Prudential Real Estate Outlook

Transcription

1 Prudential Real Estate Outlook January 30, Copyright 2012 Daniel J Edelman Inc.

2 METHODOLOGY WHO HOW MANY WHEN WHERE? Targeted sample of Americans in the market for buying or selling a home: 2,000 Recent Transactors Bought/sold home within the last year 2,000 Likely Transactors Indicated they are likely to buy/sell home within the next year Total: n=5000 (Margin of Error = +/-1.4%) Recent Transactors: n=2000 (Margin of Error = +/-2.2%) Likely Transactors: n=2000 (Margin of Error = +/-2.2%) Contemplators: n=1000 (Margin of Error = +/-3.1%) Data Collection Occurred December 5 14, 2012 Combination Q3/4 End of Year Study Online Custom Survey 1,000 Contemplators Considered but did not buy/sell within the past year 2 Copyright 2012 Daniel J Edelman Inc.

3 CONTEMPLATORS SEGMENTATIONS 3 AGE INCOME GENDER EDUCATION EMPLOYMENT MARITAL STATUS PARENTS FAMILY REGION ETHNICITY TRACKING DATA

4 KEY FINDINGS HOME OWNERSHIP MATTERS Owning a home is important to over 96% of Americans Americans believe homeownership is most associated with a good economy and the American Dream Top reasons to own a home: Space, Safety, Investment REAL ESTATE PERCEPTIONS ARE HIGH, AND THE TIME TO BUY IS NOW 73% are at lease somewhat confident in the recovering real estate market and home values 74% say interest rates are historically low and now is a great time to buy Contemplators, more confident, are waiting for the right opportunity CONCERNS LINGER OVER MORTGAGES 1 in 4 Recent or Likely Transactors had trouble qualifying for a mortgage 62% feel getting a mortgage is harder than it was before the crisis 63% feel the crisis has made them more cautious about buying OPPORTUNITIES FOR AGENTS IN GUIDANCE Americans have a heightened tendency for trusted sources of information and guidance when home shopping, especially among those with lower incomes 72% say it s more important than ever to work with a good real estate agent for the best success in buying or selling a home Majority of Americans would rather be with their real estate agent than a celebrity when searching for a home AGE & GENDER Younger generations are more concerned with raising a family when purchasing a home, and have more of an overall positive outlook towards the current market Female views on the market generally stronger than male views 4 Copyright 2012 Daniel J Edelman Inc.

5 HOME OWNERSHIP IS IMPORTANT HOMEOWNERSHIP IS IMPORTANT Copyright 2012 Daniel J Edelman Inc.

6 Owning a home remains important to over 95% of Americans Importance of Owning a Home 77% 78% 73% 72% 78% 75% 96% % 71% Female Very Important Male 20% 21% 2% 3% 1% 1% Owning a home is more important to younger generations and females Very Important Somewhat Important Not Very Important Not At All Important Total Q2 Total EOY Q3/4 21. How important is owning a home to you? Select one response. 6 Copyright 2012 Daniel J Edelman Inc. Motivation & Barriers

7 AND HERE S WHY HERE S WHY Copyright 2012 Daniel J Edelman Inc.

8 Over three quarters of Americans agree homeownership is most associated with nationalistic ideas and aspirations 78% 75% 81% Female 75% Male Females feel stronger about homeownership NET being Agree good for the economy Homeownership is good for the economy Homeownership is an important part of the American Dream 25b,c. How strongly do you agree or disagree with the following statements? NET Agree, Top 2 Box Strongly Agree, Agree, Somewhat Agree, Somewhat Disagree, Disagree 8 Copyright 2012 Daniel J Edelman Inc. Motivation & Barriers

9 Homeownership is about space, safety, and investment Reasons to Own A Home (% Very and Somewhat Important) More Control Over Living Space Live in a Safer Neighborhood Good Investment More Space For Family Sense of Pride or Accomplishment Tax Benefits Community Where People Share Values Good Place to Raise a Family Live in a More Convenient Location - Close to Family / Friends Financial Security & Something to Borrow Against Live in an Area with Better Schools 22a-k. When thinking about the reasons you might own a home, how important are each of the following? Multiple response showing very or somewhat important response. Very important, Somewhat important, Not very important, Not at all important 9 Copyright 2012 Daniel J Edelman Inc. 71% 97% 93% 90% 90% 89% 85% 83% 81% 80% 78% 73% 71% 69% 67% MW S NE W 59% 61% 56% 53% % 62% Investments are more important to women than men, while living space is significantly more important to Westerners Motivation & Barriers *VERY IMPORTANT

10 REAL ESTATE MARKET PERCEPTIONS ARE GENERALLY FAVORABLE Copyright 2012 Daniel J Edelman Inc.

11 63% of Americans have a favorable or somewhat favorable perception of the residential real estate market in the U.S. Overall Perception of U.S. Real Estate Market Younger generations are significantly more likely to have a favorable perception of the real estate market than older groups 40% 43% 29% 23% 14% 11% 24% 20% 28% 29% Favorable Perception of U.S. Real Estate Market 9% 8% 17% 22% Favorable Somewhat Favorable Somewhat Unfavorable Unfavorable Female Male Males are more favorable than females Total Q2 Total EOY Q3/Q4 12. Based on your personal experience and/or what you know about the process of buying and selling homes, what is your overall perception of the residential real estate market in the United States? 11 Copyright 2012 Daniel J Edelman Inc. Housing Market Attitudes

12 Contemplator confidence is up 10% from Q2, 3% from Q1 64% 67% 57% Very Confident/Confident/Somewhat Confident Q1 Q2 EOY Q3/4 13. Considering the US economy s ongoing recovery from the Great Recession, how confident do you feel that the real estate market and property values will at least begin to recover in the next year or two? Top 3 Box, 5-point scale (Very confident, Confident, Somewhat Confident, Not Very Confident, Not At All Confident) 12 Copyright 2012 Daniel J Edelman Inc. Housing Market Attitudes

13 Right opportunity and finding the right home are top two issues holding back Contemplators 41% WAITING FOR THE RIGHT OPPORTUNITY 31% HAVEN T FOUND THE HOME I WANT YET Instability of U.S. economy I m worried I won t be able to sell my current home Trying to save more money Not sure about finances I m not confident I can set the right price for my home I m worried that home values haven t stopped dropping I m worried about my job/employment I m nervous about having a new mortgage Lack of focus/time Attachment/Memories associated with current home I m not confident I can bid the right price for a new Lack of knowledge/overwhelmed by process Other 19% 18% 16% 12% 10% 8% 6% 5% 9% 30% 29% 29% 27% Reasons for Not Buying/Selling (Among Contemplators) 16. Earlier in the survey, you indicated that you ve been considering buying or selling a home for the past year. For what reasons, if any, have you not yet bought or sold a home? Select all that apply. [MULTIPLE RESPONSE] 13 Copyright 2012 Daniel J Edelman Inc. Housing Market Attitudes

14 and Contemplator NET favorability jumped 8% points from Q2 25% 6% 4% 34% 42% 50% 31% $50-75K $75-100K $ K $ K $200+K Majority of Contemplators fall in the <$100K income bracket 14 Copyright 2012 Daniel J Edelman Inc. NET Favorable + Somewhat Favorable Perception of Real Estate Market Total Q2 Total EOY Q4 12. Based on your personal experience and/or what you know about the process of buying and selling homes, what is your overall perception of the residential real estate market in the United States? Americans with <$100K are more likely to need more guidance when home-searching 65% 55% Less than $100K $100K+ Need Guidance Housing Market Attitudes

15 Market recovery perception confidence rises marginally from Q1 Confidence that Real Estate Market & Property Values Will Begin to Recover 57% 67% 37% 33% 34% Q2 Q3/4 NET Confident (Very Confident + Confident + Somewhat Confident) 11% 16% 14% 22% 23% 13. Considering the US economy s ongoing recovery from the Great Recession, how confident do you feel that the real estate market and property values will at least begin to recover in the next year or two? Age based on NET very confident + confident 15 Copyright 2012 Daniel J Edelman Inc. 25% Very Confident Confident Somewhat Confident Not Very Confident Not At All Confident Q1 Q2 EOY Q3/Q4 24% 21% 22% 6% 6% 6% 48% 41% 33% 32% Contemplator confidence up 10% from Q2 Younger groups more confident of market recovery Housing Market Attitudes

16 Additionally, Americans are more optimistic than in Q2 about the difficulty of buying compared to their parents generation 34% 26% 23% 27% 28% 27% Strongly Agree (more difficult to buy now than in parents' generation) It is more difficult to buy a home now than in my parents' generation (Strongly Agree) Older generations more skeptical about current burdens of buying compares to year olds Total Q2 Total EOY Q3/Q4 25a. How strongly do you agree or disagree with the following statements? Strongly Agree, Agree, Somewhat Agree, Somewhat Disagree, Disagree 16 Copyright 2012 Daniel J Edelman Inc. Motivation & Barriers

17 and indicators lead to the time to buy being now 13% 74% With interest rates at historically low levels, now is a great time for me to buy a home 87% Americans should buy homes while mortgage rates and average home prices are low Rates and prices may decline further so people should wait to buy 27. Which of the following is closer to your view? 25p. How strongly do you agree or disagree with the following statements? NET Agree, Top 2 Box Strongly Agree, Agree, Somewhat Agree, Somewhat Disagree, Disagree 17 Copyright 2012 Daniel J Edelman Inc. Motivation & Barriers

18 HOWEVER Copyright 2012 Daniel J Edelman Inc.

19 Mortgage qualification and the lingering crisis are key deterrents for buying or selling a home * Asked of recent Transactors and Likely Transactors only 62% Financing/getting a mortgage is more challenging than it ever was before the market crisis Nearly 1/4 (23%) of Americans I had difficulty qualifying for a mortgage 63% The housing crisis reminded me that I have to be more careful about buying or selling a home 14c. Thinking about some of the challenges faced when buying and selling a home in today s economy, please indicate your level of agreement or disagreement with the following statements NET Agree, Top 2 Box (Strongly Agree, Agree, Somewhat Agree, Somewhat Disagree, Disagree) 25d, e. How strongly do you agree or disagree with the following statements? NET Agree, Top 2 Box (Strongly Agree, Agree, Somewhat Agree, Somewhat Disagree, Disagree ) 19 Copyright 2012 Daniel J Edelman Inc. Housing Market Attitudes

20 OPPORTUNITIES FOR GUIDANCE Copyright 2012 Daniel J Edelman Inc.

21 Trusted sources of information are a large concern; case for agents guidance is strong % Very or Somewhat Concerned 67% 64% 58% 58% Having trusted sources of information and guidance 61% Having a good agent can help make me make the right choices about the type of home and community I want 62% 72% Given the dynamics and challenges of the market, it s more important than ever to work with a good agent for the best success in buying or selling a home Younger generations are more concerned about being able to find trusted sources of information and guidance 14a. Thinking about some of the challenges faced when buying and selling a home in today s economy, please indicate your level of agreement or disagreement with the following statements NET Agree (Among Recent and Likely Transactors) Strongly Agree, Agree, Somewhat Agree, Somewhat Disagree, Disagree 25m. How strongly do you agree or disagree with the following statements? NET Agree (Strongly Agree, Agree, Somewhat Agree, Somewhat Disagree, Disagree ) 26k. When thinking about buying a home, how concerned are you / would you be about the following? Showing Part 1 NET Concerned Very / Somewhat (Very Concerned, Somewhat Concerned, Not Very Concerned, Not At All Concerned) 21 Copyright 2012 Daniel J Edelman Inc. Motivation & Barriers