John L. Scott Convention Jessica Lautz National Association of REALTORS ® October 30, 2014.

John L. Scott Convention

Jessica LautzNational Association of REALTORS®

October 30, 2014

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

Share of Home Sales

2014 Investment and Vacation Home Buyers Survey

Buyer Demographic Changes

Profile of Home Buyers and Sellers

2010 Profile

2011 Profile

2012 Profile

2013 Profile

2014 Profile

Median Age

39 45 42 42 44

Gross HH Income

$72,200 $80,900 $78,600 $83,300 $84,500

Household Composition

58% married couples, 20% single females, 12% single males, 8% unmarried couples





Children in Home

35% 36% 41% 40% 35%

Own a 2nd Home

14% 19% 19% 19% 21%

Shift in Household Composition

2014 Profile of Home Buyers and Sellers


Rise in Household Income

First-time Buyer Share Remains Under Historical Norm


Young Adult Homeownership Rate

Home Prices Outpacing Incomes(under 35 years old)

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

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 9 4 12Desire for a home in a better area 8 2 11Change in family situation 8 5 9Desire for larger home 7 1 10Affordability of homes 5 8 3Desire to be closer to family/friends/relatives 3 1 4Retirement 3 * 5Establish a household 3 7 1Desire for smaller home 3 * 4Financial security 3 6 1


Buyers’ View of Homes as a Financial Investment

All Buyers

Married

couple

Single

female

Single

male

Unmarried

coupleGood financial investment 79% 79% 78% 81% 83%

Better than stocks 40 39 46 40 37About as good as stocks 27 27 25 24 33Not as good as stocks 12 13 7 17 13

Not a good financial investment 7 7 6 8 6Don't know 14 14 15 12 12


Expenses that Delayed Saving for Downpayment or Saving for Home

Purchase


All

BuyersFirst-time

BuyersRepeat Buyers

Share Saving for Downpayment was Most Difficult Task in Buying Process:

12% 23% 7%

Debt that Delayed Saving: Credit card debt 50% 45% 58%Student Loans 46 57 28Car loan 38 42 32Child care expenses 17 13 24Health care costs 12 8 17Other 8 5 14

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

Multi-generational Home

All Buyers

Married couple

Single female

Single male

Unmarried

coupleMulti-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 23 26 23 17 3Health/Caretaking of aging parents 18 19 18 14 22To spend more time with aging parents 10 12 8 6 14Other 24 22 26 32 25


Pent Up Demand

2000 2013

Existing Home Sales

5.2 m 5.1 m

New Home Sales 880 K 430 K

Mortgage Rates 8.0% 4.0%

Payroll Jobs 132.0 m 136.4 m

Population 282 m 316 m

Seller Wanted to Sell Earlier But Waited or Stalled Because the Home Was Worth Less

than the Mortgage


Actual Tenure Among Sellers Remains High


Expected Tenure Remains High


Force Buyer to Move Again

Married

couple

Single femal

eSingle

male

Unmarried

coupleMove with life changes (addition to family, marriage, children move out, retirement, etc.) 40% 55% 49% 44%Never moving-forever home 24 24 15 16Move with job or career change 20 9 13 20May desire better area/neighborhood 9 7 12 13May outgrow home 7 4 7 14Will flip home 1 1 3 3Other 6 5 7 4


Home Type and Location

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 1993• 12 miles from past residence for buyers2014 Profile of Home Buyers and Sellers

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


Commuting Costs

Environmentally Friendly Features—Good for Earth and Wanted by clients

Compromises on Home Purchase

All Buyer

s

First-time

BuyersRepeat Buyers

Price of home 23% 25% 21%Size of home 20 27 17Condition of home 18 19 17Lot size 16 18 15Style of home 16 18 14Distance from job 14 18 11Distance from friends or family 7 9 6Quality of the neighborhood 5 6 5Quality of the schools 4 7 2Distance from school 2 3 1None - Made no compromises 33 25 36


Inventory Still Tight

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


Most Important Factor Limiting Clients

ALL REALTORS®

Difficulty in finding the right property 33%Difficulty in obtaining mortgage finance 25No factors are limiting potential clients 16Ability to sell existing home 7Expectation that prices might fall further 6Low consumer confidence 6Concern about losing job 1

2014 Member Profile

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


Agent Assisted Sales High


Buyer Use of Online Agent Recommendations


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 clients21% of business from referrals from past consumers and clients

2014 Profile of Home Buyers and Sellers, 2014 Member Profile

How and How Many Times Contact Agent

MethodPhone call 56%E-mail 21Contacted friend/family 7Web form on home listing website 5Text message 3Through agent's website 3Social Media (FaceBook, Twitter, LinkedIn, etc.) 2Other 4Number of Times Contacted (median) 1


Call Them Back!Number of Agents Buyer Interviewed Before Picking

Agent Used


The Search Process

Frequency of Use

Value of Website Features


Make Your Site Mobile Ready

All Buyer

s

First-time

Buyers

Repeat

Buyers

Searched with an iPhone 52% 54% 51%Search with an iPad 46 39 50Searched with an Android 27 33 23Found my home with a mobile application 27 30 24Search with a different tablet 10 11 9Searched with a Windows based mobile device 6 5 7Found my agent with a mobile application 4 4 4Used QR Code that lead me to more information on the property 3 3 4


Keep in Contact

All Buyer

s

First-time

Buyers

Repeat

Buyers

Calls personally to inform of activities 79% 75% 80%Sends postings as soon as a property is listed/the price changes/under contract 69 69 69Sends emails about specific needs 59 60 58Can send market reports on recent listings and sales 51 47 54Sends property info and communicates via text message 45 48 44Has a web page 29 29 30Has a mobile site to show properties 25 25 25Sends an email newsletter 10 11 10Advertises in newspapers 6 5 7Is active on Facebook/Twitter 6 7 5Has a blog 1 1 12014 Profile of Home Buyers and Sellers

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


Where to find NAR Research

• Jessica Lautz: [email protected], 202-383-1155• NAR Research www.

realtor.org/research-and-statistics • Economists’ Outlook Blog:

economistsoutlook.blogs.realtor.org • Facebook: facebook.com/narresearchgroup• Twitter: twitter.com/NAR_Research

mailto:[email protected]

http://www.realtor.org/research-and-statistics

http://www.realtor.org/research-and-statistics

http://economistsoutlook.blogs.realtor.org/

http://www.facebook.com/narresearchgroup

http://www.facebook.com/narresearchgroup

https://twitter.com/NAR_Research

https://twitter.com/NAR_Research

John L. Scott Convention Jessica Lautz National Association of REALTORS ® October 30, 2014.

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Transcript of John L. Scott Convention Jessica Lautz National Association of REALTORS ® October 30, 2014.