The 2008 National Association of REALTORS® Profile of Home Buyers and Sellers reveals first-time buyers have risen in market share and plan to own their homes longer than buyers in the past. NAR Chief Economist Lawrence Yun believes it's a trend that will grow.
"First-time buyers are much more flexible in entering the market because they aren't concerned about selling an existing home," Yun said. "Given low home prices, plentiful supply and affordable interest rates, it's been an optimal time for entry-level buyers with a long-term view. Considering the temporary first-time buyer tax credit and improvements to the FHA loan program, we expect stronger entry-level activity as the flow of credit improves – that, in turn, should free more existing owners to make a trade in 2009."
The NAR survey indicates the number of first-time buyers rose to 41 percent from 39 percent of transactions in last year's survey and 36 percent in 2006. The typical first-time buyer purchased a home costing $165,000 and plans to stay in that home for 10 years, up from seven years in 2007. The median age of first-time buyers was 30, down from 31 in 2007, and the median income was $60,600.
The median down payment by first-time buyers was four percent, up from two percent in 2007; the number purchasing with no money down fell from 45 percent in 2007 to 34 percent in the current survey. Yun clarified that the study covers transactions through the middle of 2008.
"We can assume the down payment numbers have shifted recently because credit tightened and no-down payment loans all but disappeared around the close of the survey," Yun explained.
Forty-one percent of buyers said commuting costs were important in neighborhood selection; and 39 percent said transportation costs were somewhat important.
Mark Burns, past president of the Silicon Valley Association of REALTORS®, explained fuel costs have become a more important consideration to many home buyers.
"Quality of life, such as the time spent at home with family and with friends, declines when you are in the car two to three hours a day, five days a week," said Burns. "The cost of gas too, has always been a factor. Many people want to be closer to work, take rapid transit, to telecommute, in order to ease the pain.
Environmentally friendly features were important to 90 percent of buyers. Heating and cooling costs were of primary importance, followed by energy efficient appliances and energy efficient lighting.
Buyers used a variety of resources in searching for a home: 87 percent used the Internet, 85 percent used a real estate agent, 62 percent yard signs, 48 percent attended open houses and 47 percent looked at print or newspaper ads. Buyers most commonly start their search process online and then contact a real estate agent.
Sixty-one percent of buyers are married couples, 20 percent are single women, 10 percent single men, seven percent unmarried couples and two percent other. Twenty-six percent are non-white, nine percent were born outside of the United States, and four percent primarily speak a language other than English.
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.
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