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Studies Show: Housing Prices More Sustainable And Stable; Children Influence Homebuyers

Written by on Thursday, 29 May 2014 1:10 pm
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It looks like the double-digit housing price gains that catapulted some homeowners out from under water, may now be slowing. Housing experts say that's good news because it creates a sustainable and stable market, according to the Standard and Poor's/Case-Miller's 20-City Index report.

With more homeowners no longer owing more than the loan and some even seeing growing equity, there is an attitude of growing consumer confidence. Reports indicate that for the first time in a long while, consumers are more optimistic about their own personal financial wealth.

Foreclosures now represent a smaller percentage of sales and investor interest in higher priced homes has somewhat cooler. The majority of buyers today are return buyers; only 30 percent are first-time buyers, according to the National Association of Realtors.

Housing prices jumped in markets like San Diego which saw nearly a 20 percent gain from March 2013 to March 2014. Today, less inventory and slightly softer housing prices, experts say, will help prevent another bubble.

Still, 6.5 million American homeowners remain under water - (mortgage balance higher than home's value). The slight slowing in price escalation is delaying their ability to see equity in their homes.

The gradual rise of interest rates has also caused buyers to pull back and evaluate whether now is the time to buy. But this past April, the number of sales of existing homes rose modestly. This was the first increase in four months.

Another study by Coldwell Banker Real Estate showed that other factors such as children play a large influence on parents' decision to buy or to move to a new home in a different location.

The Millennial Parents (ages 18 - 34) reported that they would put priority on their child's needs before they made a decision to move to a new location. The Gen X (age 35 - 49) parents feel the same way.

The main concern, from the majority (67 percent) Millennial Parents and (64 percent) Gen X Parents, is to ensure that the neighborhood and overall location have a positive impact on their child's emotional health. In contrast, only 52 percent of Baby Boomer Parents would consider moving based on their child's welfare. This group also was less concerned about how a move would emotionally impact their child.

The higher level of concern by these two younger generation parent groups could be a little too protective. Psychologists say that while moves can be stressful for children, they also can be beneficial in teaching them to adjust and cope with life's changing circumstances.

Finally, realtor.com finds that people can have a "crush" on a home during the house-hunting process. The study found this to be true more often for women than men. Women fell in love with open floor plans whereas men seemed to go gaga over curb appeal. The survey questioned 1000 people and 69 percent of them admitted that during their house shopping, they had a crush on a home. Women tended to fall for homes "out of their financial league" more then men. Men seemed to fall for a new home a week.

Hmm…seems that this report could fuel some good material for jokes on the late night shows. In the case of buying a home, be sure your "crush" turns into a true love before you close escrow.

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  About the author, Phoebe Chongchua

Individual news stories are based upon the opinions of the writer and does not reflect the opinion of Realty Times.
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