After back-to-back years of sharp declines in sales, the California housing
market bounced back in 2008 with a 27 percent increase in sales. The
increase was due in large part to the growth in the absorption of
distressed properties, which comprised over half of the sales. With deeply
discounted distressed sales flooding the market, prices have dropped
significantly since early 2008. The accumulation of foreclosures, REOs, and
short sales will continue to put downward pressure on home prices, until
mortgage problems begin to subside in the second half of 2009. Despite
their negative impact on home owners’ equity, the decline in home prices,
combined with historically low mortgage rates, have dramatically improved
housing affordability and have created opportunities for home buyers.
The Survey of California Home Buyers is the 10th annual CALIFORNIA
ASSOCIATION of REALTORS® (C.A.R.) buyer survey that details how home buyers
have changed their behaviors in recent years to adapt to the new housing
market environment and to the increased use of the Internet in the real
estate business. Some of the key findings include:
• Distressed sales made up more than half of sales in California.
According to results from the survey, 49 percent of all buyers bought a
home through a regular market sale, 38 percent bought an REO/bank-owned
property, and 13 percent bought a short-sale property.
• Home buyers, in general, were optimistic about the future direction
of home prices in their neighborhood. While fewer than one in ten believed
prices would go up over the next year, one-third believed prices would go
up in the next 5 years, and 60 percent thought prices would go up in 10
• 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 a high average level of difficulty in
obtaining finance of 8.1.
• A recent study by the CALIFORNIA ASSOCIATION OF REALTORS® suggests
that the financial benefits of owning a home outweigh that of renting for
first-time buyers. For a first-time buyer household that purchases an
entry-level home between Jan. 1 and Nov. 30, 2009, the overall tax
liability savings in the first five years of homeownership is well over
$11,000 when compared to renters.
• When asked why they were satisfied with their agent, home buyers
continued to cite “always quick to respond” (73 percent) and “negotiated
good deal on their behalf” (61 percent) as the top two reasons.
• Home buyers needed the most help with price negotiation (36
percent), determining prices for comparable homes (24 percent), finding the
right home to purchase (21 percent), negotiating the purchase of distressed
property with banks (18 percent), and negotiating the terms of sale (2
• Home buyers offered some suggestions to agents on how to improve
their services. Home buyers would like their agents to improve the speed of
communications (33 percent); provide references for lenders who will
perform (32 percent), become more knowledgeable on how to deal with banks
on REOs, short sales, and other distressed properties (32 percent),
demonstrate the ability to negotiate aggressively for buyers (31 percent),
and provide references for lenders who will recommend the best product for
the buyer (28 percent).
To order the full report (2009 Survey of California Home Buyers - FORMERLY
NAMED Internet vs. Traditional Buyer Survey) contact our customer service
department at 213.739.8227, or go to http://www.clarusresource.com/datamine.html.