August 31, 2006

Investing without Mr. Right: new surge in single women homebuyers

By Don Tornincasa
Special to the Times

It used to be practically unthinkable—a single woman buying a home. Imagine Harriet landing that three-bedroom rancher without Ozzie Nelson. Or, for the current generation, Marge getting into a nice Victorian sans Homer. D’oh!

But times have changed, and how. Spurred on by changing demographics, a healthy real estate market, a variety of new loan options and more buying power than they had in the past, single women are buying real estate like never before.

In 2005 alone, more than 1.7 million single women closed deals on homes throughout the country. That’s one out of every five home sales, more than twice as many as single men buyers. Over the past two decades, the percentage of buyers who are single women has almost doubled, while the percentage of single men buyers actually has slipped.

The Harvard Joint Center for Housing Studies, among other experts, concludes that one of the primary reasons for the changing demographics is that women are delaying marriage. Rather than seeing marriage as a step before homeownership, they're simply buying now and marrying later.

Other reasons that experts cite are high divorce rates and higher income levels among women. Women also tend to enjoy greater longevity, often making them single homeowners in their later years.

Walter Molony, a spokesman for the National Association of Realtors, believes that single men just aren’t as focused on buying real estate as single women. “Men don’t get serious about homes until they find the right woman, but women are serious about buying homes now,” he said.

The growing number of single women buyers isn’t likely to slow anytime soon. By 2010, the number of women-headed households with no spouse will increase to about 31 million, according to Fannie Mae, one of the nation’s largest lenders. Since 1950, the number of households headed by women has increased fourfold.

No matter what the reason for the trend, one thing is clear: women have become a powerful demographic in the real estate market. And the phenomenon is triggering changes in the industry, from builders who are adding features to homes with women in mind, to mortgage lenders who are doing more to help women qualify for loans.

So what do women want in a home? Home builders are scrambling to entice female buyers with such things as gourmet kitchens, name-brand appliances, upstairs laundry rooms, big walk-in closets, skylights in the bathrooms for natural light, and slate floors that are easier to clean.

Equally important, according to home builders, is what is on the outside of the home. In particular, women are looking for low- or no-maintenance landscapes, and more security features. Builders are responding with more street lights in new developments, more gated communities, built-in security systems, and courtyards that provide a stronger sense of security.

The mortgage lending side is changing, too. Because of new government loan criteria, many lenders now help single women in a number of ways: They let women count child support as income to help qualify for loans; they consider divorced women as first-time buyers so that they can qualify for down payment assistance or low down payment loans; and they are letting women use alternative forms of credit history (such as a phone bill record) in case they never had credit in their own names.

Before taking the plunge into the market, there are a number of things women buyers (or all buyers for that matter) should consider:

Pre-qualify for a loan. Talk to a mortgage lender and find out what you can afford, so that you shop within your budget. This also can put you in a better bargaining position compared to buyers who haven’t been pre-qualified.

Set aside a cash reserve for the upkeep of your home and to cover any unforeseen emergencies that always seem to crop up.

Finally, work with a professional Realtor® who knows the neighborhood you’re interested in and has the experience to help you find the best home for the money.

Don Tornincasa is the manager of Coldwell Banker Residential Brokerage’s San Jose-Almaden office. A 17-year real estate veteran, Don oversees a team of over 65 real estate professionals in the San Jose area. His office is located at 1096 Blossom Hill Road #200 in San Jose, and he can be reached at (408) 448-4488 or by e-mail at doncasa@aol.com.