RISMEDIA, April 15, 2008-First-time home buyers accounted for nearly one-half of all new and existing home sales in many areas of the country during the first quarter of 2008, according to HouseHunt’s “Current Market Conditions” random survey of member-agents. Historically, first-time buyers represent about one-third of all buyers.
The latest national survey showed first-time buyers at 46%, an increase of seven percentage points over the fourth quarter of 2007 and 12 points higher than the third quarter of 2007.
Much of the first-time buyer activity in the first quarter was reported in the West (up 17%), Texas (up 26%), California (up 25%) and Florida (up 12%). A decrease of 22% was reported by member-agents in the Chicago metro area.
“Stepped up activity by first-time buyers around the country is not surprising, given widespread home price declines from foreclosures and other negative market pressures,” said Michael Bearden, president and CEO of HouseHunt, Inc. “Our member-agents say they are receiving record numbers of Internet leads from people looking for homes, so the pent-up demand is there. Many of these leads are being converted into sales. The challenge is to convince sellers sitting on the sidelines that they have to reduce the price of their homes to be able to purchase another home — also at a reduced price — and at favorable financing rates.”
Here’s a sample of HouseHunt member-agent reports in the first quarter:
Diane Ash of RE/MAX Central in Bear, DE, exclusive HouseHunt member-agent for several territories in the Middletown area, reported that first-time buyers are taking advantage of the state’s bond program to reduce sales price and/or down payment requirements. “Our typical buyer is 25-30 years old looking for a townhouse or smaller property listed under $250,000.” Average price home is $300,000. Average time on the market is more than 120 days, she said.
Lisa Bonavia of Superior Real Estate Group in Fort Worth, TX, exclusive HouseHunt member-agent for suburban Saginaw, also reported increased first-time buyer activity, mostly from Internet leads and from renters. “Our market has been improving since January. I live in the Saginaw area and do most of by business there.” On average, she said that sellers are getting 90-95% of asking prices. Average home price is $150,000.
Mary Ann Lightfoot-Guliford of Realty Group One in Las Vegas, NV, exclusive HouseHunt member-agent for Desert Shores in the Summerlin area, said she has experienced a recent upturn in sales activity.
“A lot of first-time buyers are taking advantage of lower prices and lots of properties to choose from, and the willingness of sellers to negotiate,” she said. “The real challenge is obtaining credit and financing. Our typical first-time buyers are young couples with one or two children, and are probably employed as service workers by the hotels and casinos.” Average home price is $250,000, which is down 15-20% in the past year.”
Bill Andria of CENTURY 21 Scheetz in Carmel, IN, exclusive HouseHunt member-agent for Zionsville and Eagle Township in the Indianapolis metro area, noted many buying opportunities in his territories of upscale homes. “Our inventory of unsold homes is starting to come down from the 18-month supply we had not too long ago. Foreclosure activity is also slowing down,” he said. He estimated that 70% if his sales are move-up buyers and the remaining 30% are transferees. Average home price is $275,000. He said sellers are getting 90-95% of asking prices, on average.
Encouraging news is also found in new national housing data.
HouseHunt’s Bearden pointed out that more than $110 billion in adjustable rate mortgages reset in March. There are $92 billion due to reset in April, $76 billion in May and $75 billion in June before declining steadily until they reach a more normal $17 billion in December. “This means that we’ve probably passed the peak, and should this decline in foreclosure activity continue this fall, homes should begin sell faster from that point forward.”
Lawrence Yun, chief economist for the National Association of Realtors, is also cautiously optimistic the worse is over: “Existing home sales could start to show a sustained increase within a few months, barring additional economic problems. The wider access to affordable credit should increase sales activity, notably this summer as pent-up demand begins to be met.”
Preliminary industry figures for February show a 9.6 month supply of unsold homes in the U.S., a small decline from January. A six-month supply is regarded as balanced between buyers and sellers.
The latest HouseHunt quarterly survey of member-agents showed:
Average Buyer-Seller Ratio — Sellers outnumber buyers by a 55% to 32% ratio, with 13% reporting that it’s about even. This compares to a ratio of 59%-27%-14% in the fourth quarter of 2007. Biggest regional improvement favoring buyers was reported in Texas, which jumped from 29% to 48%.
Average Time on the Market – Sixty-six percent of member-agents said it now takes more than 90 days, on average, to sell a home in the U.S., an increase of five percent from the previous quarter. Major increases were also reported in Texas (up 21 points to 52%), the Midwest (up 10 points to 86%) and the Northeast (up 9 points to 62%). Reporting declines were: Chicago metro (down 27 points to 67%); Florida (down 18 points to 67%), and the South (down 11 points to 73%).
Average Sales vs. Asking Price — Fifty-two percent of member-agents reported that 48% of sellers across the country are getting 95% or more on average, of their asking prices, a decrease of six percent from the previous quarter. Florida reported a gain of 12 points to 31%. Sellers in regions getting less than 95% of asking prices, on average include: Chicago metro ( 63% ), the Midwest (52%), and Texas (52%).
Annual Price Appreciation – Only 43% of member-agents reported positive or unchanged annual price appreciation, on average. This leaves 57% reporting negative appreciation, an increase of five percent in a quarter. Seventy-two percent of member-agents in the Northeast region reported negative appreciation, an increase of 29%. In contrast, only nine percent reported negative appreciation in the Texas region.
Multiple Offers – Member-agents in the U.S. reported that 32% of sellers are getting are getting more than one offer, an increase of 11 points. Other gainers include Texas (up 25 points to 55%) and the West region (up 18 points to 39%).
Unsold Inventory – Fifty-five percent of member-agents in the U.S. reported that the inventory of unsold homes is up over the past year, a decrease of eight points. Twenty-one percent reported that is was down and the remaining 24% said it was unchanged. Regions reporting lower inventory numbers included: California and Florida (each down 19 points), the Northeast (down 15 points) and Chicago metro (down 11 points).
For more information, visit www.househunt.com.