Webinar: 2013 Profile of Home Buyers and Sellers

Jessica Lautz November 20, 2013

Methodology
• Survey conducted with recent home buyers who purchased a home between July 2012– June 2013 • Seller information gathered from those home buyers who sold a home • Mailed 148,011 questionnaires- response rate of 6.1% • Names obtained from Experian • Data in the presentation is based on medians or the typical buyer in the category and is not all encompassing

Demographic Changes Since 2010
2010 Profile Median Age Gross HH Income Household Composition 39 $72,200 2011 Profile 45 $80,900 2012 Profile 42 $78,600 2013 Profile 42 $83,300

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

64% married couples, 18% single females, 10% single males, 7% unmarried couples

65% married couples, 16% single females, 9% single males, 8% unmarried couples

66% married couples, 16% single females, 9% single males, 7% unmarried couples

Children in Home Own a 2nd Home

35% 14%

36% 19%

41% 19%

40% 19%

Shift in Household Composition

First-time Buyer Share Remains Under Historical Norm

Multi-Generational Households
All Married Single Single Unmarried Buyers couple female male couple Other Multi-generational household 14% 13% 14% 10% 10% 49%

Reasons for purchase:
Children over 18 moving back into the house Cost Savings Health/Caretaking of aging parents To spend more time with aging parents 24% 24 20 24% 19 23 31% 28 10 18% 36 10 22% 36 12 14% 40 32

11 22

12 22

10 22

5 31

5 24

* 14

Other

Median Household Income $67,400

First-time Buyers

How Buyer Purchased a Home
Agent, 91% Builder, 4% Previous owner, 4%

Median Age 31

Median Square Feet 1,670

Reasons to Purchase Home
Establish a household
5 7 8 60 0 20 40 60 80

Type of Home Purchased
Single-family, 77% Townhouse, 8% Apt/ condo, 7% Other, 6%

Family changes Affordability Desire to own

Median Household Income $96,000

Repeat Buyers
How Buyer Purchased a Home
Agent, 86% Builder, 8% Previous Owner, 5%

Median Age 52 Median Square Feet 2,060
Type of Home Purchased

Single-family, 82% Townhouse, 6%

Reasons to Purchase Home
Closer to friends & family Desire to own Job relocation Larger home
0 10 9 12 12 16 20

Apt/ condo, 7%
Other, 5%

No New Homes to Buy
100% 80% 60% 40% 20% 21% 82% 85% 84% 84% 84%

79%

72%

79% 77% 78% 77% 79%

28%

21% 23% 22% 23% 21% 18% 15% 16% 16% 16%

0%
2001 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

New

Previously Owned

Reason for New or Previously Owned Home
New Home:
Avoid renovations or problems with plumbing or electricity Ability to choose and customize design features Amenities of new home construction communities Lack of inventory of previously owned home Green/energy efficiency Other Previously Owned Home: Better price Better overall value More charm and character Lack of inventory of new homes Other

16%
32% 25 14 10 6 13 84% 30% 28 17 9 16

Location, Location, Location

• • • • • • •

Quality of the neighborhood Convenient to job Overall affordability of homes Convenient to friends/family Quality of school district Design of neighborhood Convenient to shopping

Commuting Costs
Not Important, 27% Very Important, 32%

Somewhat Important, 41%

Environmentally Friendly Features
Heating and cooling costs Energy efficient appliances Energy efficient lighting Landscaping for energy conservation Environmentally friendly community features 21% 22% 10% 36% 36% 47% 45% 55% 49% 32% 33% 15%

9%

35% 90%

56%

Solar panels installed on home 2%8%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Very Important Somewhat Important Not Important

Compromises on Home Purchase
All Buyers 20% 18 17 14 14 13 6 5 3 2 33 First-time Buyers 22% 21 16 19 16 16 9 6 6 2 26 Repeat Buyers 19% 16 17 11 13 12 5 4 2 1 38

Price of home Size of home Condition of home Distance from job Lot size Style of home Distance from friends or family Quality of the neighborhood Quality of the schools Distance from school None - Made no compromises

Buyers who Purchased Senior Housing or in an Active Adult Community
How Buyer Purchased a Home

Median Household Income $67,400

Agent, 82% Builder, 13% Previous Owner, 6%

Firsttime buyers , 26% Repeat buyers , 74%

Median Square Feet 1,700

Type of Home Purchased

Reasons to Purchase Home
Single-family, 58%
Townhouse, 10% Apt/ condo, 18% Other, 15% Retirement Desire to own
0 10 20 18 22 30

Closer to friends & family Smaller home

10 15

Median Age 64

Expected Tenure Remains High
16 14 12 10 8 6 4 2 0 2006 2007 2008 2009 First-time Buyers 2010 2011 2012 Repeat Buyers 2013

Actual Tenure Among Sellers Remains High
10 9 8 7 6 5 4 3 2 1 0 9 8 7 9 9

6

6

6

6

6

6

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

The Search Process

Frequency of Use
Online website Real estate agent Mobile or tablet website or application Mobile or tablet search engine Yard sign Open house Online video site Print newspaper advertisement Home builder Home book or magazine 3 5 7 16 13 12 18 11 13 96 96 97 20% Frequently 40% Occasionally 60% 80% Rarely or not at all 100% 83 85 15 33 73 77 29 27 68 16 16 35 55 55 58 49 76 21 13 11 11

Billboard 1 3 Television 1 3 Relocation company 1 2 0%

Value of Website Features
Real estate news or articles Videos Information about upcoming open houses Pending sales/contract status Detailed information about recently sold properties Neighborhood information Real estate agent contact information 6 19 21 31 25 33 33 36 29 20 23 19 40 28 24 15

33
34 39 40 43 79 83% 0% 10% 20% 30% 40%

44
45 34 36 34

14
12 14 12 11 19

10
10 13 13 13 1 1

Interactive maps
Virtual video tours Detailed information about properties for sale Photos

15% 1% 1% 50% 60% 70% 80% 90% 100%

Very Useful

Somewhat Useful

Not Useful

Did not use/Not Available

Mobile Search
All First-time Buyers Buyers
Searched with an iPhone Search with an iPad Searched with an Android Found my home with a mobile application 47% 40 24 22 50% 36 25 23

Repeat Buyers
45% 43 23 22

Search with a different tablet Used QR Code that lead me to more information on the property
Found my agent with a mobile application Searched with a Windows based mobile device

8
5 4 4

7
4 5 3

8
5 4 4

Importance of Agent Communications
All First-time Repeat Buyers Buyers Buyers 78% 77% 79% 72 61 54 49 33 23 11 6 3 1 72 64 49 53 32 24 11 3 4 1 72 58 58 46 33 23 11 8 3 1

Calls personally to inform of activities Sends postings as soon as a property is listed/the price changes/under contract Sends emails about specific needs Can send market reports on recent listings and sales Sends property info and communicates via text message Has a web page Has a mobile site to show properties Sends an email newsletter Advertises in newspapers Is active on Facebook Has a blog

Buyer and Seller Changes

Tightened Inventory Affects Home Search and Selling
• Buying Side: – Buyers saw 10 homes before buying – Typically look for 12 weeks total and 2 weeks before contacting an agent – 52% of buyers reported hardest task is in process was finding the right home • Selling Side: – Typically received 97% of final asking price increase from 95% – Median time on market 5 weeks decrease from 11 weeks – 38% sellers home was on market less than 2 weeks-up from 24%

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
100 4 1 4

4

90 80 70
60 50 40 30 20 10 0

7

8

4

4

2

3

3

3

4

3

3

2

3

77 82 81 80 77 79 83 82 85 84 85 84 85 88 87 88 88

19 17 15 18 16 13 14 14 13 12 12 13 11

9

10

9

9

All FSBO (For-sale-by-owner)

Agent-assisted

Other

Reasons Behind Selling as FSBO
• Among the 9% of FSBOs – 40% knew the buyer – 60% did not know the buyer • 61% did not need to sell urgently • For FSBO sellers who did not know the buyer – 18% were contacted by a buyer they did not know asking to buy home

Hot Topics

Expenses that Delayed Saving for Downpayment or Saving for Home Purchase
60% 50% 40% 30% 23% 20% 10% 14 12 54%

43% 38 31 36 36

42

22
18

10

10

8

0%
All Buyers Student Loans Credit card debt First-time Buyer Car loan Child care expenses Repeat Buyer Health care costs

Buyer Previously Sold a Distressed Property

Sold distressed property 6% Year sold distressed property (median) 2009

Seller Wanted to Sell Earlier, But Waited or Stalled Because Home Was Worth Less Than Mortgage
All 1 year or 2 to 3 4 to 5 6 to 7 8 to 10 11 to 15 16 to 20 21 years Sellers less years years years years years years or more 12% 8% 3% 11% 19% 20% 11% 7% 7% 1 0 2 1 1 1 0 1 1

Yes, and lived in home Yes, but rented home to others and lived elsewhere No, sold home when I wanted to sell

87

92

95

88

80

79

89

92

92

Profile of Home Buyers in Sub-regions
November 04, 2013 NAR Research

Sub-regions Included
• New England (New Hampshire, Vermont, Maine, Massachusetts, Rhode Island, Connecticut) • Middle Atlantic (New York, Pennsylvania, New Jersey) • East North Central (Wisconsin, Illinois, Indiana, Ohio, Michigan) • West North Central (North Dakota, South Dakota, Minnesota, Iowa, Nebraska, Kansas, Missouri) • South Atlantic (Delaware, Maryland, West Virginia, Virginia, District of Columbia, North Carolina, South Carolina, Georgia, Florida) • East South Central (Kentucky, Tennessee, Mississippi, Alabama) • West South Central (Oklahoma, Arkansas, Louisiana, Texas) • Mountain (Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona, and New Mexico) • Pacific (Washington, Oregon, California, Alaska)

New England
Median Household Income $88,700

Household Composition
Married, 62% Single female, 16% Single male, 10% Unmarried couple, 12%

Type of Home Purchased
Single Family, 78% Townhouse, 6% Apt/ condo, 10% Other, 6%
Bought existing home, 91% Bought new home, 9%

Median Age 38

Reasons to Purchase Home
Firsttime buyers, 45% Affordability Family changes Larger home Desire to own
% 10% 20% 30% 6% 8% 12% 38% 40%

Repeat buyers, 56%

11% bought multi-generational home Reasons:  Cost savings-29%  Children over 18 moving back into house-23%  Health/caretaking of aging parents-23%  Spend more time w/aging parents-7%

Household Composition

Median Household Income $73,900

Mountain

Married, 72% Single female, 13% Single male, 10% Unmarried couple, 4% Other, 1%

Type of Home Purchased
Single-family, 86%
Townhouse, 5% Apt/ condo, 4% Other, 5% Bought existing home, 84% Bought new home, 16%

Repeat buyers , 71%

Firsttime buyers , 29%

Reasons to Purchase Home
Retirement
8% 9% 11% 24% 0% 10% 20% 30%

Median Age 48

19% bought multi-generational home Reasons:  Children over 18 moving back into house-26%  Cost savings-24%  Health/caretaking of aging parents-17%  Spend more time w/aging parents-4%

Job relocation Larger home Desire to own

Where to find NAR Research
• Jessica Lautz: jlautz@realtors.org, 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

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