Rising Home Prices; who suffers the most?

housing affordabilityThe percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California dropped to 36 percent in the second quarter of 2013, down from 44 percent in first-quarter 2013 and from 51 percent in second-quarter 2012, according to C.A.R.’s Traditional Housing Affordability Index (HAI).  The second quarter 2013 figure fell below 40 percent for the first time since the third quarter of 2008.

Nearly all regions of the state experienced sharp quarter-over-quarter declines in housing affordability, with Bay Area and coastal regions recording the greatest decreases in the index due to significantly higher home prices.

At an index of 71 percent, Madera County was the most affordable county of the state, while San Francisco and San Mateo counties tied for the least affordable at 17 percent.
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Are Schools that important to Buyers in choosing a Home?

school for kidsRealtor.com announced the results of its Back to School survey, which looks at the impact school boundaries have on buyers looking to purchase a home within two years. Realtor.com® found that three out of five home buyers surveyed said school boundaries will impact their home purchasing decision.

A majority of home buyers who said school boundaries will have an impact are willing to pay 1 percent to 10 percent above budget to live within school boundaries.  Of those surveyed, 91 percent said school boundaries are “important” or “somewhat important,” while only 7.43 percent said school boundaries are “unimportant” or “very unimportant.”

Home buyers who said school boundaries will have an impact on their decision also indicated that they would give up several amenities to live within school boundaries of choice:

  • 62 percent would do without a pool or spa
  • 51 percent would give up accessibility to shopping
  • 44 percent would pass on a bonus room
  • 42 percent would offer up nearby parks and trails

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How much longer will the low housing inventory Last?

out of stockHome shoppers advised to stay patient amid overheated housing market
Source: The LA Times

It’s a seller’s market, so experts are advising home buyers that patience will pay off at a time when the inventory of available homes for sale is low. Experts contend that in six months to a year from now, the inventory of unsold homes should improve markedly, and it should be easier to qualify for financing.
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Are you Millennial Positive on the Housing Market?

millennialsMillennials are increasingly optimistic about residential real estate, according to the most-recent Consumer Outlook Survey by Prudential Real Estate. A full 80 percent of respondents ages 25-34 said their perception of the housing market is “favorable” or “somewhat favorable,” representing a 9 percentage point increase from the Q1 study.

Among all respondents, the national survey also found that confidence in real estate and home values jumped sharply, reaching 83 percent in Q2 compared with 77 percent in Q1.Confidence is highest in both South and West regions at 84 percent.

Among all respondents, 70 percent said that finding the right home and community is crucial to family happiness. Millennials were even more emphatic about the emotional side of homeownership: 93 percent favor a home for “more space for my family,” while only 75 percent view it as “financial security to borrow against.”
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Asking Prices for Homes are Dropping

falling home pricesAsking Prices Fall amid Rising Mortgage Rates

Trulia recently released its latest findings from the Trulia Price Monitor and the Trulia Rent Monitor. Based on the for-sale homes and rentals listed on Trulia, these monitors take into account changes in the mix of listed homes and reflect trends in prices and rents for similar homes in similar neighborhoods through July 31, 2013.

Asking prices on homes for sale are now starting to lose steam as mortgage rates rise, inventory expands, and investor demand declines. Nationally, asking prices dropped 0.3 percent in July – the first month-over-month decline since November 2012. Seasonally adjusted, prices rose 3.3 percent quarter-over quarter, down from a peak of 4.2 percent in April. Year-over-year, prices are up 11 percent nationally; however, this change is an average over the past 12 months and is therefore slower to show changes than monthly and quarterly numbers.

In 64 out of 100 U.S. metros, the quarterly asking home price gain was lower than in the previous quarter. This slowdown was most apparent in the West Coast where prices already have rebounded strongly. Among housing markets where asking prices rose sharply year-over-year, price gains dipped the most quarter-over-quarter in Las Vegas, Oakland, and San Francisco. Other California metros, including Sacramento, Ventura County, San Jose, and Fresno, saw quarter-over-quarter gains drop by at least two percentage points between April and July.
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How Aggressive Home Buyers are winning the Multiple Offer War.

angry buyerThis week, Trulia released the results of its Summer 2013 American Dream Survey. The latest findings reveal the impact today’s competitive real estate market has had on consumer sentiment toward homeownership and the desperate measures people are willing to use to buy a home.

According to the survey, prospective home buyers are feeling the pain of a booming real estate market. The top worry among Americans who plan to buy a home someday, if they were to buy a home in 2013, is that mortgage rates would rise further before they buy (41 percent), followed by rising home prices (37 percent). For consumers in the hottest markets – where asking home prices rose more than 15 percent year-over-year, such as Las Vegas and Oakland – buyers’ worries are even more intense for most of the concerns listed below.

Among Americans who would buy a home someday, 67 percent would use aggressive tactics to buy a home, including bidding above asking, paying the seller’s closing costs, writing personal letters, or removing contingencies, to name a few. The survey found that households earning more than $100,000 a year are more likely to offer to pay the seller’s closing costs or bid above asking, whereas lower-income households making less than $50,000 a year are more likely to borrow money from family or friends to put down 20 percent or make an all-cash offer. Young adults – many of whom are likely to be first-time home buyers – are especially aggressive in their house hunt, with 78 percent likely to do at least one of these tactics.
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Are Younger Buyers more “Real Estate Hip?”

young buyersGenerational Trends: Younger Buyers More Optimistic
Source: RISMedia.com

While eight out of ten recent home buyers say their recent purchase was a positive financial investment, the number is even higher for younger buyers under the age of 32, as 85 percent felt confident about their recent home purchase. Such generational trends were explored in an inaugural study from the NATIONAL ASSOCIATION OF REALTORS®. Younger buyers cited honesty and trustworthiness as the most important traits they were looking for in a REALTOR®.

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