 total responses in our past survey database.

ConsumerInsights

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What Do You Call Home?

Insight Customized

GEOGRAPHICWe understand that geography affects consumer preferences. Responses can roll up to a national or regional level or drill down to the MSA or submarket level.

PRICE POINTWe understand that affordability is different for each new home shopper. Respondents

were asked their desired price point and payment in their next home; our report

can be filtered accordingly.

GENERATIONS & LIFESTAGEWe understand that lifestage impacts purchasing behaviors. Reports are available specifically for 55+ and the millennial buyers.

Consumer Insights is a “focus-forward” study so that real estate practitioners can use this information to make strategic decisions moving forward. The information can be customized to meet your needs.

to Increase Your Bottom Line

HOMEKitchenBathroomPrivate outdoor livingGreat spaceArchitectural styleYard preferencesSpecifications & Technology

INTERIOR STYLEInterior style preferencesExterior style preferencesInterior specificationsTextureColor

COMMUNITYCommunity amenitiesLifestyle

ATTITUDESHow they liveHow they shopWhat they value

Fantastic Insight On:

To learn more about how you can better develop your next community, marketing strategy, or new product design, please contact:

MOLLIE CARMICHAELPrincipal

[email protected] (949) 870-1214

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Dean manages residential and commercial real estate consulting assignments across the country and has more than 15 years of experience in real estate market feasibility analyses. He is our Senior Vice President with an emphasis on the Bay Area, Sacramento, the Central Valley, and Northern Nevada markets. His experience as a seasoned analyst has spanned nearly 20 states and over 60 markets, consulting on developments ranging from a few lots of multi-million dollar custom homes to master planned communities with thousands of units. Dean’s analyses have focused on pricing, absorption, buyer profiles, product recommendations and segmentation, supply and demand, economic and demographic impacts, and aggregate housing market trends. Previously, Dean spent many years at Hanley Wood Market Intelligence (formerly The Meyers Group) and Sullivan Group as Managing Director of their Sacramento office. Dean plays basketball when not injured, writes novels and screenplays, and almost always wins at Trivial Pursuit. Almost.

EDUCATIONPh.D. from the University of California, Los Angeles B.A. in Political Science from Cal State Fullerton.

AFFILIATIONSBuilding Industry AssociationUrban Land Institute

DEAN WEHRLISr. Vice President

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Mollie Carmichael is a Principal at John Burns Real Estate Consulting. For over 25 years, Carmichael has helped companies increase profits dramatically by understanding the market and consumer first. She is passionate about guiding strategic planning decisions with consumer and market based methodologies in order to optimize financial results. Carmichael has led research efforts throughout the country on masterplan communities and individual neighborhood design where companies. In addition to managing various consulting assignments, Carmichael leads our firm’s Consumer Insights research to help our clients understand what consumers value in their homes and communities.

She has led a national consumer survey for the last several years that has been launched to several million homeshoppers throughout the company. The survey effort is all about better understanding what consumers value and what they will pay for in their next community and home. It is the only survey of its kind today.

Prior to joining the company, Carmichael served as a Vice President of Strategic Marketing for Lennar, Centex Homes, Pulte Homes/Del Webb and Vice President of Residential Product Planning at The Irvine Company, where she led strategic planning, target land acquisition strategies, acquisition and market study due diligence, consumer and product segmentation, quantitative and qualitative consumer research, competitive research, as well as tactical media planning, model and sales office merchandising.

Carmichael has been quoted in various media publications including the Wall Street Journal, MSNBC, Reuters, Businessweek, and Professional Builder. She has been a speaker on Consumer Insights and innovative planning ideas throughout the country including PCBC, ULI, UBS, and other specific venues.

AFFILIATIONSULI – Community Development CouncilBuilding Industry Association55+ Housing Council

MOLLIE CARMICHAELPrincipal

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will consider a smaller backyard if it is designed as a great outdoor space.

80%

of prospective shoppers say that design is one of the most important factors motivating them to buy a new home.

81%

ConsumerInsights

ConsumerInsights

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of all shoppers have pets.

67% ConsumerInsights

Look out for multi-generational living! 39% plan on an elderly parent and 35% plan on a child over 18 living with them with their next purchase.

ConsumerInsights

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Top kitchen features include large islands, walk-in pantries, and high-tech appliances.

will use either their tablet or mobile phone while shopping for their next home.

62%

ConsumerInsights

ConsumerInsights

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New Home Shoppers

BoomersBorn 1946 to 1964

ConsumerInsights

Generations

79%have 2 or fewer

people in household.

34%have 2 or fewer


LIFE STAGE

10%66%

SingleFamily

14%21%

SingleFamily

Highest percentage of college graduates at 45%

9%44%

SingleFamily

56%have 2 or fewer


47%have a down payment of

30% or greater—thanks to their home equity. This generation is looking for the lowest monthly

payment but not necessarily the lowest price. Boomer payments are lower than Gen Y because

they are moving down and putting down equity. Their larger down

payments help! This consumer will rely heavily on equity—particularly

for the consumer that needs to travel further out to purchase or “cash out” for financial security.

will rely on savings for their down payment. They are the most budget-conscious of all

shopping groups.

They are almost 2x more likely to get their down payment from

their family than Gen X.

47%of Boomers Gen X

are paying the highest monthly payments...not the Boomers.

They also have the highest incomes.

PAYMENT, PRICE, AND DOWN PAYMENT

of Gen Y

19% will pay $2,500+/month

52% want a home under $2,500/month

26% are looking for a home priced above $400k (varies by geography)







WWW.REALESTATECONSULTING.COM

New Home Shoppers

Gen XBorn 1965 to 1979

New Home Shoppers

Gen YBorn 1980 to 2000

Let’s look at who’s shopping out there today for a new home! Who are they? What do they want? This infographic is part of a new series of studies by JBREC on generational differences, based on responses from 22,000 new home shoppers. This Generations infographic details each generation’s life stage and behavior in regards to purchasing a home. Visit www.realestateconsulting.com and let us help your team improve your home or community strategies by better understanding your consumers by specific location.

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ConsumerInsights

Top AmenitiesCheck out what 22,000 new home shoppers shared as the amenities they most wanted in their next community. Below are the top 25 preferences by generation. The major differences relate to the presence of children for the younger generations.

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Village Square Recreational Center Children’s Park

Grocery Store Close By Grocery Store Close ByGrocery Store Close By

Fitness CenterWalking Trails Walking Trails

Fitness Center Fitness Center Walking Trails

Restaurants Close By Restaurants Close ByRestaurants Close By

Organized On-Site Programming Shaded AreasCommunity-Wide events

Yoga/Pilates Studio Running Dog Park

RunningCommunity Intranet with Events,

Clubs, Bulletin Boards, etcLake, Pond, Stream, and Water

Elements, $50/Month

Organized On-Site Programming

Community Intranet with Events, Clubs, Bulletin Boards, etc

Children’s Water/Play Area

Community-Wide events Shaded Areas Community-Wide events

Shopping ShoppingVillage Square

Wi-Fi Internet Access in Public Areas

Shopping Recreational Center

Community High-Speed Internet

Recreational Center Village Square

Community High-Speed Internet



Shaded Areas Children’s Park Community High-Speed Internet

Look for our future trends in what consumers want in communities and homes by generation.

We believe it starts with your consumers.

Today’s shoppers rated Service & Retail as the most important

amenities for their next community

purchase.

*

All three generations ranked Fitness

Center and Walking Trails as top

amenities above retail shopping.

*

Community-Wide events rank above

pools, parks, and other typical amenities. Events can be much less

expensive too!

*

A Dog Park is among the top park choices. It scored highest for Gen

Y, followed by the Boomers.

*

Wi-Fi Internet Access and a

Community Intranet with Events, Clubs,

etc. are more important to the Boomers than

they are toGen X and Gen Y.

*

54

78

6

109

1112131415

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Library Live Music in the Park Live Music in the Park

Cycling Movies in the ParkAdult-only Pool (18+)

Community Intranet with Events, Clubs, Bulletin Boards, etcAmphitheater Outdoors Dog Park

Art Shows in the Park Basketball Courts Lake, Pond, Stream, and Water Elements, $50/Month

Hiking Trails with Historical Markers of the Area

Lake, Pond, Stream, and Water Elements, $50/MonthOpen Space, $50/Month

WATER PARKSADVENTURE REC CENTERARTS &ENTERTAINMENTNATURE EVENTS SERVICE &

RETAILSPECIAL

AMENITIES

Let us help! We can help optimize your community and home design for better homes, better places, and better profit.

Please contact Mollie Carmichael at [email protected] or (949) 870-1214.

Events and experiences, as a whole, rank above “hard amenities”

like a pool.

*

Consumer research in the real estate world is often overlooked because it is difficult and expensive to conduct. However, understanding what home buyers value is critical, given the market climate and competitive field today. Our third annual Consumer Insights report couples our timely market research with qualitative findings from our proprietary “What Do You Call Home?” survey to provide better information on consumer marketing strategies for your communities.


Live Music in the Park Yoga/Pilates Studio Sport Fields

Hiking Trails with Historical Markers of the Area

Cycling Yoga/Pilates Studio

Dog Park Children’s Water/Play Area Tennis Courts

Organized On-Site ProgrammingTennis CourtsHiking Trails with Historical

Markers of the Area

Sport Fields Basketball CourtsRemote Guard Gate, $50/month

16171819202122232425

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Local insight was provided by Dean Wehrli, Consulting.

For further information, on our research please contact Dean at [email protected].

East Bay Area Analysis

• East Bay Area remains strong in May. The East Bay market continues to show strength across a variety of product type and price points. JBREC consultant Dean Wehrli notes that sales in Dublin have been normalizing at a sales pace of 3–5 net sales a month, with prices ranging from low $800Ks to +1 million. Limited land supply close to tech job hubs and elevated land prices are driving a shift towards higher-density product type in the East Bay.

• East Bay employment market continues to grow. Over the 12 months ending April, the total number of jobs in the East Bay Area increased 1.6%, growing by 16,300. The education and health services sector added the most jobs, growing by 5,400. The high-income sector lost 200 jobs. Future job growth will remain stable as companies continue to enter the area. Recently, Amazon started hiring for its new 574K square foot distribution center in Newark.

• Investor activity trends lower. Over the last year, home prices in the East Bay increased 12% according the Burns Home Value Index™. Healthy price growth over the last year has decreased distressed inventory and has slowly reduced investor activity in the East Bay housing market. In 1Q14, the investor share of total sales decreased to 25.8% from 30.6% a year earlier.

• Tenant’s spillover from San Francisco grows. While technology companies are paying up for expensive commercial space in the city, a number of other tenants are getting priced out of San Francisco submarkets and pushed into the East Bay. Over the past 18 months, companies migrating or expanding out of San Francisco to the East Bay have leased a total of 300,000 sq. ft. Recently, Del Monte Foods moved its office and 150 employees from San Francisco to Walnut Creek, where prices reach a high of $36 per square foot compared to nearly $60 per square foot in San Francisco.

Analysis

Dean WehrliSr. Vice PresidentConsulting

East Bay Area, CA June 2014

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Housing Cycle Risk Index

Market TrendsMetro Analysis and Forecast

HCRI Legend

Our HCRI is a 1–2 year leading indicator for home price appreciation/depreciation. Improving markets (rising prices and rising construction) make the market riskier and vice versa.

*Based on a three-month trend

Demand

Actual results will vary from projections and the variation can be significant. We assume no liability for the use of any of the data or projections in this report. Projections as of: June 2014

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Consulting Services

Our Custom Consulting Team helps our clients maximize opportunity in the housing market. Our clients benefit from a team that applies its public and private home building background, local market insight, and analytical processes to market research.

1. Market Feasibility

2. Consumer Research

3. Valuation & Cash Flows

4. Community Planning

5. Apartment Analysis

6. Litigation Support

7. Performance Improvement

8. Demand Model by Lifestage

9. Business Plan/Strategy Development

10. Loan Workouts/Restructuring

11. Commercial Analysis

12. Urban Residential & Mixed Used Redevelopment

13. International & Resort Services

Advisory

Scope ofAdvisory

Marketing and Sales

MarketHealth

People/Demographic

Shifts

Societal/GeographicPersonality

Demandby Lifestageand Price

ConsumerPersonality &Preferences

HousingSupply

Competitve Environment

Product

FinancialTesting

JBREC Client Segments

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Research Services

Metro Analysis & ForecastThis monthly report provides an overview of major housing and economic metrics, as well as our forecasts, at an MSA level. This is combined with local insight, proprietary surveys, and extensive data analysis to provide a complete picture of the important housing dynamics and shifts at the market level.

MAF

Regional Analysis & ForecastThis comprehensive monthly report summarizes important information in ten regions and key metro areas. This includes five-year pricing forecasts, supply and demand, and housing affordability and market health.

RAF

U.S. Housing Analysis & ForecastThis monthly report examines more than 150 metrics related to housing, and includes an Executive Summary with an overview of the important metrics affecting the housing market and our view of its impact on the future.

USHAF

Home Builder Analysis & ForecastThis report examines each of the publicly traded home builders based on their geographic footprint, ranked by their forecasted market growth in mid, small and micro-cap. It also includes location comparisons of builders based on the builders’ market fundamentals and submarket desirability.

HBAF

Apartment Analysis & ForecastThis wide-ranging quarterly report includes an economic outlook for the multifamily market and analysis of the interplay between housing and apartment market dynamics and demographics. Included are five-year apartment rent forecasts, and rankings of top apartment REITs based on their regional diversification and economic factors.

AAF

Monthly Builder Survey Every month we survey more than 200 builders across the nation on new home market conditions. Our survey provides timely and accurate insights on housing market conditions just a few days after the end of every month. We believe our survey represents market conditions for production volume builders much more accurately than the Census Bureau.

Quarterly Land Survey and Land IndexOur quarterly land survey and index provides a balanced qualitative and quantitative approach to understanding the land market, using a proprietary model built through published data, local expertise, and our own market knowledge.

National Consumer ResearchWe have partnered with builders and developers across the nation to launch our third annual Consumer Insights survey. These three surveys combined present more than 50,000 total responses from prospective home buyers.

Ongoing Insight

• White Papers: We publish thorough research reports covering relevant and important topics.

• Truth in Housing: We regularly send out email notes to clients called “Truth in Housing” which include relevant non-confidential insight that we uncover in the field, at industry conferences, or through our industry contacts.

• Public Builder Call Summaries: We summarize key performance statistics and market insight from the public builder quarterly earnings conference calls.

• Industry Expert Webinars: We sponsor webinars with Q&A that inform our clients of timely market and consumer research.

The SummitOur annual client-only conference, The Summit, gathers leaders across the housing industry for one and a half days of thought-provoking discussion and networking.

Lisa Marquis JacksonSr. Vice President

For more information about our research, please contact:

The Housing Market Outlook, our other annual client-only conference, is designed to be the industry’s most informative day of the year. This new conference will highlight insight from 50 speakers from every region and discipline of the housing industry.

HOUSING MARKET OUTLOOK

[email protected](214) 389-9003

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