ALTA Webinar: The Profile of Home Buyers and Sellers. Jessica Lautz National Association of REALTORS January 29, 2015

Transcription

1 ALTA Webinar: The Profile of Home Buyers and Sellers Jessica Lautz National Association of REALTORS January 29, 2015

2 Methodology Survey conducted with recent home buyers who purchased a home between July 2013 June 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 the category and is not all encompassing

3 Vacation Home Buyers, 13% Share of Home Sales Investor Buyers, 20% Primary Residence Buyers, 67% 2014 Investment and Vacation Home Buyers Survey

4 Buyer Demographic Changes 2010 Profile 2011 Profile 2012 Profile 2013 Profile 2014 Profile Median Age Gross HH Income $72,200 $80,900 $78,600 $83,300 $84,500 Household Composition Children in Home Own a 2 nd Home 58% married couples, 20% single females, 12% single males, 8% unmarried couples 64% married couples, 18% single females, 10% single males, 7% unmarried couples 65% married couples, 16% single females, 9% single males, 8% unmarried couples 66% married couples, 16% single females, 9% single males, 7% unmarried couples 35% 36% 41% 40% 35% 14% 19% 19% 19% 21% 65% married couples, 16% single females, 9% single males, 8% unmarried couples Profile of Home Buyers and Sellers

5 Shift in Household Composition

6 $100,000 Rise in Household Income $90,000 $80,000 $95,000 $84,500 $70,000 $60,000 $68,300 $50,000 $40, All Buyers First-time Buyers Repeat Buyers

7 60% First-time Buyer Share Remains Under Historical Norm 50% 50% 40% 30% 30% 36% 33% 20% 10% % Profile of Home Buyers and Sellers

8 Desire of Gen Y to Buy is Still Present 59 percent of young renters (18 to 39) believe owning a home makes more sense, but 73 percent of young renters also believe it 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 buy a home in the future. Fannie Mae, 2013 Demand Institute Housing and Community Survey

9 Primary Reasons for Buying a Home All Buyers First-time Buyers Repeat Buyers Desire to own a home of my own 24% 53% 9% Job-related relocation or move Desire for a home in a better area Change in family situation Desire for larger home Affordability of homes Desire to be closer to family/friends/relatives Retirement 3 * 5 Establish a household Desire for smaller home 3 * 4 Financial security 3 6 1

10 Buyers View of Homes as a Financial Investment All Married Single Single Unmarried Buyers couple female male couple Good financial investment 79% 79% 78% 81% 83% Better than stocks About as good as stocks Not as good as stocks Not a good financial investment Don't know

11 Expenses that Delayed Saving for Downpayment or Saving for Home Purchase All Buyers First-time Buyers Repeat Buyers Share Saving for Downpayment was Most 12% 23% 7% Difficult Task in Buying Process: Debt that Delayed Saving: Credit card debt 50% 45% 58% Student Loans Car loan Child care expenses Health care costs Other

12 Where to go? 57 million Americans or 18.1% of the population live in a multi-generational family household in 2012, double the number who lived in such 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

13 Multi-generational Home All Buyers Married couple Single female Single male Unmarried couple Multi-generational household 13% 13% 13% 16% 7% Reasons for purchase: Cost Savings 24% 21% 24% 31% 36% Children over 18 moving back into the house Health/Caretaking of aging parents To spend more time with aging parents Other

14 Seller Wanted to Sell Earlier But Waited or Stalled Because the Home Was Worth Less than the Mortgage 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 83 16% All Sellers 1 year or less % 2% 2 to 3 years Yes, and lived in home No, sold home when I wanted to sell 86 12% 4 to 5 years 78 19% 6 to 7 years % 22% 8 to 10 years 11 to 15 years % 8% 16 to 20 years 21 years or more Yes, but rented home to others and lived elsewhere

15 Actual Tenure Among Sellers Remains High Profile of Home Buyers and Sellers

16 Expected Tenure Remains High First-time Buyers Repeat Buyers Profile of Home Buyers and Sellers

17 Force Buyer to Move Again Married couple Single female Single male Unmarried couple Move with life changes (addition to family, marriage, children move out, retirement, etc.) 40% 55% 49% 44% Never moving-forever home Move with job or career change May desire better area/neighborhood May outgrow home Will flip home Other

18 Home Type and Location

19 Home Type Bought 84% previously owned homes Even if new home 58% 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 miles from past residence for buyers

20 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

21 Compromises on Home Purchase All First-time Repeat Buyers Buyers Buyers Price of home 23% 25% 21% Size of home Condition of home Lot size Style of home Distance from job Distance from friends or family Quality of the neighborhood Quality of the schools Distance from school None - Made no compromises

22 Inventory Still Tight

23 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 contacting an 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 to buy home

24 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 Member Profile

25 Agent Use By Buyers & Sellers Remains High 88% of buyers purchased their home through a real estate agent or 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

26 Agent Assisted Sales High Profile of Home Buyers and Sellers All FSBO (For-sale-by-owner) Agent-assisted Other

27 Buyer Use of Online Agent Recommendations Did not use online recommendations and would not consider using 43% Used online recommendations and it influenced choice of agent 10% Used online recommendations and it did not affect my agent choice 9% Did not use online recommendations but would consider doing so next time 38%

28 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 a home What you tell us: 21% of business from past consumers and clients 21% of business from referrals from past consumers and clients, 2014 Member Profile

29 How and How Many Times Contact Agent Method Phone call 56% 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 4 Number of Times Contacted (median) 1

30 Make the Connection Number of Agents Buyer Interviewed Before Picking Agent Used 70% 60% 50% 40% 30% 20% 10% 0% 67% One Two Three Four or more

31 The Search Process

32 Make Your Site Mobile Ready All First-time Repeat Buyers Buyers Buyers Searched with an iphone 52% 54% 51% Search with an ipad Searched with an Android Found my home with a mobile application Search with a different tablet Searched with a Windows based mobile device Found my agent with a mobile application Used QR Code that lead me to more information on the property 3 3 4

33 Keep in Contact All First-time Repeat Buyers Buyers Buyers Calls personally to inform of activities 79% 75% 80% Sends postings as soon as a property is listed/the price changes/under contract Sends s about specific needs Can send market reports on recent listings and sales Sends property info and communicates via text message Has a web page Has a mobile site to show properties Sends an newsletter Advertises in newspapers Is active on Facebook/Twitter Has a blog 1 1 1

34 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 time 28% have recommended 3+ times 83% of sellers would use agent again or recommend to others Since selling typically have 1 times 28% have recommended 3+times

35 Where to find NAR Research Jessica Lautz: NAR Research Economists Outlook Blog: economistsoutlook.blogs.realtor.org Facebook: facebook.com/narresearchgroup Twitter: twitter.com/nar_research