Home price declines, low mortgage rates motivating home buyers, according to C.A.R.’s “2008 Survey of California Home Buyers”
Seventy-seven percent of first-time home buyers say lower home prices played critical role in decision to purchase a home
LOS ANGELES, CA – September 19, 2008 – (RealEstateRama) — Declining home prices coupled with low interest rates prompted more home buyers to purchase in 2008 compared with last year, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2008 Survey of California Home Buyers.” Sixty-nine percent of all home buyers reported that price declines encouraged them to buy a home, while 40 percent said that low interest rates enabled them to move to a better location. Seventy-seven percent of first-time home buyers said lower home prices played a role in their decision to purchase a home.
“The housing market has confronted headwinds on several fronts since early 2007,” said C.A.R. President William E. Brown. “Lax underwriting standards that left some subprime borrowers unprepared for rate adjustments, the global liquidity crunch, sluggish economic growth, and higher fuel and food prices are some of the factors that led to the downturn in the housing market.
“As the housing market dropped sharply from record sales levels set in 2004 and 2005, and prices began to soften, home buyers dramatically changed their attitudes and behaviors towards home buying and adapted to the new housing environment,” he said.
The Internet continued to be an integral part of the home-buying process, with 78 percent of buyers utilizing it to search for a new home and find a real estate agent, compared with 72 percent in 2007. The share of traditional buyers — those who did not use the Internet during the home-buying process — decreased from 28 percent in 2007 to 22 percent in 2008.
Both Internet and traditional buyers spent considerably more time searching for a home with their agent than in previous years, a reflection of the variety of home choices available in today’s market. Internet buyers spent an average of 8.3 weeks looking for a home with their agent, an increase from 5.2 weeks in 2007, and nearly quadruple the number of weeks from two years earlier when Internet buyers spent 2.2 weeks looking for a home. Traditional buyers spent 10.3 weeks looking for a home with their agent, compared with eight weeks in 2007. Traditional buyers also visited nearly twice as many homes with their agent, averaging 23.3 homes, compared with Internet buyers, who visited 12.7 homes.
“Due to the high inventory of homes on the market, and uncertainty about the direction of home prices, buyers are more cautious and are moving at a slower pace during the home buying process than in previous years,” Brown said. “The Internet also continues to play a vital role in this process and has solidified the relationship between REALTORS® and home buyers.”
According to the survey, 72 percent of home buyers either “agreed” or “strongly agreed” that using the Internet helped them better understand the role of real estate agents, and increased their appreciation for real estate professionals and how key they are in the home-buying process. More than half of Internet buyers thought the information their real estate agent provided was more useful than the information they gathered on the Internet. None of the Internet buyers reported that the information they found on the Internet was more useful than the information provided by their real estate agent.
Other key findings from C.A.R.’s 2008 Survey of California Home Buyers include:
· Internet buyers spent significantly more time considering buying a home before contacting an agent, averaging 8.2 weeks than did traditional buyers, who spent 3.6 weeks.
· Nineteen percent of all buyers were first-time buyers, who spent on average 9.6 weeks with their agent, compared with 5.8 weeks in 2007. Repeat buyers spent 8.5 weeks with their agent in 2008, versus seven weeks in 2007.
C.A.R.’s “2008 Survey of California Home Buyers,” formerly the “Internet vs. Traditional Buyer Survey,” is available for purchase for $29.95 in electronic format at http://www.clarusresource.com/datamine. The survey is no longer available in hard copy format. Journalists who would like a complimentary copy of the report should e-mail markg (at) car (dot) org or call (213) 739-8304.
Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with nearly 175,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
