In 2015, more households were formed as the share of buyers who previously lived with their parents increased to 12%, according to the California Association of Realtors®’ “2015 Survey of California Home Buyers.”
That number is the highest in the survey’s history, up from two percent in 2014. Additionally, the share of those who previously rented dipped from 40 percent in 2014 to 39 percent in 2015, and those who previously owned fell from 59% in 2014 to 47% in 2015.
With distressed sales at record lows, California is returning to a more normal housing market, with those who previously went through a foreclosure or short sale returning to the market and purchasing homes again, according to the survey findings.
More than one in five home buyers, (22 percent), experienced a distressed sale, most of which occurred after 2007. A further indication of this return to normalcy is reflected in the share of buyers who were previously “underwater” on their homes, which increased to 23 percent in 2015, up from four percent in 2014.
Despite improvements to the economy and housing market, inventory continues to be a problem, according to data released this summer from C.A.R. In what could further exacerbate a future housing inventory shortage, buyers in C.A.R.’s 2015 survey on home buyers indicated that they plan to keep their home longer than ever – an average of 20 years. That is substantially longer than the six years cited by home buyers in 2012.
In 2015, it took home buyers an average of 12 weeks to look for a home – the longest since C.A.R. began the survey. It took an average of 10 weeks in 2014 and 2013 for home buyers to find a home. In a sign of less market competition, buyers made fewer offers in 2015 compared to previous years – an average of 2.6 offers, down from an average of 3.6 offers in 2014 and an average of three offers in 2013.
Buyers spend an average of 18 weeks considering buying a home before contacting a real estate agent in 2015, down from an average of 19 weeks in 2014 and a high of an average of 24 weeks in 2013. They spent an average of 14 weeks investigating homes and neighborhoods before contacting an agent in 2015, down from an average of 21 weeks in 2014 and a high of an average 29 weeks in 2013.
Seven Straight Months of Increases
California pending home sales continued to gain steam this summer, registering seven months of continued annual increases and the fifth consecutive month of double-digit increases in June, according to the California Association of Realtors®’ data.
California pending home sales were up 12.5 percent on an annual basis from the revised 107 index recorded in June 2014, marking the seventh straight month of year-to-year gains.
The share of equity sales – or non-distressed property sales – declined slightly in June to make up 92.4 percent of all home sales. Equity sales made up 92.6 percent of all home sales in May and 89.9 percent in June 2014. The share of equity sales has been at or near 90 percent since mid-2014.
Conversely, the combined share of all distressed property sales (REOs and short sales) rose slightly in June, up to 7.6 percent from 7.4 percent in May. Distressed sales made up 10.1 percent of total sales a year ago.
Ten of the 43 counties that C.A.R. reported showed month-to-month decreases in their distressed sales shares, with Alameda and Santa Clara having the smallest share of distressed sales at 1 percent, followed by San Mateo (2 percent), Contra Costa (3 percent) and San Francisco (3 percent). Glenn had the highest hare of distressed sales at 27 percent, followed by Merced and Siskiyou (both at 23 percent).
First Quarter Data
With interest rates and home prices rising in the first half of 2015, housing affordability remains an issue for many would-be buyers in the Golden State, according to California Association of Realtors®’ data that examined the first quarter of 2015.
The numbers, released in July, show that just 30 percent of Californians could afford to purchase a median-priced, existing family home. The cost of median price of a home, meanwhile, rose to $485,100 in the first half of 2015 from the $442,430 six months prior.
C.A.R.’s data also examined the annual income needed to qualify for a purchase of a median-priced home – currently at $96,160.
Reprinted with permission from the CALIFORNIA ASSOCIATION OF REALTORS®, copyright 2015, all rights reserved. For more information, visit www.car.org