The rise in home prices, still very low interest rates, and better personal financial situations are causing home sellers to be more optimistic about repurchasing a home than in the past few years, according to a recent home seller survey.
The "2013 California Home Sellers Survey" conducted by the California Association of REALTORS®, indicates 69 percent or more than two-thirds of home sellers purchased a home in 2013 after selling their previous residence. This number is up from 47 percent in 2012 and just 12 percent in 2011.
Sellers appear much more optimistic about the future. Nearly half of sellers surveyed (43 percent) believe home prices will rise in one year, compared to just 9 percent in 2012. Fifty-eight percent believe home prices will increase in five years, up from 12 percent in 2012.
Reasons for selling changed significantly in just one year. In 2012, majority of sellers surveyed sold primarily because of financial difficulties. As home prices surged, a desire to trade up became the top reason for selling in 2013. Others wanted to take advantage of low interest rates to finance their next home. Some sellers believed the price of their home had peaked and wanted to cash out.
Tight market competition in the first half of 2013 led to an increase in multiple offers. Nearly all home sellers surveyed (98 percent) said they received multiple offers, up from 83 percent in 2012. On average, each home sale received 5.9 offers in 2013 compared to 3.1 offers in 2012.
Nearly half (45 percent) of all sellers received offers higher than the asking price. In fact, more than one-third (37 percent) received three or more offers above asking price. Sellers, on average, received 2.2 offers above asking price.
"Multiple offers and bidding wars were most evident in Silicon Valley the past year, where our members reported as many as 30 to 60 offers on a home," says David Tonna, president of the Silicon Valley Association of REALTORS®.
Tonna said the region continues to attract investors, international buyers and those with cash even with the rise in prices and interest rates in the past few months. "Investor interest is still present, but is down a bit due to higher prices, but there are many foreign buyers looking at property here. The Bay Area is a gateway to the Pacific Rim with the finest institutions for learning, cultural and economic diversity, ideal geography, and weather conditions," says Tonna. "Even at a time when interest rates are slowly rising, the demand for homes in the area is intense."
Tonna advises sellers to seek professional advice when they plan to sell their home. "If you are considering selling your home, speak with an experienced REALTOR® who knows the local real estate market and can evaluate your home. A REALTOR® can tell you what buyers are looking for in a home and help price your home competitively," says Tonna.
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.