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California luxury home buyers prefer hilltop over ocean-front, survey says

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Luxury home buyers in California preferred hilltop homes over ocean-front properties by a margin of four to one, according to the California Associations of Realtors’ “2013 Luxury Real Estate Consumer Survey.”

Forty-one percent of buyers who bought luxury homes (homes priced above $1 million) last year, purchased a home with a hilltop view, compared to 10 percent who bought an ocean-front home. Hilltop homes outranked ocean-front homes and ocean-view homes combined (38 percent).

Buyers also purchased luxury homes located near a golf course (16 percent), in mountain areas (12 percent), in resort areas (9 percent), on lake-fronts (4 percent), and at ski resorts (1 percent).

The vast majority (79 percent) of luxury home buyers said they purchased the home as a primary residence; 10 percent purchased the home as a vacation or second home; 9 percent purchased the home as an investment or rental property; and 2 percent cited “other” reasons.

One-fourth of luxury home buyers said the main reason they purchased a home was because they wanted a larger home, compared to traditional buyers (23 percent) who said they were tired of renting as the primary reason for purchasing a home.

More than a third of all luxury buyers (35 percent) were able to pay all cash for their property, compared to 27 percent of traditional buyers, and 11 percent of first-time buyers.

Luxury home buyers also made higher down payments (30 percent of the sale price) than traditional buyers (25 percent), and as a result had less difficulty in obtaining financing than traditional buyers. On a scale of 1 to 10, with 1 being “very easy” and 10 being “very difficult,” luxury home buyers rated acquiring financing difficulty at 3.7, compared to 8.6 for traditional buyers.

While luxury home buyers spent less time looking for properties (five weeks) compared to traditional buyers (10 weeks), luxury buyers looked at more properties (10 properties) than traditional buyers (eight properties) before purchasing the home.

Buyers of luxury properties tend to be more optimistic than traditional buyers, with more than seven in 10 (71 percent) luxury buyers saying they expected home prices to increase in one year, compared to 36 percent of traditional buyers.

Luxury home buyers said they intend to keep the property for a median of 10 years, compared to six years for traditional buyers.

Fifty-seven percent of luxury buyers were single, compared to 37 percent of traditional buyers who were single.

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