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Statistics tell the housing market story
By Jean Newton
When it comes to understanding the housing market, statistics can often point the way by indicating trends and developments. The California Association of Realtors recently released a variety of statistics in its 2001 California Housing Finance Survey that provides information to Realtors and homeowners about the status of the market.
The survey, a detailed housing market study produced annually by the association, shows that in spite of declining interest rates, the percentage of first-time homebuyers was down to 35.6 percent this year from 39 percent a year ago.
"The percentage of first-time homebuyers has been trending down since 1995, when a little more than half of all homes were purchased by first-time buyers," said California Association of Realtors President Robert Bailey. "While affordability has improved somewhat in recent months, the lack of affordable, entry-level housing in most areas of the state is at a critical juncture for California."
About one-third of California households can afford to purchase a median-priced home, compared to about 60 percent for the nation as a whole, according to the association's research. While two-thirds of all homebuyers earned $70,000 or more in 2001, compared to 57.3 percent last year, the median income of first-time buyers remained unchanged for the third year in a row at $60,000. The survey, a detailed housing market study produced annually by the association, also reported that the median price of a home in California hit a record of $280,000 this year.
"While 2001 was in many respects a year in transition for California's residential real estate market, several key indicators remained virtually unchanged form a year ago," said California Association of Realtors Vice President and Chief Economist Leslie Appleton-Young. "Time on the market was unchanged at four weeks, the price discount crept up from half a percent a year ago to 1.3 percent his year, and the median price continued to climb."
Additional key findings of the association's 2001 California Housing Finance Survey include:
During 2001, the median price of a home in California hit a record high at $280,000, 16 percent above the 2000 median of $241,250.
In 2001, 60 percent of California homebuyers were married, unchanged from 2000 while 31.8 percent were single, a slight increase from 30.8 percent one year ago. Homebuyers comprised of two or more related or unrelated individuals were down a percentage point from the year before at 6.2 percent.
California home purchases in 2001 were paid for entirely with cash 8.8 percent of the time, compared to 11.9 percent a year ago.
Repeat homebuyers comprised 64.4 percent of the state's home purchasers in 2001, up from 61 percent in 2000.
The median mortgage interest rate on new fixed-rate mortgage transactions was 7.25 percent in 2001, compared to last year's 8.25 percent median.
Fixed-rate loans comprised 87.7 percent of new first mortgages issued in California in 2001, compared to 80.1 percent last year. Adjustable-rate loans comprised 7.2 percent of California's new mortgages in 2001, compared to 14 percent last year.
Mortgage bankers issued 54.4 percent of California's new first mortgages in 2001, down slightly from 55.2 percent last year.
First mortgages in California were FHA-insured or VA-guaranteed 15.7 percent of the time, compared to an 18.7 percent market share achieved by FHA/VA loans in 2000.
California buyers in 2001 purchased single-family detached homes 79.1 percent of the time. Attached homes (condominiums and townhouses) were bought by 15.8 percent of purchasers.
The median size of the typical home bought in California in 2001 was 1,600 square feet, compared to a median of 1,574 square feet in 2000.
Conducted for the first time in 1981, the California Housing Association's annual Housing Finance Survey asks California Realtors about the financing, property characteristics and buyer/seller demographics of their most recent transaction. The survey was mailed to a random sample of 10,000 Realtors throughout California asking them to provide information from their most recent sales transaction that closed escrow in the second quarter of 2001. The data provides invaluable insight into the home purchase and sale transaction.
"You need really good information, but you also need to know what's going on in the community," said Silicon Valley Association of Realtors President Alicia Tuvell of Coldwell Banker in Los Altos. "Statistics can change week to week so it's important to check in with a Realtor who lives the market day in and day out."
For instance, Tuvell sees an upswing in the current real estate market. "Our market has picked up incredibly and inventory is shrinking. It's not just because of the holidays. Many people who are buying now are taking advantage of the low interest rates."
Although there has been a lot of talk about doom and gloom in terms of housing appreciation, Tuvell said the numbers need to be put into perspective.
"When people talk about some of the higher end areas like Saratoga and Los Altos dropping 50 percent in value, they have to remember that at the height of the market there was 100 percent appreciation. This is still a great deal. In a regular real estate market seven to 10 percent is phenomenal."
To find out how the statistics apply to specific neighborhoods or communities, check out Silicon Valley Association of Realtor's website at www.siliconvalley-realtors.org. A local Realtor can provide the insight and knowledge to make sense of the statistics.
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Los Gatos, California Since 1881
