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Follow Up Program

Edition

ContentsIndustry Facts Page 2

Mortgage Stats Page 3

Buyer Facts, Trends & Demographics Page 4

First-Time Home Buyer Facts Page 5

Seller Stats, Trends & Demographics Page 6

Distressed Properties Page 7

© 2012 Buffini & Company

I hope you enjoy the latest edition of Brian Buffini’s Real Estate Report. The goal of this piece is to help you stay educated on today’s market and position yourself as a true professional and your clients’ trusted advisor. We hope you’ll put this comprehensive report to use in your business.

n Learn where the market is headed and how it affects your clients

n Find out more about today’s buyers and how to nudge them off the fence

n Give sellers a little perspective and get them to take action

n Further communicate why you work by referral in this industry

It’s a good life!

2011 EXISTING HOME SALES BY REGION (COMPARED TO Q3 2010):

SACRIFICES FOR HOMEOWNERSHIP:

West up 16%

South up 15.5%

Midwest up 25.1%

Northeast up 11.6%

industry faCts

SOURCES: NAR PROfilE Of HOmE bUyERS ANd SEllERS 2011, NAR, ORANgE COUNt y REgiStER, WAll StREEt JOURNAl, CNN mONEy, bANk Of AmERiCA: mORtgAgE iNdEx StUdy, RiSmEdiA

FIvE STATES WITH THE HIGHEST PRICE APPRECIATION:

is1,900

sq. feet

costs$190,000

was on the market for 9 weeks

has3 bedrooms

& 2 baths

34% cut spending on luxury items or other nonessentials to purchase a home

25% of buyers cut spending on entertainment

20% cut spending on clothes

12% cancelled their vacation plans

THE TYPICAL HOUSE PURCHASED:

2-3% in 2012

3% in 2013

4% in 2014

HOME PRICES ARE PROjECTED TO INCREASE:

Rent is projected to increase

3%In 2012, existing home sales are projected to increase

4% - 5%

70% of Americans view owning a home as part of the American dream

affordability is the top priority for consumers who are considering a home purchase in the next 12 months

The median home price to median family income has fallen to

2.6%—below the historical ratio of 2.9%

There is currently

8.5 months of inventory

74% of homeowners feel that owning a home is the best long-term investment

West virginia

4.8% South Dakota

3.1%

New York

3% District of Columbia

24%

Alaska

2.1%

nearly 1 out of 3 home sales in December 2011 went to buyers who paid cash

Homes purchased by investors in December 2011

Of the nation’s GDP, housing accounts for

22.8%

17%

Brian Buffini’s Real Estate Report Page 2

mortgage stats

SOURCES: NAR PROfilE Of HOmE bUyERS ANd SEllERS 2011, NAR, bUffiNi & COmPANy mAgAziNE, WAll StREEt JOURNAl, RiSmEdiA

700800900

600500

The median credit score in the US has remained constant over the last decade at around 700

GROUPS WHO FINANCED THEIR HOME PURCHASE:

87%of buyers

82%of repeat

buyers

95%of first-time

buyers

89% Average amount of purchase financed

Typical first-time buyer’s monthly mortgage principal and interest payment is

$794Typical repeat buyer’s payment is

$1,006

AvERAGE AMOUNT OF DOWNPAYMENT:

5% first-time buyers

15% repeat buyers

FIRST-TIME HOME BUYER MORTGAGE TYPES: 18% of refinances in 2011 were cash-out refinances, a drop from 88% at the peak in 2006

37% of refinances were cash-in refinances

CONSUMERS’ MOST IMPORTANT FACTOR WHEN CHOOSING A LOAN:

8% of borrowers were at least one month behind on their mortgage payments as of Q3 2011, down from 9.1% in the previous year

76% of consumers preferred a higher,

fixed-rate mortgage to a lower, variable-rate one

72% of borrowers plan to remain in their

home for more than 7 years

35% of buyers put down

20% or more

lowest possible monthly payment

lowest possible interest rate39%

23%

BUYERS WHO USED A CONvENTIONAL LOAN:

50% of all buyers

64%of repeat buyers

30%of first-time buyers

Brian Buffini’s Real Estate Report Page 3

64%

18%

10%

7%

1%

Buyer faCts, trends & demograPhiCs

SOURCES: NAR PROfilE Of HOmE bUyERS ANd SEllERS 2011, NAR

FACTORS INFLUENCING NEIGHBORHOOD CHOICE:

67% Quality of neighborhood

49% Convenience to work

45% Overall affordability of homes

39% Convenience to family and friends

32% Neighborhood design

28% Convenience to shopping

27% Quality of school district

21% Convenience to entertainment or leisure activities

45% of recent home buyers believe their home is a better investment than stocks

HOME BUYERS BY HOUSEHOLD TYPE:

married couples

single women

single men

unmarried couples

other

The typical repeat buyer purchased a

2,100 square foot home for $219,500

The average buyer searched for

12 weeks

and visited12 homes

19% of home buyers own more than one home

AvERAGE DISTANCE BETWEEN PREvIOUS HOME & NEW HOME PURCHASED:

West 11 miles

South 15 miles

Midwest 10 miles

Northeast 10 miles

51% of buyers said that finding the right property was the most difficult part of the buying process

84% of buyers purchased a previously owned home for a median

price of $180,000

AGE OF HOME PURCHASED:

HOME BUYERS WITH CHILDREN UNDER AGE 18:

None 64%

One 16%

Two 14%

Three + 6%

Year built %

2011 4%

2008 - 2010 13%

2005 - 2007 10%

2000 - 2004 11%

1985 - 1999 21%

1960 -1984 22%

1911 - 1959 16%

Before 1910 3%

16% purchased a new home for a median price of

$230,000

Brian Buffini’s Real Estate Report Page 4

FIRST-TIME BUYERS BY REGION:

34% Midwest

34% South

42% West

43% Northeast

first-time home Buyer faCts

TOP PURCHASE MOTIvATIONS FOR FIRST-TIME HOME BUYERS:

FIRST-TIME HOME BUYERS BY HOUSEHOLD TYPE:

TYPE OF HOME

PURCHASED:

A TYPICAL FIRST–TIME BUYER IS:

54% married couples

21% single women

12% single men

12% unmarried couples

60% desire to own home

11% affordability of home

73% detached single-family home

9% townhouse

12% condo6%

other

SOURCES: NAR PROfilE Of HOmE bUyERS ANd SEllERS 2011, mOvE, iNC.

37% of the market in 2011 was comprised of first-time home buyers

31 years old

earns

$62,400 in income

bought a 1,570 square foot home for

$155,000

plans to spend

10 years in their new home

76.6% of potential first-time homebuyers are millennials

First-time buyers searched for

3 weeks before they contacted an agent

79% used savings

26% received a gift from a friend or relative

9% sold stocks or bonds

8% used their 401(k)

7% received a loan from a relative or friend

METHODS OF FINANCING:

Brian Buffini’s Real Estate Report Page 5

LENGTH SELLERS LIvE IN THEIR HOMES:

OF SELLERS:

Sellers moved a median distance of

20 miles

8.6 The average number of home showings in 2011

12.1 The average number of showings in 2010

The average seller who used an agent sold their home for

$215,000

seller stats, trends & demograPhiCs

SOURCES: NAR, NAR PROfilE Of HOmE bUyERS ANd SEllERS 2011, CNN mONEy, RiSmEdiA, Jd POWER ANd ASSOCiAtES

41% of sellers offered incentives to prospective buyers

Most coMMon incentives:

n Reducing price

n Paying closing costs

n Making repairs

n Buying home warranty

n Paying origination fees or points

$26,000 (a gain of 16%, purchased 9 years ago)

$57,900 (a gain of 39%, purchased 11-15 years ago)

46% traded up

23% traded down

31% bought a comparably sized home

The average FSBO seller sold their home for

$150,000

for 11-15 years

for 8-10years

for 6-7

years

for 4-5

years

18% 17% 16%13%

39% of sellers did not reduce their asking price

The average price cut was

26% 14% 10% 10%

reduced it once

reduced it twice

reduced it three times

reduced it 4 or more times

53 The average age of a seller

38% of sellers have one or more children under 18 living at home

92% of sellers said that their home was listed or advertised online

35% of homes were on the market for less than 2 months before they sold

28% were on the market for more than 6 months

SELLERS’ MEDIAN EQUITY GAIN:

8%

Brian Buffini’s Real Estate Report Page 6

SOURCES: NAR PROfilE Of HOmE bUyERS ANd SEllERS 2011, REUtERS, RiSmEdiA

On average, foreclosed homes sell for a

34% discount

distressed ProPerties

over 50% of buyers considered purchasing a foreclosure

29% didn’t buy because

they couldn’t find the right house

15% didn’t buy because of

the poor condition of the property

15% didn’t buy because of

the “difficult process”

In September 2011, default notices were

down 23% compared to October 2010

In September 2011, total foreclosure filings were

down 31% from September 2010

16 weeks Average time it takes lenders to sign off on a short sale

In 2005 and 2006, foreclosure sales consistently accounted for

less than 5%of all sales nationwide

Foreclosure related sales in Q3 2011 accounted for

57% of all residential sales in Nevada, the highest percentage of any state

20% of all residential sales in Q3 2011 were distressed homes, down from 22% in Q2

Short sales sell for a

24% discount

Brian Buffini’s Real Estate Report Page 7