While some locales may have cooled slightly due to the dot-com meltdown, the California energy crisis, an uncertain economy and other factors, California is experiencing overall increases in sales and property values, according to a new report by the California Association of Realtors.

The "2002 Market Pulse: Survey of California Home Sellers" shows that the desire for a larger ome, job changes, a desire for a better location, and changes in family status were primary reasons behind California homeowners' decisions to sell.

"Fifty-seven percent of sellers said their primary motivation for selling was the desire for a larger home, followed by 18 percent who sold due to a job change, according to our research," said C.A.R. President Robert Bailey. "With the median home price in California increasing 25.5 percent in May (from May 2001) to $321,130, it's no surprise that 85 percent of homeowners cited recent increases in home prices as an external factor in their decision to sell. Moreover, 82 percent cited anticipated future increases in home prices as a reason they were selling."

The report, based on responses by recent home sellers, also showed that 17 percent of sellers desired a better location, with eight percent selling their homes because of changes in family status.

The report also listed external factors in their decisions to sell which included recent increases in home prices (85 percent), anticipated future increases in home prices (82 percent), recent low mortgage rates (65 percent), anticipated future increases in mortgage rates (30 percent).

According to the report, not a single home seller surveyed believed that prices in California have peaked.

Seven out of ten (68 percent) home sellers considered the current housing market to be a seller's market, while only three percent believed it to be a buyer's market. Twenty-seven percent believed the market to be neutral, while four percent were unsure.

Sellers' primary concerns with the home selling process were the sales price, time on market, and the list price. Even though sellers were optimistic that the market would continue to improve, 91 percent said they were concerned about receiving the best price for their homes. Eighty-three percent were worried about how long it would take to sell their homes, and 67 percent said setting the list price of their home was a major area of concern. One-fourth worried about the cost of the sales transactions, and twenty one percent were concerned about the terms of the sales transactions.

Published: July 11, 2002

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