Some breakthrough good news has come to light. It deals with first-time home buyers.
Across the U.S., first-time home buyers have been staging a disappearing act for a
worrisome long time. The causes were pretty universal across much of the country: a sluggish
economic recovery and tight labor market contributed to the national phenomenon. Rises in
Los Angeles residential prices haven’t helped those seeking to become new homeowners locally.
For Beverly Hills homeowners who follow such things, the phenomenon was slowly
becoming a worrisome fact—one that didn’t look like it was going away anytime soon. When you
own a home, its value as collateral and at sale depends on a healthy real estate market—one that
supports sustainable activity.
That means that new buyers should appear in numbers at least equal to those who seek to
sell and move on. If fewer and fewer new buyers appear...well, that can’t be good over the long
haul. The fact that the percentage of first-time home buyers had been dwindling for three straight
years was the statistical equivalent of fingernails on a blackboard.
The new edition of the National Association of REALTORS’ 2016 Profile of Home Buyers and
Sellers is the annual compilation of activity across the nation. The Profile has been a yearly fixture
since 1981, making it the longest-running continuous series of measurements of who is buying and
selling residences in the United States. If you are taking a reading of the market, it’s one of the
most valuable gauges out there. But even before the recent reports of returning economic
optimism, it’s now clear that a reversal had been underway for a while. This latest Profile marks a
turnaround in first-timer activity: they’re back.
Los Angeles real estate watchers were already well aware of the continuing gradual rise in
U.S. home prices, but the new information shows a bounce back toward a more normal market
makeup. A second move in that direction also surfaced: the proportion of single female buyers,
which also had been on the decline, showed a return toward normal. According to this year’s
report, their numbers increased to about 17% of total purchases (not including investment and
vacation home purchases). That is slightly more than twice the number of single male
buyers—which is close to what is normally expected.
For first-time home buyers as well as others in all categories, the majority given for
choosing homeownership was a traditional one: the appeal of owning a place of their own. Also
frequently cited was “renter fatigue”—a phenomenon that surfaces whenever homeowners are
seeing their equity on the rise.
This all comes as cheering news as we head toward the new year. If 2017 looks to be a year
when your own Beverly Hills real estate plans come into focus, I hope you’ll consider giving me a
call to discuss how I can help turn those plans into reality!