Favorable home prices, record-low interest rates, and the belief that rates will rise in the near future were the primary motivators leading home buyers to purchase in 2009 compared with last year, according to the California Association of REALTORS®' (C.A.R.) "2009 Survey of California Home Buyers" released this week.
Sixty-eight percent of buyers said price decreases motivated them to buy a home, while 39 percent reported low interest rates helped them move to a better location. Twenty-three percent claimed the likelihood that rates will move up as the motivating factor.
"After back-to-back years of sharp declines, home sales in California rebounded in 2008 and early 2009," said C.A.R. President James Liptak. "The increase reflected the combination of favorable prices, low mortgage rates, and home buyer tax credits, fueled primarily by sales of distressed properties that accounted for more than half of the state's transactions.
"Housing affordability has improved dramatically in response to the decline in home prices along with historically low mortgage rates, creating a tremendous opportunity for home buyers in California," he added.
Forty-nine percent of all buyers purchased a home through a traditional market sale, while 38 percent purchased a REO/bank-owned property, according to the survey. According to the survey, the large number of distressed properties on the market provided more choices for home buyers in 2009 than in recent years.
"With many homes available on the market at more affordable prices in the past year, home buyers have been devoting more time to considering and carefully selecting their home during the researching and buying process," said C.A.R. Chief Economist Leslie Appleton-Young.
On average, home buyers spent 8.4 weeks considering buying a home in 2009, compared with 7.2 weeks in 2008. Buyers spent an average of 10.3 weeks searching for a home with their REALTOR®, compared with 8.7 weeks in 2008.
"With more uncertainties prevailing in the housing market and the general economy in the last year, buyers wanted to conduct more research prior to buying a property," added Appleton-Young. "This was especially true of first-time buyers, who devoted more time than repeat buyers in considering buying, researching, and previewing homes."
Of those who reported using the Internet as a tool in the home-buying process, Realtor.com continued to be the most popular real estate Web site at 89 percent, followed by individual real estate company Web sites at 81 percent; individual real estate agents, 66 percent; Zillow, 55 percent; Yahoo! Real Estate, 53 percent; and Craigslist, 49 percent.
Twenty-three percent of all home buyers selected their REALTOR® because he or she understood how to purchase foreclosures, short sales, or distressed properties. No home buyers reported this as a factor in previous years.
"Whether somebody is buying or selling a home, finding a good REALTOR® and understanding his or her role should be the first step in what could be the most important transaction in a lifetime," said Julia Keady, president of the Silicon Valley Association of REALTORS®. "REALTORS® have the training and expertise to help the customer with all aspects of the real estate transaction."
C.A.R.'s 2009 Survey of California Home Buyers also revealed 26 percent of buyers plan to live in their current home for two to three years, 44 percent plan to stay for three to four years, and 30 percent plan to stay for four to five years. First-time home buyers made down payments averaging 19.7 percent of their home sales price, compared with 28.3 percent for repeat buyers.
To find a REALTOR® in your area, visit www.silvar.org
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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