2010 Profile of Home Buyers and Sellers

Jessica LautzDecember 9, 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 111,004 questionnaires • Received 8,449 responses • Response rate of 7.9%• Names obtained from Experian

Home Buyers

Typical buyer:• 39-years-old• $72,200• 58% married• 20% single females• 12% single males• 8% unmarried couples• 35% have children in home

Who is buying today?

Share of First-Time Buyers

Who is buying today?

First-time Buyer: Repeat Buyer:30-years-old 49-years-old$59,900 $87,00048% married 68% married23% single females 17% single females15% single males 9% single males12% unmarried couples

4% unmarried couples

32% have children 37% have children

Why do buyers want to own today?

All BuyersFirst-time

BuyersRepeat Buyers

Desire to own a home of my own 31% 53% 10%

Desire for larger home 9 2 15

Change in family situation 8 7 10

Home buyer tax credit 8 13 3

Job-related relocation or move 7 2 12

Affordability of homes 6 8 4Desire to be closer to family/friends/relatives 5 1 10

Desire for a home in a better area 5 2 7

What homes are being sold?

Typical home purchased:• 85% of homes were previously

owned• 77% detached single family

homes• Built in 1990• 1,780 square feet• 3 bedrooms/2 full baths• More than half of homes

purchased were in the suburbs• Buyers typically moved 12 miles

Location, Location, Location

• Quality of the neighborhood • Convenient to job• Overall affordability of homes • Convenient to friends and

family • Quality of the school district • Convenient to shopping

Expected Tenure in Home

Importance of Commute Costs

Importance of Energy Efficiency

Senior-related housing

Share who purchased a home in senior related housing (among buyers over 50) 11%Type of Home Purchased:Detached single-family home 51%Townhouse/row house 9Apartment/condo in building with 5 or more units 13Duplex/apartment/condo in 2 to 4 unit building 9Other 17

The Search Process

First Step in Buying Process

All Buyers

AGE OF HOME BUYER

18-24 25-44 45-64 65 or older

Looked online for properties for sale 36% 34% 40% 36% 21%

Contacted a real estate agent 19 16 16 21 35

Looked online for information about the home buying process

11 16 13 8 4

Contacted a bank or mortgage lender 8 11 9 7 4

Drove-by homes/neighborhoods 7 4 5 10 12

Talked with a friend or relative about home buying process

7 13 8 4 6

Visited open houses 4 2 2 5 9

Frequency of Use of Different Information Sources

Usefulness of Information Sources

Length of the Search Process

Number of Weeks Searched

Where Buyer Found Their Home

Satisfaction With Buying Process

Method of Home Purchase

What do buyers want from real estate professionals?

Benefits Buyers Had When Using an Agent

All BuyersFirst-time

BuyersRepeat Buyers

Helped buyer understand the process 66% 80% 53%

Pointed out unnoticed features/faults with property 53 55 50

Negotiated better sales contract terms 42 43 40Improved buyer's knowledge of search areas 42 41 43Provided a better list of service providers 41 41 42

Negotiated a better price 34 34 34

Referrals Matter

• 57% used an agent that was referred to them or they had worked with before

• 65% would definitely refer their agent or work with them again—22% probably would

• 64% of home buyers contacted only 1 agent during their search process

Financing the Home Purchase

Median Percent of Home Financed

• 91% of home buyers financed their home purchase

• First-time buyers typically finance 96%• Repeat buyers typically finance 86% • Share of buyers who financed 100% of

their home purchase dropped from 23% in 2008 to 14% of buyers in 2010

Sacrifices

• Cut spending on luxury items

• Cut spending on entertainment

• Cut spending on clothes • Cancelled vacation

plans

Home Buyer Tax Credit

All BuyersFirst-time

Buyers Repeat Buyers

Used tax credit 71% 93% 48%

Did not qualify for tax credit 27 6 49

Was not aware of tax credit 2 1 3

Housing a Good or Bad Financial Investment?

All Buyers

Good financial investment 85%

Better than stocks 47

About as good as stocks 30

Not as good as stocks 9

Not a good financial investment 4

Don't know 11

Home Sellers

Typical seller:• 46-years-old• $90,000• 75% married• 16% single females• 6% single males• 3% unmarried couples• 40% have children in home• Typically lived in their

home for 8 years

Who is selling today?

Home Selling Situation

Why are sellers moving?

• Home is too small• Job relocation• Want to move closer to

friends or family• Neighborhood has

become less desirable• Change in family situation

(e.g., marriage, birth of a child, divorce)

Trade up or down?

• 55% purchased a more expensive home

• 51% purchased a larger home

• 57% purchased a new home

Selling Market Today

• Sellers typically received 96% of their asking price for the home

• 57% of sellers reduced their asking price

• 44% offered incentives• Homes were typically

on the market 8 weeks

Equity Earned in Home

TENURE IN HOME All Sellers Dollar value Percent1 year or less $37,626 17%2 to 3 years $0 0%4 to 5 years $6,000 3%6 to 7 years $17,000 11%8 to 10 years $35,000 26%11 to 15 years $49,000 40%16 to 20 years $79,100 78%21 years or more $108,300 152%

Median $33,000 24%

Satisfaction With Selling Process

Method Used to Sell Home

What do sellers want from their real estate professional?

• Help price home competitively • Help find a buyer for home • Help seller market home to

potential buyers• Help sell the home within

specific timeframe

Method to Market Home

All HomesListing on the Internet 91%Yard sign 79Open house 56Print newspaper advertisement 28Real estate magazine 25Other Web sites with real estate listings 25Direct mail (flyers, postcards, etc.) 16Video 12Social networking Web sites 5Television 2Video hosting Web sites (e.g., YouTube, etc.) 2Other 5

Buyer Side: Use of Information Sources

Referrals Matter

• 64% used an agent that was referred to them or they had worked with before

• 63% would definitely refer their agent or work with them again an additional 21% probably would

• 66% of home sellers contacted only 1 agent during their search process

FSBO Sellers

FSBO Experience

• Most cited reason for FSBO selling: – Did not want to pay a

commission or fee (38%) – Sold to friend or relative (32%)

• Most difficult tasks:– Getting the price right (23%)– Preparing or fixing up the

home for sale (18%)

FSBO Selling Market

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%

Where to Find Your Copy

Via the “Right Tools, Right Now” webpage:http://www.realtor.org/prodser.nsf/RightTools/ResearchTools?OpenDocument