Going the Extra Miles for Dream House
The typical California home shopper will drive those extra miles to find and buy that dream house.
The mobility factor was among the key elements of a comprehensive, statewide survey taken this spring among more than 2,000 new-home shoppers and released here during the annual Pacific Coast Builders Conference.
The Santa Ana-based Great Western Real Estate Market Research and Consulting Department noted in its description of the findings:
“We are a mobile society. The majority of all home shoppers surveyed have moved at least once in the past five years. Seventy-eight percent of the first-time shoppers in Southern California have moved at least once in the past five years, while the number in Northern California is 80%.”
While Northern and Southern California shoppers would travel between 12 and 20 minutes to work for an apartment conversion, they would travel longer--between 25 and 34 minutes--to live in their preferred home, a standard lot with a single-family house.
Participants in the survey were drawn from 105 new home developments during March and April in Northern, Central and Southern California.
They included new-home shoppers and move-up shoppers, those who have previously owned a home and want to move either to a smaller or larger home or to retirement living.
The greatest influencing factors cited in the survey were tax advantages, “tired of renting,” investment potential and energy efficiency, with very little difference in percentages between the Southern and Northern California shoppers.
The survey results were heartening to most builders attending the conference.
They are enjoying a banner year in home construction, expected to be the best since 1973, even though the newest national construction statistics released last week by the Commerce Department showed a drop below the annual adjusted rate of 2 million housing units a year.
The builders, here for their annual conference and to attend educational sessions, are enjoying a year in which buyers have formed waiting lines at countless new-home projects, including creation of lotteries in some instances in Southern California in order to be fair to would-be buyers. The lottery and camp-out features this year are reminiscent of what happened 10 years ago in Orange County when the earlier boom had started in what is now the community of Woodbridge on the Irvine Ranch.
The survey showed that first-time buyers are very serious about their intentions in the existing market today where interest rates are at their lowest in eight years.
Eighty-six percent of the shoppers said they intend to buy this year. Only 14% describe themselves as “just looking.” First-time shoppers want a median square footage of 1,406 feet and move-up shoppers want a median of 1,778 square feet. This reverses the downward trend experienced between 1980 and 1985, when high interest rates prevailed, the survey pointed out.
Most would-be buyers want three- or four-bedroom houses. The median household income for first-time shoppers (shoppers who have not previously owned a home) is $39,500; for the move-up shopper it is $49,200.
The median age of the first-time shopper is 30 while that of the move-up shopper is 39.
First-time shoppers said they would pay an average of two-thirds more than their current rent to own a home, and would pay an average maximum of $900 a month of a mortgage payment, up $360 from the current average rent of $540 per month. That desire may be wishful thinking but it does indicate the strength of the market and the real desire of people to buy that first home, builders said.
For most shoppers throughout the state, it would require a two-paycheck family to buy a home. More than 60% of both Northern and Southern Californians have more than one source of income, the study showed.
Gas was overwhelmingly preferred as an energy source over electricity for water and space heating, cooking and clothes drying in Southern California. In Northern California, electricity has had greater acceptance and actually is preferred as an energy source for clothes drying.
The most preferred items in home purchasing included ceramic-tile kitchen counters, oversized bath tubs in the master bedroom and tile entry flooring.
VCRs and microwave ovens are the common items owned among home shoppers, with 70% of those surveyed stating that they already own both those items. Thirty-two percent own cordless phones, 31% have home computers, 30% own exercise equipment and 19% have large-screen televisions.
The study, prepared by the real estate firm, is called the Tenth Annual Insight ’86 and is available in book form, complete with separate sections for first-time and move-up buyers. It includes computer printouts, charts and a written summary of the results.
The survey showed that by far the single-family detached home is the preference among both groups. Row town houses were second, while manufactured homes ranked third.
Apartment conversions to condominiums ranked last, with only 1% of each group saying they would consider them for purchase.
The cost is $75 and is available from Great Western Real Estate, 1901 4th St., Santa Ana, Calif. 92705.