Lake Tahoe
Real Estate News - July 7, 2004 |
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| C.A.R. SURVEY FINDS HALF OF ALL CONSUMERS USE
INTERNET WHEN BUYING HOME More than half of all consumers now use the Internet when buying a home, according to a survey released last week by C.A.R. The "2004 Internet Versus Traditional Buyer Study" also revealed that, compared to traditional buyers, Internet buyers spent more than twice as much time gathering information prior to contacting a REALTOR®. However, they moved much more quickly once they began to work with a REALTOR®, spending significantly less time with them and previewing far fewer homes compared to traditional buyers. "The Internet has complemented rather than diminished REALTORS®' role in the homebuying transaction," said C.A.R. President Ann Pettijohn. "While Internet buyers considered online information to be valuable, they ultimately turned to REALTORS® both for their interpretation of that information, and for their expertise and judgment throughout the homebuying process. The expertise and professional advice provided by REALTORS® creates value over and above the market and property information itself, even when the buyers obtain that information on their own." For the first time since C.A.R. has been conducting the "Internet Versus Traditional Buyer Study," more than half of the respondents were classified as Internet buyers. The share of buyers using the Internet reached 56 percent in 2004, and has risen steadily from 28 percent in 2000, the first year of the survey. By comparison, traditional buyers have made up a declining share of all buyers, down from 72 percent in 2000 to 44 percent in 2004. The average number of homes previewed by Internet homebuyers has decreased steadily in the past four years, while that of traditional buyers has changed very little over the same period. The upfront research conducted by Internet buyers has given them a better sense of market conditions compared to traditional buyers, enabling them to act more quickly to find, bid on, and close escrow on the home of their choice. NAR SURVEY SHOWS HIGHER PROFITABILITY FOR R.E. FIRMS IN 2003 Six out of ten real estate firms report higher profitability in 2003 compared to the previous year, according to NAR's Profile of Real Estate Firms report released last week. About 54 percent of realty firms expect greater profits this year, and another 32 percent believe profitability in 2004 will be equal to 2003. One in eight firms increased spending on technology by at least 25 percent last year, while one-third plan to increase technology spending. "Technology is playing an increasingly important role for both consumers and real estate professionals," said NAR President Walt McDonald. More than six out of ten real estate firms said the harnessing of technology was most effective in helping to generate sales and enhance profitability. The survey also provides an inside look at the demographic and business characteristics of the nation's real estate brokerages. The typical firm is a single-office operation specializing in residential brokerage. More than three out of five firms have been in the business for over 11 years. More than one-third of franchised real estate firms have been affiliated with their franchise for over 10 years, and 43 percent of firms have relocation departments. Larger firms tend to engage in a wider variety of real estate specialties and often hold a business interest in related non-brokerage activities, according to the report. FLOOD INSURANCE LAW SIGNED BY BUSH President Bush signed the Flood Insurance Reform Act of 2004 on June 30, extending the program through 2008 and eliminating the need to reauthorize the program every year. The bill reauthorizes the National Flood Insurance Program (NFIP), administered by the Federal Emergency Management Agency (FEMA), to provide flood insurance for policy holders and homebuyers looking to obtain mortgages in flood-prone areas. Forty million dollars was added to this year's bill for mitigation activities to allow families that have lived through several floods and suffered substantial harm to either flood-proof their homes or be bought-out. This in turn could save taxpayer money by getting those homeowners off the repetitive loss list and by possibly saving lives. MORTGAGE APPS INCREASE NEARLY 20 PERCENT The Market Composite Index of mortgage loan applications, a measure of mortgage loan applications, increased by 19.5 percent to 687 on a seasonally adjusted basis for the week ending July 2 from 575 one week earlier, according to a report released today by the Mortgage Bankers Association (MBA). On an unadjusted basis, the Index increased by 19.2 percent for the week ending July 2 compared with the previous week but was down 34.1 percent compared with the same week one year earlier. The refinance share of mortgage activity increased to 35.8 percent of total applications for the week ending July 2 from 33.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 34.1 percent of total applications for the week ending July 2 compared to 33.9 percent the previous week, according to the report. BABY BOOMERS EVOLVING INTO SANDWICHED GENERATION The Baby Boomer generation is sending their children off to college and re-discovering "alone time," but many are not expecting it to last long, according to recent survey by homebuilder Del Webb. In fact, 25 percent expect their children to move back in with them. It won't be a free ride for about 28 percent of the so-called "boomerangers," the offspring of the Baby Boomer generation that left for college and returned to live with their parents, as their parents plan to charge them rent. Of those polled, 15 percent already have their children living at home. Nationwide, more than 25 percent of Americans aged 18 to 34 live with their parents, according to U.S. Census figures. And according to a job search Web site, 62 percent of college students say they expect to live at home after graduation. The Del Webb survey reported that 65 percent of boomers would "be happy" to help if their grown kids needed to move back in, while nearly 23 percent said they would feel obligated to help. And then there are the in-laws. The same survey found that 24 percent of boomers anticipate that their parents or in-laws will move in with them, making them a sandwiched generation, as they host children and parents. About half say they are happy about it, and the majority feel obligated to help. The survey also found that the influential boomers will be looking to purchase homes in multi-generational communities to accommodate their families. HIGHER INTEREST RATES WON'T HURT HOUSING, SAYS NAR FORCAST Interest rates are rising due to healthy economic growth and won't dampen the general strength of the nation's housing market, according to a recent NAR report. "The reason interest rates are higher is that we are in a growing economy rather than dealing with inflationary pressures," said NAR Chief Economist David Lareah. Corporate profits are up 40 percent from two years ago, so companies are spending and jobs are being created at a strong pace. Mortgage interest rates will remain favorable in historic terms for the foreseeable future. But a major concern is how lower-income homebuyers will be affected by a rise in financing costs, although the improving job market might provide the means for decent housing for the lower rungs of the housing ladder, according to NAR. NAR forecasts existing-home sales to hit a record 6.31 million units this year, up 3.4 percent from 2003. New-home sales are expected to rise 6.4 percent to 1.16 million in 2004, also a record. The median existing-home price is projected to rise 6.7 percent this year to $181,500; the median new-home price nationwide should reach $209,600, up 7.9 percent from 2003, according to NAR. C.A.R. Newsline is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 135,000 REALTORS® statewide. |
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