Tyl Pattisall’s timing couldn’t have been better. She and her husband bought a condominium in San Francisco three years ago when the market was depressed and sold it for a profit in June. Now she’s looking to buy again.
“We were very lucky to have bought when we did and to sell when we did,” said Pattisall, 38. “We’re lucky that we got out of our San Francisco place having done moderately well.”
Pattisall is an example of a growing share of repeat purchasers driving the U.S. housing recovery, as appreciating property values and low mortgage rates give many the wherewithal to relocate. The same forces are also benefitting longer-term homeowners who had wanted to move and didn’t want to sell until prices improved.
Homeowners returning to the market accounted for 54 percent of sales of existing properties in June, up from 49 percent a year earlier, according to data from the National Association of Realtors. First-time buyers were 29 percent, a decline of 3 percentage points in the past year and compared with a typical share of 40 percent amid strict lending conditions and a lack of lower-priced properties.
Repeat buyers will remain a crucial element of the real- estate rebound until a better-heeled economy also opens the way for more first-timers to rejoin the market.
“What we’re seeing are these buyers who’ve waited around and who have finally realized - this is a good time to move,” said David Crowe, chief economist for the National Association of Home Builders in Washington. “They will feed the demand until our economy gets a little more solid.”
Upper Hand
Homeowners like Pattisall are getting the upper hand as climbing home prices boost household wealth, facilitating purchases of bigger properties or lowering the amount of financing needed for other comparable dwellings.
The S&P/Case Shiller index of home prices in 20 U.S. cities has been increasing on a month over month basis since February 2012. It was up 16.5 percent in May from a more than 10-year low reached in March 2012. It is still 24.4 percent below the record reached at the peak of the housing boom in July 2006.
“If they have built up equity in their homes, in the last year of so, home values have risen much more than the value of lots of other investments,” said Jed Kolko, chief economist at real estate website Trulia Inc. in San Francisco. “That helps them put down a larger down-payment or not need a mortgage in the first place.”