Download - Presentation: 2014 Profile of Home Buyers and Sellers

8/10/2019 Presentation: 2014 Profile of Home Buyers and Sellers

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John L. Scott

Convention

Jessica Lautz

National Association of REALTORS

October 30, 2014


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Methodology

Survey conducted with recent home buyers who purchased a homebetween July 2013June 2014

Survey consists of 127 questions

Seller information gathered from those home buyers who sold a home

Mailed 72,206 questionnaires- response rate of 9.4%

Names obtained from Experian

Data in the presentation is based on medians or the typical buyer in thecategory and is not all encompassing


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Share of Home Sales

2014 Investment and Vacation Home Buyers Survey


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Buyer Demographic Changes

Profile of Home Buyers and Sellers

2010 Profile 2011 Profile 2012 Profile 2013 Profile 2014 Profile

Median Age 39 45 42 42 44

Gross HHIncome

$72,200 $80,900 $78,600 $83,300 $84,500

HouseholdComposition

58% marriedcouples,20% singlefemales, 12%single males,8% unmarriedcouples

64% marriedcouples,18% singlefemales,10% singlemales,7% unmarriedcouples



65% marriedcouples, 16%singlefemales, 9%single males,8%unmarriedcouples

Children inHome

35% 36% 41% 40% 35%

Own a 2ndHome

14% 19% 19% 19% 21%


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Shift in Household Composition

2014 Profile of Home Buyers and Sellers


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Rise in Household Income


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First-time Buyer Share Remains Under Historical Norm



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Young Adult Homeownership RateHome Prices Outpacing Incomes

(under 35 years old)


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Desire of Gen Y to Buy is Still Present

59 percent of young renters (18 to 39) believe owning a homemakes more sense, but 73 percent of young renters also believeit would be difficult to get a mortgage today

75% believe home ownership is an important long-term goal

73% believe ownership is an excellent investment

24% already own their home and an additional 60% plan to buya home in the future.

Fannie Mae, 2013 Demand Institute Housing and Community Survey


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Primary Reasons for Buying a Home

All Buyers

First-time

Buyers

Repeat

BuyersDesire to own a home of my own 24% 53% 9%

ob-related relocation or move 9 4 12

Desire for a home in a better area 8 2 11

Change in family situation 8 5 9

Desire for larger home 7 1 10

Affordability of homes 5 8 3

Desire to be closer tofamily/friends/relatives 3 1 4

Retirement 3 * 5Establish a household 3 7 1

Desire for smaller home 3 * 4

Financial security 3 6 1



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BuyersView of Homes as a Financial Investment

AllBuyers Marriedcouple Singlefemale Singlemale Unmarriedcouple

Good financial investment 79% 79% 78% 81% 83%

Better than stocks 40 39 46 40 37

About as good as stocks 27 27 25 24 33

Not as good as stocks 12 13 7 17 13

Not a good financialinvestment 7 7 6 8 6

Don't know 14 14 15 12 12



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Expenses that Delayed Saving for Downpaymentor Saving for Home Purchase


All

Buyers

First-time

Buyers

Repeat

Buyers

Share Saving for Downpayment was Most

Difficult Task in Buying Process:

12% 23% 7%

Debt that Delayed Saving:Credit card debt 50% 45% 58%

Student Loans 46 57 28

Car loan 38 42 32

Child care expenses 17 13 24Health care costs 12 8 17

Other 8 5 14


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Where to go?

57 million Americans or 18.1% of thepopulation live in a multi-generationalfamily household in 2012,

double the number who lived insuch households in 1980

Of those who are 25-34:

20% of the unemployed live with

parents 12% of employed live with parents

Pew Research, Federal Reserve Bank of New York


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Multi-generational Home

All

Buyers

Married

couple

Single

female Single male

Unmarried

coupleMulti-generationalhousehold 13% 13% 13% 16% 7%

Reasons for purchase:

Cost Savings 24% 21% 24% 31% 36%

Children over 18 movingback into the house 23 26 23 17 3

Health/Caretaking of agingparents 18 19 18 14 22

To spend more time with

aging parents 10 12 8 6 14Other 24 22 26 32 25



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Pent Up Demand

2000 2013

Existing Home Sales 5.2 m 5.1 m

New Home Sales 880 K 430 K

Mortgage Rates 8.0% 4.0%

Payroll Jobs 132.0 m 136.4 m

Population 282 m 316 m


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Seller Wanted to Sell Earlier But Waited or StalledBecause the Home Was Worth Less than the Mortgage


0%

10%

20%

30%

40%50%

60%

70%

80%

90%

100%

All Sellers 1 year orless

2 to 3years

4 to 5years

6 to 7years

8 to 10years

11 to 15years

16 to 20years

21 yearsor more

16%3%

2%

12%19%

26% 22%12% 8%

8397 97

8678

72 7787 91

No, sold home when I wanted to sell Yes, but rented home to others and lived elsewhere

Yes, and lived in home


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Actual Tenure Among Sellers Remains High



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Expected Tenure Remains High



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Force Buyer to Move Again

Married

couple

Single

female

Single

male

Unmarried

coupleMove with life changes (addition to family,marriage, children move out, retirement, etc.) 40% 55% 49% 44%

Never moving-forever home 24 24 15 16

Move with job or career change 20 9 13 20

May desire better area/neighborhood 9 7 12 13May outgrow home 7 4 7 14

Will flip home 1 1 3 3

Other 6 5 7 4



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Home Type and Location


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Home Type Bought

84% previously owned homes

Even if new home58% used an agent to buy!

79% detached single-family home

Where?

50% suburb

20% small town

16% urban

11% rural area

3 bedrooms/2 baths

1,870 square feet

Built in 1993

12 miles from past residence for buyers



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Location, Location, Location

Quality of the neighborhood

Convenient to job

Overall affordability of homes

Convenient to friends/family

Convenient to shopping

Quality of school district

Design of neighborhood



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Commuting Costs


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Environmentally Friendly FeaturesGood for Earth andWanted by clients


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Compromises on Home Purchase

All

Buyers

First-time

Buyers

Repeat

BuyersPrice of home 23% 25% 21%

Size of home 20 27 17

Condition of home 18 19 17

Lot size 16 18 15Style of home 16 18 14

Distance from job 14 18 11

Distance from friends or family 7 9 6

Quality of the neighborhood 5 6 5

Quality of the schools 4 7 2

Distance from school 2 3 1

None - Made no compromises 33 25 36



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Inventory Still Tight


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Tightened Inventory Affects Home Search and Selling

Buying Side:

Buyers saw 10 homes before buying

Typically look for 10 weeks total and 2 weeks before contactingan agent

53% of buyers reported hardest task is in process was finding

the right home Selling Side:

Typically received 97% of final asking price

Median time on market 4 weeks 11 weeks in 2012

For FSBO sellers who did not know the buyer

15% were contacted by a buyer they did not know asking tobuy home



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Most Important Factor Limiting Clients

ALL REALTORS

Difficulty in finding the right property 33%

Difficulty in obtaining mortgage finance 25

No factors are limiting potential clients 16

Ability to sell existing home 7

Expectation that prices might fall further 6

Low consumer confidence 6

Concern about losing job 1

2014 Member Profile


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Agent Use By Buyers & Sellers Remains High

88% of buyers purchased their home through a real estate agentor broker

Most want help finding right home

Benefited from help understanding the process

High importance on honesty and integrity

88% of sellers were assisted by an agent

Help market home

Sell w/in specific timeframe

Help price home competitively

Reputation and honesty and integrity important



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Agent Assisted Sales High

19 17 15 18 16 13 14 14 13 12 12 13 11 9 10 9 9 9

77 82 81 80 77 7983 82 85 84 85 84 85 88 87 88 88 88

4 1 4 4 7 84 4 2 3 3 3 4 3 3 2 3 2

0

10

20

30

4050

60

70

80

90

100

All FSBO (For-sale-by-owner) Agent-assisted Other



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Buyer Use of Online Agent Recommendations

Used onlinerecommendations

and it influencedchoice of agent10%

Used online

recommendationsand it did not affect

my agent choice9%

Did not use online

recommendationsbut would considerdoing so next time

38%

Did not use onlinerecommendations

and would notconsider using

43%



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Personal Recommendations are Key!

How buyers found agent: 40% referred by or is a friend, neighbor, relative

12% used agent they had previously worked with

Selling side:

38% referred by or is a friend, neighbor, relative

22% used an agent they had previously used to buy/sell ahome

What you tell us:

21% of business from past consumers and clients

21% of business from referrals from past consumers and clients

2014 Profile of Home Buyers and Sellers, 2014 Member Profile


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How and How Many Times Contact Agent

Method

Phone call 56%

E-mail 21

Contacted friend/family 7

Web form on home listing website 5

Text message 3

Through agent's website 3

Social Media (FaceBook, Twitter, LinkedIn, etc.) 2

Other 4Number of Times Contacted (median) 1



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Call Them Back!Number of Agents Buyer Interviewed Before Picking Agent Used

0%

10%

20%

30%

40%

50%

60%

70%

One Two Three Four or more

67%

20

84



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The Search Process

F f U


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Frequency of Use

l f b i


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Value of Website Features



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Make Your Site Mobile Ready

AllBuyers

First-timeBuyers

RepeatBuyers

Searched with an iPhone 52% 54% 51%

Search with an iPad 46 39 50

Searched with an Android 27 33 23

Found my home with a mobile application 27 30 24Search with a different tablet 10 11 9

Searched with a Windows based mobiledevice 6 5 7

Found my agent with a mobile application 4 4 4Used QR Code that lead me to moreinformation on the property 3 3 4



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Keep in ContactAll

Buyers

First-timeBuyers

RepeatBuyers

Calls personally to inform of activities 79% 75% 80%Sends postings as soon as a property is listed/the

price changes/under contract 69 69 69

Sends emails about specific needs 59 60 58

Can send market reports on recent listings and sales 51 47 54

Sends property info and communicates via textmessage 45 48 44

Has a web page 29 29 30

Has a mobile site to show properties 25 25 25

Sends an email newsletter 10 11 10Advertises in newspapers 6 5 7

Is active on Facebook/Twitter 6 7 5

Has a blog 1 1 1



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Satisfaction

Process: 89% of buyers are satisfied with the buying process

88% of sellers are satisfied with the selling process

With the agent:

88% of buyers would use agent or recommend to others Since buying typically have 1 time28% have recommended

3+ times

83% of sellers would use agent again or recommend to others

Since selling typically have 1 times28% have recommended3+times



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Where to find NAR Research

Jessica Lautz:[email protected], 202-383-1155

NAR Researchwww.realtor.org/research-and-statistics

Economists

Outlook Blog:economistsoutlook.blogs.realtor.org

Facebook: facebook.com/narresearchgroup

Twitter: twitter.com/NAR_Research
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