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Survey shows home buyers more optimistic about market 25% say prices will rise in one year; 41% think it will take 5 years BY JEB BING
In a sign of an improving housing market, California home buyers are more optimistic about the housing market now than they were three years ago, according to the California Association of Realtors’ “2012 Survey of California Home Buyers.” More home buyers this year believe that home prices will rise, with 25% saying prices will rise in one year; 41% saying they will rise in five years; and nearly three-fourths of buyers (73%) believing home prices will rise in 10 years. This compares to only 8%, 35%, and 60%, respectively, in 2009, when the question was first asked. The survey also found that the mortgage interest deduction is extremely important to home buyers across all income levels and age groups, with 79% of all home buyers saying that the mortgage interest and property tax deductions are “extremely important” in their decision to purchase a home. When broken out by income levels, the findings were similar across all income levels, with 80% of those earning less than $100,000 annually; 78% earning between $100,000-$199,999;
and 81% earning more than $200,000 annually saying the deductions were “extremely important” in their buying decision. When broken out by age group, the deductions were equally important to Generation Y, Generation X, and baby boomers, with 76%, 82%, and 80% indicating that mortgage interest and property tax deductions were “extremely important,” respectively, when deciding to buy a home. “It’s clear that home buyers at all income levels and ages value the tax deductions associated with purchasing a home,” said CAR President Don Faught of Pleasanton. “The mortgage interest deduction plays an important role in buyers’ monthly budgeting. Without this tax advantage, housing affordability would be negatively impacted and potentially price out many would-be buyers.” Additional findings from CAR’s “2012 Survey of California Home Buyers” include: ■ Buyers also cited price decreases (45%), the desire for a better location (12%), and favorable prices/financing (11%) as reasons for purchasing a home. ■ None of the buyers felt that prices would drop in the future, which echoes
Page 22ÊUÊDecember 21, 2012ÊUÊPleasanton Weekly
a jump in the consumer confidence index from 37.38 in January 2009 to 73.7 in November 2012. ■ In a sign of tighter lending standards common today, buyers experienced extreme challenges in obtaining financing. On a scale of 1 to 10, with 10 being extremely difficult, buyers rated their difficulty in obtaining financing at 8.5 on average, up from 8.0 in 2011. ■ Higher down payments are the norm for the market these days, with buyers putting an average of 25% down on their home purchase. The average down payment has been higher than the traditional 20% since 2009, when the question was first asked. ■ 93% of buyers obtained a fixed-rate loan, up from 84% in 2011, reflecting buyers’ need for certainty as the market gets back to basics. The 2012 CAR Home buyer survey was conducted by telephone with 800 people statewide to measure their perceptions of the home buying process. Eligible respondents all closed escrow on their new homes within the six months prior to August 2012. For the full report on the survey findings, contact carmenh@car.org. N
OPEN HOMES THIS WEEKEND
Danville 3 BEDROOMS
404 Old Orchard Ct Sun 2-4 Alain Pinel Realtors
$448,500 314-1111
Livermore 2 BEDROOMS
173 Heligan Ln Sat/Sun 1-4
Alain Pinel Realtors
$450,000 251-1111
SALES AT A GLANCE
Dublin Total sales reported: 15 Lowest sale reported: $220,000 Highest sale reported: $890,000 Average sales reported: $575,100
Livermore Total sales reported: 25 Lowest sale reported: $130,000 Highest sale reported: $1,435,000 Average sales reported: $491,660
Pleasanton Total sales reported: 20 Lowest sale reported: $205,000 Highest sale reported: $1,324,500 Average sales reported: $663,325 Source: California REsource