The California Association of Realtors reports more properties were sold above their asking price this year, as tight supply conditions continued to heat up market competition in the first half of 2013.
The group’s 2013 annual housing market survey indicates nearly half (49.5 percent) of all homes sold in 2013 were sold above asking price, nearly twice the share in 2012 (25.9 percent) and triple the share in 2011 (16.6 percent). For homes that sold above the list price in 2013, the median premium paid over the list price was 4.8 percent, unchanged from 2012.
The shortage of housing supply led to heightened market competition and more multiple offers, with more than seven of 10 home sales (72 percent) receiving multiple offers in 2013, up from 57 percent in 2012. The 2013 figure was the highest in at least the past 15 years, with each home receiving an average of 5.7 offers.
More than a quarter of all home buyers paid with all cash in 2013, triple what it was in 2001 when the share was 8.8 percent. The share of all cash buyers continued to stay well above the long-run average of 15.1 percent since 1998.
Foreign buyers were increasingly interested in owning in California. The share of international buyers rose for the third year in a row, up from 5.8 percent of total sales in 2012 and 5.7 percent in 2011 to 8 percent in 2013.
More than half (57 percent) of all international buyers bought the property as a primary residence, while almost one-third (31 percent) of them purchased the property as an investment. Buyers from China, Mexico and Canada made up the vast majority of international buyers at 34 percent, 15 percent and 10 percent, respectively.
Investors were very active in California’s housing market, creating high demand for investment properties during the first half of 2013. Nineteen percent of total sales went to investors in 2013 compared to 16 percent in 2012.
As investors and first-time buyers competed intensely for lower-priced properties, the share of first-time buyers fell again in 2013 to 28 percent, after inching up slightly to 36 percent in 2012 and well below the long-run average of 38 percent.
The good news is for the third consecutive year, an increasing number of home sellers–nearly half–planned on purchasing another home in the future.
“This shows sellers have a positive outlook about the market situation and the economy. In the last few years, sellers that wanted to move could not because they were underwater or afraid they would be. They are more confident about the economy now and that will reflect in next year’s market,” said Carolyn Miller, president of the Silicon Valley Association of Realtors.
Information in this column is presented by the Silicon Valley Association of Realtors at silvar.org. Send questions to rmeily@silvar.org.
