Home buyers have changed their behaviors in recent years to adapt to the new housing market environment, according to the 2010 California Association of REALTORS® Survey of California Home Buyers. The survey also reports buyers in 2010 had very high expectations on their real estate agents in the negotiation process.
Here are some key findings from the survey:
• First-time buyers took advantage of the improvement in housing affordability over the past two years, as evidenced by the increase in their share of all home buyers. The share of first-time buyers increased for the second consecutive year from 38 percent in 2009 to 46 percent in 2010. It was the record high since the survey was first conducted in 2002, when only 7 percent of home buyers were first-timers.
• The federal home buyer tax credit was an influencing factor in the buyer's decision to purchase, as three quarters of first-time buyers admitted that the tax credit had an impact on their decision to buy their home.
• With distressed properties generally sold at a bigger discount than regular market sales, the share of home buyers who were interested in purchasing REO/bank-owned properties and short-sale homes increased from 2009. Home buyers who bought an REO/bank-owned property increased slightly from 38 percent in 2009 to 41 percent in 2010, while those who purchased a short-sale home increased from 13 percent to 16 percent.
• Home buyers in 2010 were more optimistic about future home prices than buyers in 2009. Nearly a quarter (23 percent) of them believed that home prices in their neighborhood would increase in one year, compared to 8 percent in 2009.
• Home buyers in general put a larger percent of down payment for their home purchase compared to 2009. On average, first-time buyers put an average of 23.1 percent as their down payment in 2010, while repeat buyers put an average of 37.3 percent. The percentages of down payment for both groups were higher when compared to those in 2009.
• Home buyers continued to experience considerable difficulty in obtaining financing for the homes they bought. On a scale of "1" to "10," with "1" being "very easy" to obtain financing and "10" being "very difficult," home buyers reported an average level of difficulty of 8.5, compared to 8.1 in 2009.
• When asked why they were satisfied with their agent, home buyers continued to cite "always quick to respond" (74 percent) and "negotiated good deal on their behalf" (69 percent) as top two reasons for satisfaction. With home prices falling sharply from the peak years and more distressed properties in the market, many home buyers had very high expectations on their agent in the negotiation process.
• Overall, the majority of home buyers were pleased with their agent. Seventy-five percent of first-time buyers and 70 percent of repeat buyers said they would use the same agent again.
"The survey shows that a successful transaction depends a lot on a REALTOR®, who is experienced and knowledgeable about the local area," said Jeff Bell, president of the Silicon Valley Association of REALTORS®. "Many people don't realize that all real estate licensees are not the same. Only real estate licensees who are members of the National Association of REALTORS® are properly called Realtors®. Realtors® subscribe to a strict Code of Ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate."
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.