More properties in California sold for above their asking price this year, due to low inventory that caused tough competition among buyers, according to the latest housing market survey by the California Association of REALTORS® (C.A.R.).
According to C.A.R.'s "2013 Annual Housing Market Survey" 49.5 percent of all homes sold this year were sold above asking price, compared with 25.9 percent in 2012 and 16.6 percent in 2011. The median premium paid over the list price for homes that sold above list price was 4.8 percent, unchanged from 2012.
The low housing inventory led to intense market competition and more multiple offers. According to C.A.R.'s survey, 72 percent or more than seven of 10 home sales received multiple offers in 2013, with each home receiving an average of 5.7 offers.
For the third consecutive year an increasing number of home sellers – nearly half – said planned on purchasing another home in the future. "This shows sellers have a positive outlook about the market situation and the economy. In the last few years, sellers that wanted to move could not because they were underwater or afraid they would be. They are more confident about the economy now and that will reflect in next year's market," said Carolyn Miller, president of the Silicon Valley Association of REALTORS®.
More than a quarter of all home buyers paid with all cash in 2013, triple what it was in 2001, when the share was 8.8 percent. The share of all cash buyers continued to stay well above the long-run average of 15.1 percent since 1998.
Interest in owning California property from foreign buyers increased. In fact, the share of international buyers rose for the third year in a row, up from 5.8 percent of total sales in 2012 and 5.7 percent in 2011 to 8 percent in 2013. More than half of all international buyers bought the property as a primary residence (57 percent) and 31 percent of them purchased the property as an investment. Majority of foreign buyers came from China (34 percent), Mexico (15 percent), and Canada (10 percent).
As investors and first-time buyers competed intensely for lower-priced properties. Nineteen percent of total sales went to investors in 2013 compared to 16 percent in 2012. This resulted in a drop in the share of first-time buyers in 2013 (28 percent), well below the long-run average of 38 percent.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please email or call the SILVAR office at (408) 200-0100.