From young, qualified first-time home buyers to 50-and-olders, moving, up, over or down, a new breed of buyer is descending upon the Silicon Valley Housing market.
They've worked hard to save, they have solid jobs and they are qualified to buy big.
But offer them what they can really afford and they'll give you the thumbs down.
They are the new financial conservatives.
They'd rather not be house poor.
They can afford much more, but they want less -- less square footage, a smaller energy bill, fewer cleaning and maintenance headaches, but most importantly, less to pay out on the monthly mortgage.
They want a simpler, smaller American Dream.
It's all about the "more" that comes with the "less."
A smaller, less expensive home means more financial freedom in terms of more cash to save, more discretionary income to spend on nights out or travels away. A smaller home also means a smaller maintenance noose around your neck.
"Since new home prices peaked in 2007, new single-family sales of homes costing more than $500,000 have been more than cut in half, dropping from 13 percent to just 6 percent of all new home transactions," said Rick Palacios Jr., senior research analysis of John Burns Real Estate Consulting.
"During this time, sales of home for under $200,000 have risen from 33 percent to 42 percent of transactions (nationwide). In fact, sales of homes priced under $300,000 now account for roughly 75 percent of all new single-family transactions. Of course, price declines and a shift to smaller homes played a role in this change, but consumer attitudes have shifted too. Our surveys and our consulting work show that today's buyer is frequently very focused on affordability, and this broad macro theme will continue to play itself out in the new home space during 2012," Palacios added.
A young couple in Silicon Valley with a combined income of $150,000 and top-notch credit can qualify for a mortgage with an debt-to-income ratio of up to 50 percent and their friends may be impressed, but the deal comes with a massive forever-property-tax-bill, uber cleaning and maintenance costs and yard upkeep from hell, not to mention massive energy bills. Home buyers are wisely saying "no thanks" to that. "We don't want house poor. We'd rather have extra money to enjoy life, travel, eat out and save a few bucks." That's a decided change from boom times when buyers wanted the biggest, baddest, most expensive home money could buy.
It's a lot like the change from the old fitness regimen of bulk and brawn to one of a more svelte approach for endurance.
Today's economy demands a meaner, leaner bucks and brains for long-term homeownership .