A competitive housing market and low housing affordability is forcing California homebuyers to make compromises in their home purchases, including price, size, location and school quality, according to a survey released today by a Los Angeles-based Realtors group.
The California Association of Realtors’ 2018 State of the California Consumer Survey determined that 44 percent of buyers bought a more expensive home than they wanted, 33 percent purchased a smaller home than desired, 36 percent purchased a home further from school/work than wished, and 30 percent purchased in an area where schools were of lesser quality.
“Well-qualified homebuyers understand that buying a home can be challenging in a competitive housing market environment and they may not be able to buy the ideal home they want,” said incoming CAR President Jared Martin. “Instead of finding a home that’s a perfect fit, they are finding a home that’s a good enough fit.”
The survey was conducted online between May 9 and July 9. Of the 6,144 respondents, 1,441 had purchased a home in California within 18 months preceding their survey participation.
According to the survey:
— Buyers typically saved for five years, and nearly a quarter of those who purchased a home priced $1 million or higher saved more than 10 years. Baby boomers were more likely to use the proceeds from the sale of a previous home since many were repeat buyers, while millennials were significantly more likely than Gen Xers or boomers to use funds received from parents or family or a gift for their down payment.
— California’s costly home prices gave nearly one in three homebuyers cause to consider purchasing in another state, but they ultimately stayed because they liked the city/state they currently lived in or because of their job, family or friends. Younger buyers and first-time buyers were more likely to consider leaving the state. With the state’s housing prices at 161 percent above the national average, California’s high housing costs are the biggest factor hurting young, middle-class, often minority families, according to CAR.
— Buyers typically spent eight weeks on their home search, and nearly one in three spent 13 weeks or more. Generally, the more competitive the housing market is, the longer it takes to find a home.
— 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, with the ultra-competitive, supply-constrained Bay Area having the highest incidence of multiple offers.
— Homebuyers’ preferences varied by age/generation, income, and whether they were first-time, repeat or investment buyers. The typical first- time buyer purchased a three-bedroom, 1,500-square-foot, single-family home, with nearly half choosing a home in the suburbs, and two-thirds purchasing a one-story home.