We reached 1,692 people, of which 89 participated in the survey, which is about right.
Let’s go through each question.
Q1. Most of the participants (2/3) already live in San Diego County. The question was passive in nature, but it was interesting that 10 out of 86 people have thought about moving here!
Q2. No surprise that 2/3s aren’t moving, but stunning that the next highest category was those who are selling and leaving California! Of those who are moving, 37% are leaving the state!
Q3. (No chart) Their results chart was poorly formatted, but 10 out of 70 rated their likelihood of moving as an 8,9 or 10.
Q4. Of those who plan to move, 27% are jumping right on it in the first quarter of 2021!
Q5. Covid-19 only caused 5 people to change their plans about moving?
It’s still 7% of those surveyed, which is enough to change the outcome, especially if we had that much more inventory to sell. The tipping point is probably more like 15% to 20% additional inventory to sell – then buyers might take a step back to see where this is going.
Q6. A bit of a shocker here: Getting My Price was the least concern! It may look easy, but getting your price in 2021 will require skill and some luck. Finding the Next Home is by far the biggest concern, and if we have more inventory it could grease the wheels a bit.
Q7. Those who aren’t moving would have selected the #4 answer, but glad to see the majority believe in good help!
Others left warm thoughts appreciating the blog and the effort. It’s my pleasure – thanks for participating!
The percentage of properties selling below asking price remained flat from last year at 36%. The percentage of properties selling above asking price increased from 34% last year to 35%. The percentage of properties selling at asking price increased to 29%.
This is incredible: For the 35% of properties selling above asking price, the average premium paid over the asking price increased to 9.3% from 6.8% last month and 7.8% last year:
The share of properties that received multiple offers was 64%, down from 74% last month and 66% last year. Also, the proportion of properties with three or more offers decreased to 40%. The average number of offers per property remain at 2.8 offers from a year ago:
Fannie interviews 1,000 people every month, and then leaves it up to their ivory-tower guy to explain it to the masses. Here’s my conclusion from my own personal survey: buyers are being cautious due to prices going up so fast.
Consumer attitudes toward housing appear to have stalled somewhat amid a recent dip in confidence regarding personal finances and income growth, according to results from Fannie Mae’s March 2015 National Housing Survey™.
Among those surveyed, the share who expect their personal financial situation to improve over the next year fell to 41 percent last month, while those who said their household income is significantly higher than it was 12 months ago fell to 22 percent.
Additionally, the share of respondents who said they would buy a home if they were to move decreased 5 percentage points to 60 percent – a new all-time survey low.
On the bright side, the share of consumers who believe now is a good time to sell a home reached a new survey high of 46 percent, narrowing the gap with those reporting it is a good time to buy, perhaps signaling a more balanced housing market.
“Consumers are being patient prior to entering the housing market. Our March survey results emphasize how critical attitudes about income growth are to consumers’ outlook on housing,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “We’ve seen modest improvement in total compensation resulting from a strengthened labor market. However, income growth perceptions and personal financial expectations both eased off of recent highs, consistent with Friday’s weak jobs report. Simultaneously, the share of consumers expecting to buy on their next move has declined. We believe the recent setback in consumer sentiment should be short lived if early signs of income growth bear out and occur in proportion to expected interest rate increases. Meanwhile, the wait for housing expansion continues.”
LOS ANGELES (July 17) – Demonstrating the proliferation of mobile technology into nearly every facet of our lives, more than eight out of 10 home buyers are accessing home information on their smart phones and computer tablets, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2013 Survey of California Home Buyers.”
“With more and more consumers using mobile devices and mobile technology, such as apps and social media platforms, buyers are increasingly using their smartphones and computer tablets to view comparable house prices, search for properties, take photos, and create videos of homes and amenities, as well as research communities and real estate agents,” said C.A.R. President Don Faught. “As a result, home buyers today are more informed and have a greater sense of control over what could be a daunting process.”
The survey found 85 percent of buyers used a mobile device during the home buying process, with the majority of buyers (70 percent) accessing the Internet from their smart phones and 15 percent accessing it from their tablets.
While the majority of buyers (61 percent) found their home through an agent, the percentage who found their home online more than doubled from 16 percent in 2012 to a record high of 37 percent in 2013.
Almost one-third (30 percent) of buyers rated Realtor.com as the most useful website, followed closely by Zillow at 28 percent. Broker and agent websites were also helpful in the home buying process as buyers increasingly seek local expertise and information.
The use of social media in the home buying process continued to increase, with three-quarters of buyers now using it, compared to 52 percent who used social media in 2011. Buyers primarily used social media for buying tips and suggestions from friends (43 percent), neighborhood information (42 percent), and to view their agents’ Facebook pages (41 percent). The use of social media as a form of communication is expected to grow, with 91 percent of buyers saying they are receptive to receiving information about the home buying process from their agent via social media.
The survey also found that buyers spent nearly six months considering a purchase before contacting an agent, nearly twice as long as last year. They took more time investigating homes and neighborhoods before contacting an agent, spending just over seven months on researching, compared to about 1.5 months last year. Additionally, buyers spent nearly 10 weeks looking for a home with their agent, a week longer than last year. More than eight out of 10 buyers (85 percent) made offers on other homes, and one-third said they settled for the best option given the limited supply of houses.
“The lengthier consideration time and home search illustrates the impact of low housing inventory and increasing home prices,” said Faught. “These factors caused buyers to weigh their options more carefully before making their home purchase.”
Additional findings from C.A.R.’s “2013 Survey of California Home Buyers” include:
• Buyer optimism about the future direction of home prices continued to grow, with the majority of buyers (60 percent) believing prices will go up in five years and 36 percent seeing prices rise in one year, up from 41 percent and 25 percent, respectively, last year.
• Buyers cited price decreases (38 percent), favorable prices/financing (12 percent), and the desire for a better location (10 percent) as top reasons for purchasing a home.
• Reflecting the prevalence of tight lending standards, buyers experienced extreme challenges in obtaining financing. On a scale of one to 10, with 10 being extremely difficult, buyers rated their difficulty in obtaining financing at 8.6 on average, the highest in the survey’s history.
• Higher down payments are the market norm these days, with buyers putting an average of 25 percent down on their home purchase. The average down payment has been greater than the traditional 20 percent since 2009.
• Ninety-one percent of buyers obtained a fixed-rate loan, up from 84 percent in 2011, reflecting low rates and the desire for certainty as the market gets back to basics.
A new survey of realtors was released today (see below). Here are my answers:
1. Is Now a Good Time to Buy or Sell in Your Area?
A. It is a great time to sell, as long as you can live with today’s prices. Sure, potential sellers can believe that it’s better to wait until prices go significantly higher, but that may not happen when you want it or need it, and it may never happen.
B. It is a terrible time to be a casual buyer. Only those who buckle down and commit to seeing every new listing within the first day or two, and are willing to pay all the money for the quality buys will succeed. Another big challenge is finding an agent who can win bidding wars.
2. Do You Expect Prices to Generally Rise or Fall in the Next Year?
A. I expect that general pricing will rise 5% statistically, and be hampered by inventory shortages, arrogant listing agents, and short-sale fraud. All three are contributing to a pricing limitations, and only the first has a chance of changing. If a surge of well-priced quality homes were to hit the open market, they would be gobbled up quickly – and the resulting momentum could take prices significantly higher if the flow of new listings continued.
3. What are the Most Common Challenges for Buyers in Your Market?
A. Having a clean shot to purchase a property. The time is ripe to convert to an open auction-type format to sell properties, so buyers can at least see with their own eyes what is happening. The games being played by listing agents are impeding open bidding and market-value pricing.
4. What are the Most Common Challenges for Sellers in Your Market?
A. Shopping for listing agents based on who will quote you the highest price, and ignoring how educated the buyers are about market values.
5. Are Buyers and Sellers are Getting More Confident and Aggressive?
A. Absolutely, and they are more aggressive than the agents, who, as a result, are being left behind.
6. The Real Estate “Profession” Over the Next Five Years?
A. The agent population should decline significantly, but there will always be licensees sitting around with business cards and a facebook account hoping that something will fall in their lap. We are way overdue for a significant game-changer to shake up the industry (public-MLS), and it should set off a commission war.
Wrap-up: Those who play nice will undoubtly feel better next year, as long as rates stay ultra-low, but nicey-nice agents only get the leftovers. For those who are on the streets battling it out every day, the fight will be more competitive than ever.
See now as a good time to buy a home more often than a good time to sell one: 75% of agents surveyed described now as “a good time to buy,” while only 54% described it as “a good time to sell.”
Mostly expect price gains to be modest: Only 11% of agents expect home prices to “rise a lot” in the next year. The vast majority—76%—expect prices to “rise a little.”
Are feeling the pinch of low inventory and multiple offers: 90% of agents indicated that low inventory was one of the most common challenges facing buyers, and 91% pointed to multiple offers.
Are seeing both buyers and sellers gaining confidence in the market: 85% of agents agreed that buyers are becoming more confident about the market, and 84% agreed that sellers are becoming more confident.
Have hope for future of the real estate profession: 59% of agents believe that the real estate profession will grow in size in the next five years, 30% believe it will remain the same, and just 11% see more declines in the future.
The picture painted by the agents is one of cautious optimism. Most agents we surveyed expect modest price gains, improvements for buyers as well as sellers, and moderate growth in the real estate industry. The results line up nicely with recent gains in overall consumer confidence, which has been rising steadily through the year. No V-shaped recovery appears imminent, but rather a slow and steady trend back toward something resembling a normal market.
“That agents believe both buyers and sellers are becoming increasingly confident bodes well for sales volume in 2013,” said Redfin CEO Glenn Kelman. “Over the past five years, eager sellers have been unable to find a buyer, or more commonly in 2012, eager buyers have been unable to find a seller. But going into 2013, we expect that a jittery market will settle down, and buyers and sellers will more easily come to terms. After years of irrational exuberance, crashes, foreclosure fire-sales, inventory shocks and saw-toothed trends, the cautious, broad-based optimism we’re seeing now is the best kind of recovery we could hope for.”
An overwhelming 85% of Americans prefer homeownership over renting, Fannie Mae said in a new study. However, while this remains the prevalent attitude, economic realities still keep many from actualizing this dream.
Demographics such as income, age, marital status and employment status are still considered significant drivers in the decision of buying a home or renting, Fannie found that beliefs about housing help determine whether Americans intend to rent or buy their next residence.
“The whole world thinks about underwriting or what’s my income (when evaluating the homebuying decision), but what is driving consumers seems to fall more in this attitudinal world,” said Steve Deggendorf, one of the authors of the study. “People are thinking about this process (of buying a home) as being very deliberate, but with most people it is complex.” He even describes it as emotional, and in most cases, employing a series of subjective and objective beliefs on the consumer’s part.
Fannie produced the national housing survey based on feedback from 12,014 interviews that occurred in 2011.
When looking at feedback from Americans who already have a mortgage, 40% cited attitudes about finances—such as the ease of getting a mortgage, affordability, homeownership benefits and financial stressors—as drivers that will shape whether they buy or rent their next property. About 39% of homeowners in the same group cite attitudes about housing as influencing their next move, while 21% say demographics such as income, age, marital status, employment, race or urbanicity will be primary drivers of their next decision.
“Traditionally people tend to focus on demographics and the underwriting process,” said Li-Ning Huang, product manager and one of the report’s authors. “But everybody’s situation is different and for some current mortgage owners, the top driver is whether they can afford a new mortgage or are they qualified.”
The key drivers of homeownership change when analyzing the responses of Americans who are currently renters. With this group, the majority — or 42% — suggest attitudes about housing such as whether renting or owning makes more sense, flexibility, good or bad market timing, negative experiences and underwater status — are driving whether they rent or own their next residence. Thirty-three percent of current renters say demographics like employment, age, income and marital status also are important homeownership drivers, while only 25% cite financial attitudes as having an impact on their next housing decision.
Sixty-five percent of homeowners who own their homes outright are driven by demographic considerations such as employment, income and age. Only 17% of these homeowners cite their attitudes toward housing as a driver behind their housing decisions, while only 19% consider financial concerns as the main driver.
The takeaway from the study, according to Deggendorf, is that “for a large number of people, emotions rule.” He added, “We need to think about how they approach the housing decision and think about the kind of help that they may need (in the process).”
Even in the wake of a financial crisis with many homeowners underwater, the number of survey respondents who cite the negative financial effects of the housing crash as key drivers of their next housing decision is minimal, according to Fannie’s research team.
“We asked people whether they have ever been underwater or have been thinking about delinquencies,” Deggendorf said. “Those factors did not rise to the top of the list. It is very interesting to see those were not big drivers of the homeownership or rental decision.”
What’s keeping homeownership alive is the fact that it’s not a stock or bond, but something desirable for individuals and families to live in even without a significant return on investment. “The nonfinancial benefits that people derive from the consumption of housing mitigate the negative financial experiences that many homeowners have had,” said Deggendorf.
Still, Deggendorf and Huang believe the report suggests real estate professionals need to address the underlying attitudes that drive homebuyer decisions.
“If we helped people understand these attitudes that are driving their decision-making process, it would help them make better housing decisions,” he said.
Rather than just having consumers chase the home they dream about, a more conscious, direct approach would be to help them balance their wants against what they can afford, Deggendorf and Huang said. The research team says it’s important to educate and inform potential homebuyers since many of them may be ignoring their ability to safely buy a home, while others are potentially overbuying by listening more to their emotional desires.
Fannie’s research team believes prudential regulators also should be informed of the attitudes shaping homeownership to ensure any steps they take are in line with the consumer population.
The good news is homeownership as a goal for Americans hasn’t changed in the past six years.
“Our study shows that the negative housing events of the past few years have not discouraged people from wanting to own a home,” the Fannie study concluded. “Exposure to mortgage default, perceived home value appreciation/depreciation, and self-reported underwater status are not significant factors in the models in predicting individuals’ intentions to own a home for their next move.”
We’re up to 292 responses to last week’s survey, thank you readers!
Here are some of the comments:
I know prices are never going to be as low as I would like because of demand and bank and government collusion but I would appreciate it if Jim could focus more on properties that don’t require someone to make 250K+ a year. As a first time home buyer I would love to see more videos showing some glimmer of hope for being able to afford a home.
I’ll make an effort to include a wider range of price-points. For those looking to spend less than $400,000, the need to compromise is very demanding. Consider these three: buying a fixer, going further out, or living with something smaller, possibly a condo. The chance of you finding a decent house, in a decent area, under $400,000 around North County Coastal is remote, at best.
Could there be further market deterioration in the future? Yes, and it would likely be a result of squishdown from above. Bubbleinfo.com will help you see any potential erosion in the mid-to-upper-end market that could benefit those below.
I remarked in the last radio show that I don’t have much of a feel for the audience, given the anonymous nature of blogging and the internet. I am fine with it being anonymous, I don’t need to know who you are – but I’d like to get more input about what you want from bubbleinfo.com.
The previous survey asked for comments in general – this one has multiple-choice questions.
Can you complete my survey please? There is no obligation (no registration required), and it should only take two minutes:
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