Real deal: Survey: State homebuyers compromise on price, neighborhood

A recent consumer survey found low housing affordability and the
competitive market are forcing homebuyers to make compromises on
their home purchases. Buyers are settling on price, size, location
and school quality.

The California Association of Realtors 2018 State of the
California Consumer Survey found 44 percent of buyers bought a more
expensive home than they wanted. Thirty-three percent purchased a
smaller home than desired, 36 percent purchased a home farther from
school/work than wished, and 30 percent purchased in an area where
schools were of lesser quality.

“In a competitive housing market, if you are comfortable with
your choice of home and financing, it is all right to settle for
fewer preferences or amenities than you’d like. It is important
to be flexible and willing to make some compromises to get into
your new home,” said Alan Barbic, 2019 president of the Silicon
Valley Association of Realtors.

Buyers typically spent eight weeks on their home search. In the
hyper-competitive, supply-constrained San Francisco Bay Area, which
had the highest incidence of multiple offers, buyers spent a median
of 10 weeks in their home search. Buyers made a median of three
offers on other homes before having an offer accepted, but nearly
one-fourth made more than 10 offers. Those who purchased a home for
more than $1 million made five offers on other homes.

“We are seeing some added inventory, but it is not enough to
meet the demand for homes here due to the enormous job growth,”
said Barbic, who will be officially installed as president of the
local trade association on Jan. 17.

The survey found a typical first-time buyer purchased a
three-bedroom, 1,500-square-foot, single-family home. Nearly half
of those surveyed purchased a home in the suburbs. First-time
buyers selected their neighborhood primarily based on their budget
(53 percent), safety (51 percent), and proximity to jobs/school (38
percent).

Repeat buyers typically purchased a larger three-bedroom home
with a median 1,700 square feet. Three in four purchased a
single-family home.

Millennials tended to buy homes with a median of 1,500 square
feet and a median price of $350,000. Most millennials were more
likely to purchase a condominium or townhome in a suburb (43
percent) and selected the neighborhood on budget (52 percent),
safety (49 percent), proximity to jobs/schools (40 percent) and
family/friends (33 percent).

Most Gen Xers selected a home in the suburbs with a median of
300 square feet greater than their previous home. Most purchased a
single-family home, and nearly 20 percent purchased a
townhouse/condo.

Most boomers purchased a single-family home in the suburbs
without stairs, or a home in a rural area, since many of them are
approaching retirement age and planning to age in their home and
seek a quieter lifestyle.

The online survey was conducted between May 9 and July 9, 2018,
with 6,144 participants. For the buyers section, respondents were
1,441 buyers who purchased a California home within the previous 18
months.

Information provided in this column is presented by the Realtor
members of the Silicon Valley Association of Realtors at
www.silvar.org. Send questions on any topic to
rmeily@silvar.org.

Source: FS – All – Real Estate News 1
Real deal: Survey: State homebuyers compromise on price, neighborhood