2012 Cotton Report Finds Bottom of Market Reached in 2011
For the past few years since the crash, speculators have been trying to predict the bottom of the market. Well, according to the February 2012 report by Cotton & Company-an industry leader in residential real estate, that point has passed and all signs are pointing towards an upswing. We are seeing some of these signs here in our real estate market here in Santa Clarita.
“For those who have been waiting to make their move, trying to time the bottom of the market, they may have already missed it,” says Stephann Cotton, President and Founder of Cotton & Company. “2011 saw rapid absorption of distressed inventory in major markets like Miami and San Diego. The Cotton Report’s market data supports this growing perception, with a steady reduction in the number of investors actively in the market and fewer buyers expecting for further price reductions.” The market statistics combined with reduced inventory levels spell good news for real estate developers with projects in the pipeline preparing to meet the pent-up demand from the market rebound.
2012 Cotton Report Findings
— 54% of the market is seeking primary housing, rising sharply from 38% a year ago
— 32% of the primary market is “Upsizing”, reversing the trend for smaller residences
— 66% of vacation home buyers are moving for “Geographic Relocation”, with 68% of this market ages 45-64 years old
— 33% must sell their current home to make a move, a reduction from 42% a year ago
— Only 12% of survey participants state “Investment/Rental Income” as their motivation, continuing a four-year steady decline from 23% in 2009.
— 53% of the respondents with over $100,000 household income believe we have reached the bottom of the market
For the first time in its history, The Cotton Report also analyzed the impact of technology on the real estate sales environment. Although the Internet captures 70% of the market as the initial research tool for available homes, newspapers rebounded from 3% share in 2009 to 8% in 2011, a further indicator of the primary market return. Social networks have reached critical mass with Facebook interaction now encompassing 66% of the overall respondents. More importantly, 78% of the Facebook respondents were over age 45, indicating the significant penetration into the mainstream residential real estate market. While 54% of the respondents indicated their communication with family and friends happens via telephone, 39% indicated email as the primary point of contact. Bad news for the US Post Office as only 1 respondent out of 1,418 indicated the use of traditional mail for this purpose.
We are seeing homes for sale get gobbled up and many with multiple offers here in Santa Clarita. The perfect storm has been brewing with low interest rates and pricing having come down so low. All signs point to 2012 being the year many people will one day look back on and either be ecstatic they made their home purchase, or have a case of the shoulda-woulda-coulda’s that they didn’t take advantage of the favorable conditions.
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