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2010 Charlotte Profile of Home Buyers and Sellers: Highlights
Jessica LautzDecember 2, 2010
Methodology
• Survey conducted with recent home buyers who purchased a home between July 2009– June 2010
• Seller information gathered from those home buyers who sold a home
• Mailed 3,500 questionnaires– Received 305 responses– Response rate of 8.7% – Counties: Mecklenburg, Iredell, Anson, Stanly, Gaston,
Lincoln, Union, Alexander, Montgomery and Cabarrus
• Names obtained from Experian
Home Buyers
Typical buyer:• 39-years-old• $70,900• 60% married• 22% single females• 11% single males• 7% unmarried
couples
Who is buying today?
Share of First-Time Buyers
Charlotte
Who is buying today? First-time Buyers
U.S. First-time Buyer:
Charlotte First-time Buyer:
30-years-old 30-years-old$59,900 $52,70048% married 42% married23% single females 31% single females15% single males 14% single males12% unmarried couples
12% unmarried couples
32% have children 34% have children
Used Home Buyer Tax Credit?
All Buyers First-time Buyers Repeat Buyers
Used tax credit 69% 90% 50%
Did not qualify for tax credit 28 9 47
Was not aware of tax credit 2 1 3
Factor in Home Purchase
• 72% of all buyers reported the tax credit was a factor in the timing of your recent home purchase
U.S. Repeat Buyer: Charlotte Repeat Buyer:
49-years-old 50-years-old$87,000 $99,00068% married 76% married17% single females 13% single females9% single males 8% single males4% unmarried couples
2% unmarried couples
37% have children 39% have children
Who is buying today? Repeat Buyers
Why do buyers want to own today?
All Buyers First-time BuyersRepeat Buyers
Desire to own a home 29% 50% 10%
Job-related relocation or move 9 2 15
Home buyer tax credit 8 15 1
Desire for larger home 8 1 13Desire to be closer to family/friends/relatives 7 1 13
Change in family situation 7 7 7
Desire for a home in a better area 6 2 10
Retirement 6 1 10
Affordability of homes 4 4 3
Timing of Buyers Recent Home Purchase
All BuyersFirst-time
BuyersRepeat Buyers
It was just the right time, the buyer was ready to buy a home
34% 37% 30%
It was the best time because of affordability of homes
28 35 21
Did not have much choice, had to purchase 13 6 19
It was the best time because of availability of homes for sale
7 4 9
It was the best time because of mortgage financing options available
6 8 5
What homes are being sold?
Typical home purchased in Charlotte:• 73% of homes were previously
owned• 78% detached single family
homes• Built in 2001 • 2,000 square feet• 3 bedrooms/2 full bathrooms• 55% of homes purchased were in
the suburbs• Buyers typically moved 14 miles
Location, Location, Location
• Quality of the neighborhood • Convenient to job• Overall affordability of
homes • Convenient to shopping • Convenient to friends and
family
Importance of Commute Costs
Importance of Home’s Environmentally Friendly Features
Compromises on Home Purchase
All BuyersFirst-time
BuyersRepeat Buyers
Price of home 19% 23% 14%Lot size 19 19 19Size of home 13 17 10Style of home 12 15 10Distance from job 12 15 10Condition of home 10 13 8Distance from friends or family 7 8 7Quality of the neighborhood 5 7 3Distance from school 2 3 1Quality of the schools 2 1 3Other compromises not listed 6 6 7None - Made no compromises 37 31 42
Expected Tenure in Home
Senior-Related Housing
Share who purchased a home in senior related housing (among buyers over 50) 10%
Type of home purchased
Detached single-family home 22%
Townhouse/row house 33
Apartment/condo in building with 5 or more units 22
Duplex/apartment/condo in 2 to 4 unit building 11
Other 11
The Search Process
First-step Taken
All Buyers
AGE OF HOME BUYER
18-24 25-44 45-64 65 or older
Looked online for properties for sale 34% 33% 37% 30% 31%Contacted a real estate agent 20 20 15 26 35
Looked online for information about the home buying process
15 13 18 13 3
Drove-by homes/neighborhoods 10 7 9 14 7
Talked with a friend or relative about home buying process
9 7 9 7 7
Contacted a bank or mortgage lender 5 13 6 5 3
Frequency of Use of Different Information Sources
Usefulness of Information Sources
Use of the Internet
Length of the Search Process
Number of Weeks SearchedNumber of Weeks Searched Charlotte U.S. South2001 7 72003 8 82004 8 82005 8 82006 8 8 82007 7 8 82008 8 10 82009 12 12 102010 10 12 10
Number of homes viewed 12 12 12
Where Buyer Found Their Home
Charlotte
Real estate agent 38%
Internet 34
Yard sign/open house sign 13
Friend, relative or neighbor 7
Home builder or their agent 6
Print newspaper advertisement 0
Directly from sellers/Knew the sellers 2
Home book or magazine 1
Most Difficult Steps in Home Buying
All Buyers
First-time Buyers
Repeat Buyers
Finding the right property 54% 57% 51%Getting a mortgage 13 16 11Meeting the April 30, 2010 deadline to qualify for the tax credit 7 10 4Saving for the down payment 7 10 4
Appraisal of the property 5 5 5Meeting the deadline to close on the purchase to get the tax credit (September 30, 2010) 3 6 1No difficult steps 24 20 28
Satisfaction in Buying Process
Working With An Agent-Buying
Method of Home Purchase
Charlotte U.S. South
Through a real estate agent or broker 84% 83% 80%
Directly from builder or builder's agent 8 6 9
Directly from the previous owner 3 6 5
Knew previous owner 2 3 2
Did not know previous owner 1 3 3
Through a foreclosure or trustee sale 4 4 5
What do buyers want from real estate professionals?
Agent Skills and Qualities
All Buyers First-time Buyers Repeat BuyersHonesty and integrity 98% 98% 99%Responsiveness 96 95 97Knowledge of purchase process 95 99 92Knowledge of real estate market 95 96 95Negotiation skills 92 90 94Communication skills 88 89 87Knowledge of local area 88 90 86People skills 82 82 83Skills with technology 42 40 44
Benefits Buyers Had When Using an Agent
All BuyersFirst-time
BuyersRepeat Buyers
Helped buyer understand the process 65% 83% 49%
Pointed out unnoticed features/faults with property 59 62 57
Negotiated better sales contract terms 50 50 50Improved buyer's knowledge of search areas 48 50 47Provided a better list of service providers 48 50 46
Negotiated a better price 46 45 47
Referrals Matter
• 53% used an agent that was referred to them or they had worked with before
• 67% of home buyers contacted only 1 agent during their search process
• 9 in 10 would use agent again or referral to others
Financing the Home Purchase
Percent Who Financed Purchase
Home Financing
• Typical buyer financed 92%– First-time buyers typically finance 96%– Repeat buyers typically finance 84%
• Downpayment sources:– Savings – Proceeds from sale of primary
residence– Gift from relative or friend – Sale of stocks or bonds – 401k/pension fund including a loan
Difficulty of Obtaining Financing
All Buyers
First-time Buyers
Repeat Buyers
Much more difficult than expected 15% 13% 16%
Somewhat more difficult than expected 21 24 18
Not difficult/No more difficult than expected
65 63 66
Sacrifices
• Cut spending on luxury items
• Cut spending on entertainment
• Cut spending on clothes • Cancelled vacation
plans• Earned extra income
through a second job
Housing a Good or Bad Financial Investment?
All Buyers First-time BuyersRepeat Buyers
Good financial investment 88% 93% 84%
Better than stocks 47 55 40
About as good as stocks 30 27 33
Not as good as stocks 11 11 11
Home Sellers
Typical seller:• 50-years-old• $106,700• 82% married• 10% single females• 4% single males• 2% unmarried couples• 39% have children in home• Typically lived in their home
for 9 years
Who is selling today?
Home Selling Situation
Why are sellers moving?
All SellersJob relocation 26%Want to move closer to friends or family 20Home is too small 15Moving due to retirement 11
Neighborhood has become less desirable 9
Want to move closer to current job 6
Change in family situation (e.g., marriage, birth of a child, divorce) 4
Home is too large 2
Can not afford the mortgage and other expenses of owning home 1
Other 6
Trade up or down?
Price of home sold
Price of home purchased Difference
18 to 34 years $165,000 $263,000 $98,000
35 to 44 years $165,500 $267,500 $102,000
45 to 54 years $230,000 $240,000 $10,000
55 to 64 years $321,000 $271,000 -$50,000
65 to 74 years $259,500 $205,000 -$54,500
75 years or older $237,000 $259,000 $22,000
Selling Market Today
• Sellers typically received 96% of their asking price for the home
• 47% of sellers did not reduce their asking price
• 53% offered incentives• Homes were typically
on the market 5 weeks
Equity Earned in Home
TENURE IN HOME All Sellers in Charlotte
Dollar value Percent
1 year or less -$40,000 -
2 to 3 years -$29,500 -
4 to 5 years $6,000 3%
6 to 7 years $24,500 11%
8 to 10 years $30,000 17%
11 to 15 years $60,500 40%
16 to 20 years $63,000 48%
21 years or more $112,500 125%
Median $30,000 18%
Satisfaction with the Selling Process
Working With An Agent-Selling
Method Used to Sell HomeCharlotte U.S. South
Sold home using an agent or broker 84% 88% 85%
Seller used agent/broker only 83 85 83 Seller first tried to sell it themselves, but then used an agent 1 3 2
For-sale-by-owner (FSBO) 13 9 11 Seller sold home without using a real estate agent or broker 10 8 9 First listed with an agent, but then sold home themselves 3 2 2
Sold home to a homebuying company 0 1 1
Other 2 3 3
Level of Service Provided
What do sellers want from their real estate professional?
• Help price home competitively • Help seller market home to
potential buyers• Help find a buyer for home
Method to Market Home
All HomesListing on the Internet 93%Yard sign 75Open house 49Other Web sites with real estate listings (e.g. Google, Yahoo) 33Real estate magazine 27Direct mail (flyers, postcards, etc.) 24Print newspaper advertisement 20Video 15Social networking Web sites (e.g. FaceBook, MySpace, etc.) 11
Video hosting Web sites (e.g. YouTube, etc) 1Television 1
Other 4
Buyer Side: Usefulness of Information Sources
Referrals Matter
• 58% used an agent that was referred to them or they had worked with before
• 51% of home sellers contacted only 1 agent during their search process
• 8 in 10 would use agent again or refer them
FSBO Sellers
FSBO Experience (Charlotte)
• Most cited reason for FSBO selling: – Did not want to pay a
commission or fee (36%)
• Most difficult tasks:– Getting the price right– Having enough time to
devote to all aspects of the sale
FSBO Selling Market (U.S.)
All Sellers All FSBO
Seller Knew Buyer
Seller did not Know
BuyerAll Agent-assisted
Agent-assisted
only
First FSBO, then Agent-
assisted
Median selling price $190,000 $140,000 $139,600 $155,700 $199,300 $200,000 $168,000 Median (sales price as a percent of asking price)
96% 100% 100% 97% 96% 96% 93%
Percent who reduced asking price 57% 42% 23% 62% 59% 59% 62%
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