August 26, 2015
Homeowners caught in affordability squeeze, are staying put, REALTOR® survey finds
LOS ANGELES (August 26) – Even with rising home prices over the past few years, many homeowners who have considered selling are deciding not to because they are caught in an affordability squeeze that is compounded by a lack of inventory, according to findings from the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) "2015 Survey of California Homeowners."
More than one-third (35 percent) of homeowners have considered selling their home in the past year, and of that share, about two-thirds (64 percent) are reluctant to sell because they are finding they can’t afford the home they really want, the survey found.
C.A.R.’s inaugural Survey of California Homeowners also found that more than half (59 percent) of homeowners have not seriously considered selling their home in the past year, with more than half (60 percent) saying their current home will be their retirement residence. For those who have been in their home 15 years or more, that figure rises to 70 percent who indicated they have not considered selling because their current residence will be their retirement home.
But for others (44 percent), the affordability crunch, higher property taxes, and home prices are keeping them in their current home.
In first-quarter 2012, when housing in California was at its most affordable, a median income of $56,324 was needed to purchase a median-priced home. In second-quarter 2015, that figure jumped to $96,160, with 99 percent of that required income increase attributable to home price increases.
Sixty-one percent of all homeowners could be prompted to sell if they got the price they want for their home; 56 percent would sell if they had a gain in their home value; and 53 percent would sell if a better or equivalent house was available.
Fifty-six percent of homeowners who have considered selling said they desire a larger home; and 48 percent would sell because they desire a smaller home. Those who have owned their home less than 15 years were nearly twice as likely (66 percent) to consider selling due to their desire for a larger home than those who have owned their home over 15 years (34 percent).
Additional findings from C.A.R.’s "2015 Survey of California Homeowners" include:
• Forty-five percent of homeowners have considered moving out of state, with Texas (15 percent), Oregon (11 percent), New York (9 percent), and Arizona and Nevada tied (8 percent) as the top five states where homeowners have considered moving.
• Sixty percent of homeowners bought their home within the past 15 years.
• The median purchase price for all homeowners was $265,000, with the purchase price being more than twice as high for those who bought less than 15 years ago ($350,000) than those who purchased their home 15 or more years ago ($162,000).
• All homeowners surveyed have a median home equity amount of $200,000, and those who have owned their home more than 15 years have 60 percent more equity ($300,000) than those who bought within the past 15 years ($179,000).
• Twenty-four percent of homeowners don’t have a mortgage, and those who bought their home 15 or more years ago were more than twice as likely not to have a mortgage as those who bought within the past 15 years. The majority of homeowners with a mortgage (77 percent) have an interest rate below 5 percent.
• Twenty-seven percent of homeowners have tapped into their equity. Those who bought 15 or more years ago or were more likely to have tapped into their equity (32 percent) than those who bought within the past 15 years (24 percent), indicating a healthy market where homeowners are not overleveraged on their home.
• Nearly one-third of homeowners (32 percent) indicated a Craftsman-styled bungalow is their dream home, beating those preferring mansions by more than double (14 percent) and Neo-Colonial (19 percent). California is considered the center of the architectural arts and crafts movement and is home to the majority of Craftsman-styled housing.
• Nearly half of homeowners (45 percent) have children residing with them, with 83 percent of children being minors.
Survey of California Homeowner Slides (click links to open):
The 2015 Survey of California Homeowners was conducted online in May to more than 1,000 homeowners statewide to determine why homeowners are not selling. Access the full report on the survey findings here: http://ift.tt/1pXPAgv and view the webinar presentation here: http://ift.tt/1h8w53n.
Leading the way…® in California real estate for 110 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 175,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
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