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Dime survey: housing-led recovery problematic.

First-time homebuyers could drive a housing rebound in the New York metropolitan area, but a near-term turn-around is unlikely because of pessimism about the economy, according to a study released by The Dime Savings Bank of New York, FSB.

"The American Dream 1992; Diminished Expectations a Study by The Dime Savings Bank of New York" (FSB), also found that immigrants are an important factor in New York's home buying market.

The disproportionately large role of immigrants in the New York area residential market is underscored by the fact that 26 percent of home purchases in the past year in this area were made by individuals who were not born in the United States. In addition, immigrants will account for one out of four home purchases over the next three years in this area, according to The Dime survey.

The respondents also indicated, by a margin of three-to-one, that if given the opportunity to live anywhere in the United States, they would leave the New York metropolitan area. Of those who would prefer to live elsewhere, 63 percent say they would stay on the East Coast, 18 percent would move to the West Coast, 7 percent would go to the Southwest, 4 percent would select the Central States, 4 percent would choose Hawaii and 6 percent are undecided.

Eight-hundred individuals residing in The Dime's core market area in New York and New Jersey participated in the survey, which revealed that first-time homebuyers accounted for 69 percent of the home purchases in the past 12 months and that 51 percent of the area's renters plan to purchase a home within the next three years.

Another Dime survey finding that suggests a slow recovery for area home sales is the difference between what prospective home owners plan to spend on a new home, and the average purchase price in the area during the past year. The mean purchase price cited by survey respondents who bought a home for the first time in the 12 months ending August 1992 was $164,500, while the corresponding price which potential buyers expect to spend is only $148,400.

Prospective homebuyers are entering the market with diminished expectations, the survey found. Eight-three percent of renters say they are willing to make significant concessions on their "dream" home and in their lifestyles in order to buy a home.

Fifty-eight percent of New York area renters would make concessions on size and layout, and 53 percent would compromise on the condition of the house. The lifestyle sacrifices they would make to buy a home include vacationing closer to home, cited by 84 percent of those who say they are in the market for a home, while 81 percent said they would own only one care and 77 percent would live farther from work if it meant being able to buy a home.

Potential buyers also expressed concern about their financial ability to purchase a home. Nearly six in 10 said they don't have enough money for the down payment and closing costs, and 42 percent are worried about their ability to meet monthly mortgage payments.
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Title Annotation:study released by Dime Savings Bank of New York F.S.B. analyzes home buying market
Publication:Real Estate Weekly
Date:Dec 2, 1992
Words:516
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