About two-thirds of Californians who sold their homes did so because of difficulty making their mortgage payments, according to a report released by the California Association of Realtors on Thursday.
"Tighter underwriting standards and a decline in equity continued to impact the market in 2009," said Steve Goddard, the association’s president.
"Many homeowners chose to sell last year because their adjustable-rate mortgage reset at the same time home prices were experiencing an unprecedented decline, leaving them with little equity and difficulty in qualifying for a refinance."
When asked whether they sold their home because they had difficulty making their mortgage payments, 67 percent of sellers said yes, compared to 62 percent in 2008. First-time sellers were more likely to say yes than experienced sellers (72 percent vs. 62 percent); in 2008, those figures were 63 percent vs. 61 percent.
In a separate, multiple-choice question, 30 percent of sellers in the 2009 survey responded that their primary reason for selling was trouble paying monthly mortgage payments, compared to 20 percent in 2008. Another 18 percent of sellers said unemployment was the primary reason, and 15 percent said mortgage-payment increases were the primary cause, the report said.
While financial difficulties motivated most sales in 2008 and 2009, home appreciation and low interest rates spurred sellers in 2006 and 2007.
Sellers got an average of $20,958 and a median of $32,315 less than the original asking price for their home last year. First-time home sellers experienced the biggest list-to-sold price ratios, at $30,000 below list price, compared to repeat sellers at an $8,000 difference, the report said.
First-time sellers made up 44 percent of sellers in 2009, compared to 33 percent in 2008 and 15 percent in 2007, the report said.
For the first time since the survey was established in 2002, sold condominiums and townhouses surpassed the number of single-family homes sold, 55 percent vs. 45 percent. Sold investment properties rose to 22 percent from 17 percent in 2009, the report said.
Almost two thirds of homes (63 percent) fell out of escrow before closing either because the "buyer could not get an acceptable mortgage" or the buyer "backed out" of the deal.
Only half of sales closed on time in 2009, compared to 64 percent the year before, the report said. The time it took to sell homes rose to 6.5 weeks last year from 5.25 weeks in 2008.
Almost all (99 percent) of respondents surveyed hired a Realtor to help them sell their home. The main reason for their choice, 72 percent of them said, was an agent’s ability to sell the home for a higher price, the report said. They also cited better marketing abilities and difficulty of selling the home themselves as motivating factors.
The report was based on data the association gathered in June 2009 through a telephone survey of 600 randomly selected people who had sold a home in California in the last six months before the survey.
What’s your opinion? Leave your comments below or send a letter to the editor.