California Study Reveals Stock Market Sellers Used 4.6%of Proceeds to Purchase Furniture

Furniture World News

While the stock market played a role in the decision to buy or sell a home in 11.5 percent of all residential real estate transactions in California, that percentage increased dramatically in the San Francisco Bay Area, according to information culled from the Fourth Quarter 1999 California Housing Finance Survey (HFS) produced by the California Association of REALTORS(R). The importance of the stock market in the decision to buy or sell a home in the San Francisco Bay Area jumped to 27.6 percent in the fourth quarter 1999 compared to 17.5 percent in the third quarter 1999, according to the survey. In Southern California, the stock market influenced buyers' decision to purchase a home in 7.2 percent of all transactions. Within Southern California, the stock market played a role in 14.3 percent of the transactions in Orange County compared to 6.3 percent in Los Angeles County. "Another way of looking at the stock market's importance is to analyze the share of transactions in which proceeds from stock market-related financial instruments have been used for the downpayment of a home," said C.A.R. President Richard F. Gaylord. "Statewide, 13.8 percent of homebuyers used proceeds from the stock market when purchasing a home. "But in the San Francisco Bay Area, stock market proceeds were used in 23.9 percent of the transactions, compared to 12.5 percent in Southern California," he said. "Within Southern California, the share of transactions in which proceeds from the stock market were used to purchase a home was 12.9 percent in Los Angeles County and 20 percent in Orange County." The Fourth Quarter Housing Finance Survey also found that sellers used their net equity gains from the sale of their homes for a variety of purchases, ranging from electronics and automobiles to investing in the stock market. "Home equity, the median net cash to sellers, was a solid $72,500 in the fourth quarter 1999," said Leslie Appleton-Young, C.A.R.'s vice president and chief economist. "That's just slightly below the $73,000 net cash in the third quarter 1999 and the fourth-highest during the 1990s, behind the $80,000 net equity in 1990." The Fourth Quarter Housing Finance Survey also reported that: -- 42.8 percent used the net cash for a downpayment on their next home -- 4.6 percent used the money to purchase furniture -- 1.0 percent used the money to purchase electronics -- 3.1 percent used the money for vacation -- 6.2 percent used the money for stock market investments -- 3.6 percent used the money to purchase a car -- 18 percent used the money for an unspecified purchase C.A.R.'s quarterly series of Housing Finance Surveys offers a snapshot of the financing, property characteristics and buyer/seller demographics of California REALTORS(R)' most recent transactions. The fourth quarter results are based on a survey sent out to 5,000 California REALTORS(R), with more than 500 valid responses for transactions that took place in October, November and December 1999. The California Association of REALTORS(R) (http://www.car.org) is one of the largest state trade organizations in the United States, with more than 95,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles. C.A.R. releases may also be retrieved by calling the PR Newswire fax-on-demand service at : 1-800-758-5804, ext. 131489 SOURCE California Association of REALTORS Web Site: http://www.car.org Company News On Call: http://www.prnewswire.com/comp/131489.html or fax, 800-758-5804, ext. 131489