2012 National Association of Realtors Profile of Home Buyers and Sellers
The 2012 National Association of Realtors Profile of Home Buyers and Sellers surveys the motivations, plans, experiences, preferences and demographics of buyers and sellers throughout the United States. The results are heavily represented by owner occupied residences and investors are often not included in the findings. Below are an array of incredibly useful statistics that highlight what all types of individuals have been going through in the housing market and determines what the latest trends are.
- 65% of all buyers are married couples
- 16% of all buyers are single women
- 9% of all buyers are single men
- 8% of all buyers are unmarried couples
- 2% of all buyers are other
Conclusion: The percentage of single buyers in 2012 was slightly lower than it was in 2011.
- For 2010 as a comparison, 58% of all buyers were married
- 20% of all buyers were single women
- 12% of all buyers were single men
- 7% of all buyers were unmarried couples
Conclusion: Overall market share of single buyers is down 7% in the last two years.
- First time home buyers made up 39% of the market share so far in 2012
- In 2011, 37% of the market was from first time home buyers
Conclusion: Therefore, this year roughly 4/10 buyers are first time home buyers.
- Median age for first time home buyers is 31
- Median income for first time home buyers is $61,800
- Typical size of first time home buyers purchased property is 1,600 square feet
- Typical price of first time home buyers purchased property is $154,100
- Repeat buyers median age is 51
- Median income for repeat buyers is $93,100
- Typical size for repeat buyers purchased property is 2,100 square feet
- Typical price for repeat buyers purchased property is $220,000
- Median downpayment for all home buyers is 9%
- Downpayment for first time buyers is at 4%
- Downpayment for repeat buyers is at 13%
Conclusion: Coming from Paul Bishop, NARs Vice President of Research; "First-time buyers historically make small downpayments, but repeat buyers like to put down 20 percent if they can to avoid paying mortgage insurance. The general loss in home value since the peak of the housing boom means many repeat buyers in recent years had to make smaller downpayments. Fortunately, prices have turned up this year and are showing sustained increases, so we're on the road to a recovery in home equity."
- For first time home buyers who financed their purchase; 76% tapped into savings
- 24% received a gift from a friend or a relative
- 6% received a loan from a friend or a relative
- 11% tapped into their 401(k) fund
- 6% sold stocks or bonds
- Finally, 93% of first time buyers entered into a fixed-rate mortgage
Conclusion: Often first time buyers do not have the means themselves to afford a property at the current time, however with rates being as low as they are and a favorable Real Estate market being present, the time to buy and dip into other funds is a clear choice.
- 46% of first-time buyers financed with a low-down payment FHA mortgage
- 10% used the VA loan program with no down payment requirements
- 42% cut spending on luxury items to buy their first home
- 35% cut spending on entertainment
- 27% cut spending on clothes
Conclusion: Clearly sacrifices have to be made in order to satisfy ones dream of owning a home. Although the Real Estate market has been seen as a buyers market in some locations, people still nonetheless must adjust their lifestyle to buy the home they truly desire in their attempts not to settle. Buying a home, as we know, is often the most important financial decision one will ever have to face in their lifetime and therefore other luxuries in life come second and are no longer as important.
- 78% of recent home buyers said their home is a good investment
- 46% believe it's better than stocks
- 92% were satisfied with the buying process
Conclusion: Confidence in the purchase of ones home is increasing with individuals buying and looking to have a prosperous future for their investment.
- Buyers who used an agent searched for a median of 12 weeks
- Buyers who used an agent saw a median of 10 homes
- In 2011, buyers who used an agent saw a median of 12 homes
Conclusion: "The decline in the number of homes visited reflects a tighter inventory environment that became more pronounced during the second half of the survey period," Bishop explained. "It makes sense that buyers are seeing fewer homes in the current market."
- 90% of buyers use the Internet for their searches
- 87% of buyers use Real Estate agents
- 53% use yard signs
- 45% attend open houses
- 27% view print or newspaper advertisements
Conclusion: Essentially one can deduce from these results that the Internet is becoming an increasingly valuable tool for marketing property. Also, the near percentages of using an agent and the Internet suggests that the agents who market themselves and their listings to the best degree online are the ones who are successful at selling properties to these prospective buyers.
- 42% of buyers first learned about the home they already purchased on the Internet
- 34% first learned about the home from a Real Estate agent
- 10% from a yard sign
- 6% from a friend, neighbor or relative
- 5% from home builders
- 2% learned directly from the seller
- 1% from a print or newspaper advertisement
- <1% from another source
Conclusion: This only further reiterates the importance of having an online presence as highlighted above.
- 91% of those who used the Internet to find a home purchased it through a Real Estate agent
- 71% of non-Internet users purchased a home through a Real Estate agent
Conclusion: Those who are non-Internet users are more likely to purchase directly from an owner they know from a previous transaction or directly from a homebuilder.
- The most popular were local MLS serviced websites, as 54% of buyers used these during their search
- 51% of buyers used Realtor.com which was the second most popular avenue
- 47% used Real Estate agent websites
- 39% used Real Estate company websites
- 27% used other various websites that share property listings
- 19% used general search engines
- 13% used mobile or tablet applications
- 13% used for-sale-by-owner websites
- 12% used mobile or tablet websites
- 11% used mobile or tablet search engines
Conclusion: Updated listings in your local MLS will provide the best results as well as opening an account on Realtor.com and keeping it constantly updated with personal advertisements and featured property options.
- Sellers have been in their home for a median of 9 years
- First time buyers plan on living in their new home for 10 years
- Repeat buyers plan on living in their new home for 15 years
Conclusion: First time home buyers are more likely to look to upgrade sooner as their income path will climb at a higher rate than that of repeat buyers, as well as they will eventually need greater space when they start a family. Most sellers from this data can thus be asumed o be those who are in their first home as first time home buyers who are then looking to upgrade and become repeat buyers in a different residence.
- 61% of buyers feel the quality of the neighborhood is their biggest decision
- 43% of buyers care the most about the convenience of the home to their job
- 39% are most concerned about the affordability of their home
- 35% feel the homes proximity to friends and family is the most important
- 26% noted that the distance to shopping was their number one factor
- 26% care the most about the neighborhoods design
- 25% informed us that the quality of the neighborhoods school district is vital
- 22% have the convenience of the home to schools as the determining item
- 19% want their home to be a short distance to leisure and entertainment activities
Conclusion: Commuting costs continue to factor strongly in decisions regarding location, with 75% of buyers saying transportation costs were important.
- 79% of buyers purchased a detached single-family home
- 8% purchased a condo
- 6% bought a townhouse or a rowhouse
- 7% closed on a different type of property
Conclusion: The typical home sold throughout the Country from the above figures had three bedrooms and two bathrooms.
- 51% of the properties purchased by all buyers were in the suburbs or a subdivision
- 18% of all buyers bought a home in a small town
- 17% bought in an urban area
- 12% purchased in a rural area
- 3% of all buyers bought in a resort or recreation area
Conclusion: Throughout all of the purchases made by all buyers, it comes to be known that the median distance that people decided to move to was only eleven miles from their previous residence.
- 89% of buyers used Real Estate agents and brokers to purchase a home
- 6% purchased directly from a builder
- 5% purchased directly from the previous owner
- 59% of buyers working with real estate professionals had a buyer representative arrangement
- 84% of sellers are likely to use the same Real Estate agent again in a future transaction or recommend them to a neighbor, family or a friend
- 89% of buyers are likely to use the same Real Estate agent again in a future transaction or recommend them to a neighbor, family or a friend
- 2 out of 3 sellers only interviewed 1 agent to represent their property
- 80% of sellers using a Real Estate agent for their home used a full service brokerage where agents provide a broad range of services and manage most of the aspects of selling a home
- 8% of sellers used a limited brokerage where discounts may be had
- 12% of sellers used a minimal brokerage which can be as little as just listing it on MLS
Conclusion: Evidently most people use a Real Estate agent to purchase their home, showing just how essential it is to have personal branding strategies in order to differentiate oneself and stand out amongst the crowd to the buying populace. Sellers found that trustworthiness and reputation were the most important factors when finding a Real Estate agent to work for them.
- 30% of all home buyers say the biggest reason they buy a home is the simple desire to own a home of their own
- 60% of just first time home buyers say the biggest reason people buy a home is the simple desire to own a home of their own
- 11% of people buy a home to live in a larger home
- 9% bought a home as a job related move
- 8% bought a home as a family related situation
- 7% bought a home to take advantage of the current affordability of properties
Conclusion: The doubled percentage (30% for all buyers to 60% for first time buyers) accounting for the reason first time home buyers wanted to purchase a home of their own simply shows how important the notion of The American Dream is alive and well amongst the public.
- 15% of people currently own two homes
- 5% of people currently own three or more homes
- The typical home seller was 53 years old and their average income was $95,400
- These sellers then moved a median 19 miles to their next home
- The average days on the market for these sellers was at 11 weeks
- 46% of these sellers then moved to a larger home
- 29% bought a property of comparable size
- 25% downsized and moved into a home with less square footage and bedrooms
Conclusion: It is interesting to note that the average repeat buyer is 51 while the average home seller is 53, both with very comparable average annual incomes. These sellers looked to move roughly nineteen miles from their prior residence while new buyers averaged an eleven mile move. With less than half of these over 50-year old individuals of substantial incomes moving to homes that are of comparable or even smaller size, it leads one to believe that this is a very popular age when couples become empty nesters and need to downsize or move simply to retire.
- The typical seller, who purchased a home nine years earlier, realized a median equity gain of $20,000, a 12% increase over the original purchase price
- Sellers who were in their homes for 11 to 15 years saw a median gain of $54,000, or 31% increase
- 12% of sellers do not plan to sell their previous home
- 6% of sellers say their home has not sold yet and it is currently rented
- For-sale-by-owner transactions accounted for 9% - A record low since 2010 and down 10% from 2011
- 20% of FSBOs said they were contacted directly by a buyer - Up 15% from 2010
Conclusion: This is another indication of the tight inventory situation that is developing in various parts of the country, notably in the West. Many FSBO properties are not sold on the open market. Factoring out private sales between parties who knew each other in advance, the actual number of homes sold on the open market without professional assistance was 6%.
- Median selling price for sellers who used a Real Estate agent was $215,000
- Median selling price for sellers who were FSBOs was $174,900
- The median income for sellers who used a Real Estate agent was $97,600
- The median income for FSBOs was $80,400
Conclusion: The study shows that FSBOs were more likely to be selling in central city areas and be of smaller size, indicating lesser values. It can be inferred from the data that those FSBOs who on average earn less money choose to not use a Real Estate agent in order to avoid the Realtors commission fees.
Finally, it appears as though dual income households have proven to be the most valuable sector of society that is fueling a housing recovery. Today more than in times from the recent past, dual income households are taking up a more substantial portion of the housing market and have been seen to be the most active of late. 2013 should follow very similar trends as this year has done and the market as a whole is predicted to be even more successful, experts believe.
More Information: Yahoo Finance (NAR)
