Home resellers are more optimistic about repurchasing a home than in the past few years, thanks to strong growth in home prices, record-low interest rates and better personal financial situations, according to the California Association of Realtors’ (CAR) “2013 California Home Sellers Survey.”
More than two-thirds (69 percent) of home resellers purchased a home after selling their previous residence, up from nearly half (47 percent) in 2012, and from only 12 percent in 2011.
“Much-improved housing market conditions in the last year have given sellers more confidence to own a home rather than to rent one,” said CAR President Kevin Brown.
“With sellers being more positive about the future of home prices, the vast majority of sellers who are currently renting plan to buy again in the future," he said. "In fact, 70 percent of resellers who are currently renting said they would purchase another home, up from 22 percent in 2012.”
Nearly half of resellers (43 percent) believe that home prices will rise in one year, compared to just 9 percent in 2012, and nearly three of five resellers (58 percent) believe home prices will increase in five years, up from 12 percent in 2012.
The reasons for reselling changed in the past year.
In 2012, the majority of resellers sold primarily because of financial difficulties, but as home prices surged, a desire to trade up became the top reason in 2013.
Others wanted to take advantage of low interest rates to finance their next home, and some resellers believed the price of their home had peaked and wanted to cash out.
Heightened market competition in 2013's first half led to an increase of multiple offers, nearly all home resellers (98 percent) said they received multiple offers, up from 83 percent in 2012.
On average, each home resale received 5.9 offers in 2013 compared to 3.1 offers in 2012.
Fierce market conditions also led to bidding wars, with nearly half (45 percent) of all resellers receiving offers higher than the asking price.
In fact, more than one-third (37 percent) received three or more offers above asking price. Resellers, on average, received 2.2 offers above asking price.
The Internet continued to be the most common resource (51 percent) for resellers to find an agent.
One-fourth of resellers used the agent with whom they had previously worked, up significantly from just 3 percent in 2012.
Website listings were an integral part of the selling process, with more than two-thirds of resellers finding Realtor.com as the most important website in the selling process.
Social media is playing a larger role in the home-reselling process.
Nearly three-fourths (74 percent) of resellers incorporated social media into the selling process, up from only one-fourth (24 percent) in 2010.
Resellers used social media sites such as Facebook (83 percent); Twitter (52 percent); YouTube (39 percent); LinkedIn (24 percent); and Yelp (19 percent) to learn more about their agents or to communicate with them.