The 2010 NAR Profile of Home Buyers and Sellers Released
In July of 2010, the National Association of REALTORS® mailed an eight-page questionnaire to 111,004 consumers who purchased a home between July 2009 and June 2010. The survey yielded 8,449 usable responses.
These surveys provide information on buyer and seller demographics, housing characteristics and the experience of consumers in the housing market. Buyers and sellers also share information on the role that real estate professionals play in home sales transactions.
Did you purchase a home in the past year or know someone who did? How does the following information and analysis compare to your (or your friend’s) home buying or selling experiences?
The following is reprinted from Realtor.org:
NAR 2010 President Vicki Cox Golder said the pattern of home buyers taking a long-term view has solidified over the past few years.“This underscores two simple facts – home ownership encourages stability, and the longer you own, the better your investment.”
Even with several years of price declines, the typical seller who purchased a home eight years ago experienced a median equity gain of $33,000, a 24 percent increase, while sellers who were in their homes for 11 to 15 years saw a median gain of 40 percent.
“Sellers who purchased at the top of the market and had to sell in a short time frame were hurt by the price correction, but the vast majority who are able to stay for a normal period of home ownership generally built enough equity to make a trade-up purchase,”Golder said. “Despite swings in the housing market in recent years, the fact is most long-term owners see healthy gains in the value of their property.”
House flipping is virtually nonexistent in today’s market. “The primary exception is for experienced investors, many of whom pay cash and are making renovations or improvements after a careful study of properties, neighborhoods and market demand,” Golder explained. “The house flipping and quick gains which occurred during the boom period were abnormal, driven by risky, easy-money financing that should never have been allowed in the market.”
In the 2006 study, covering sellers during the close of the housing boom, 6 percent of sellers had owned their property for less than a year and a total of 30 percent had owned for three years or less. In the 2010 study, only 3 percent had owned their home for less than a year and a total of 11 percent had owned for three years or less.
Paul Bishop, NAR vice president of research, said the lion’s share of buyers view their home as a good investment. “Eighty-five percent of recent home buyers see their home as a good investment…..in fact, the single biggest reason most people buy a home is the simple desire to own a home of their own, cited by 31 percent of respondents, including 53 percent of first-time buyers.”
The next biggest reasons for buying, identified by all home buyers, were desire for a larger home, 9 percent; a change in family situation and the home buyer tax credit, cited by 8 percent each; a job-related move, 7 percent; and the affordability of homes, 6 percent. Twelve other categories were 5 percent or less.
The number of first-time home buyers rose to a record high 50 percent of all home sales from 47 percent in the 2009 study, building on success of the home buyer tax credit which began in 2009. The previous cyclical high for first-time buyers was 44 percent in 1991; records date back to 1981.
First-time buyers who made a downpayment used a variety of sources: 74 percent used savings, 27 percent received a gift from a friend or relative, typically from their parents, and 9 percent received a loan from a relative or friend. Eight percent tapped into a 401(k) fund, and 6 percent sold stocks or bonds. Ninety-five percent chose a fixed-rate mortgage.
Fifty-eight percent of all buyers are married couples, 20 percent are single women, 12 percent single men, 8 percent unmarried couples and 1 percent other.
The typical repeat buyer was 49 years old, earned $87,000, and purchased a 2,000 square foot home costing $215,000.
Sixty-four percent of sellers chose their agent based on a referral or had used the same agent in the past. Reputation was the most important factor in choosing an agent, cited by 35 percent of respondents, followed by trustworthiness at 23 percent. Eighty-four percent of sellers are likely to use the same agent again or recommend to others.
Home buyers thought the most important services agents offer are helping find the right house, and negotiating sales terms and price. Buyers also most commonly choose an agent based on a referral from a friend, neighbor or relative, with trustworthiness and reputation being the most important factors.
Buyers use a wide variety of resources in searching for a home: 89 percent surf the Internet, 88 percent use real estate agents, 57 percent yard signs, 45 percent attend open houses and 36 percent look at print or newspaper ads. Although buyers also use other resources, they generally start the search process online and then contact an agent.
When asked where they first learned about the home purchased, 38 percent of buyers said the Internet; 37 percent of buyers from a real estate agent; 11 percent a yard sign or open house; 6 percent from a friend, neighbor or relative; 4 percent home builders; 2 percent a print or newspaper ad; 2 percent directly from the seller; and less than 1 percent from a home book or magazine.
Local metropolitan multiple listing service websites were the most popular Internet resource, used by 59 percent of buyers; followed by Realtor.com, 45 percent; real estate company sites, 43 percent; real estate agent websites, 42 percent; other websites with real estate listings, 41 percent; and for-sale-by-owner sites, 15 percent; other categories were smaller.
Not surprisingly, for-sale-by-owner transactions reached a record low, accounting for 9 percent of sales in the 2010 study, down from 11 percent in 2009. The share of homes sold without professional representation has trended down since reaching a cyclical peak of 18 percent in 1997. “In a market as challenging as today, it’s clear most home sellers need professional assistance,” Bishop said.
The median home price for sellers who used an agent was $199,300 vs. $140,000 for a home sold directly by an owner, but there were important differences.