Optimism and pessimism about housing
According to the 2014 National Association of Realtors® Home Buyer and Seller Generational Trends study, younger buyers are optimistic about their home and see it as a good investment, and older buyers are more likely to downsize to match changing lifestyles. Fully 80 percent of recent buyers believe their home is a good investment (87 percent of buyers age 33 and below, and 74 percent for buyers 68+).
Dr. Lawrence Yun, NAR chief economist, said Millennials are entering the peak period in which people typically buy a first home. “Given that Millennials are the largest generation in history after the baby boomers, it means there is a potential for strong underlying demand. Moreover, their aspiration and the long-term investment aspect to owning a home remain solid among young people. However, the challenges of tight credit, limited inventory, eroding affordability and high debt loads have limited the capacity of young people to own.”
NAR reports that more than one in ten recent buyers had delayed their home purchase because of outstanding debt, and of the 20 percent of Millennial buyers who took longer to save for a downpayment, 56 percent cited student loan debt as the biggest obstacle. Fifteen percent of buyers aged 34 to 48 had delayed buying, with 35 percent citing student debt and 46 percent citing credit card debt.
Interestingly, Millennials plan to stay in their home for 10 years, while the Baby Boom generation as a whole plans to stay for a median of 20 years.
Despite tight credit, Millennials are buying in droves
Even with the market frictions, the study found that the largest group of recent buyers was the Millennials, who comprised 31 percent of recent purchases; followed closely by Generation X at 30 percent. Younger Boomers accounted for 16 percent of home purchased, Older Boomers made up 14 percent, and the Silent Generation only bout 9.0 percent of homes recently.
The median age of Millennial home buyers was 29, their median income was $73,600 and they typically bought an 1,800-square foot home costing $180,000.
The typical Gen X buyer was 40 years old, had a median income of $98,200, and purchased a 2,130-square foot home costing $250,000.
Who buys in the city, who buys in the suburbs?
Although most purchases by all generations were in a suburban area, Millennials were more likely to buy in an urban or central city area, 19 percent, compared with only 12 percent of Older Boomers. The Silent Generation was more likely to buy in a small town, 24 percent; they also were more likely to purchase in senior related housing, cited by 26 percent of older respondents.
Younger buyers stayed closer to their previous residence, moving a median distance of 10 miles, whereas older buyers moved longer distances, with Older Boomers at 20 miles and the Silent Generation a median distance of 30 miles from their previous home.
The younger buyers placed higher importance on commuting costs than older generations, who placed higher importance on energy efficiency, landscaping and community features.
How generations find their home
As has been the case for many years now, the home buying process begins online for most buyers, and the next step is contacting an agent, but Millennials stood out for looking online for information about the home buying process before contacting an agent.
Younger buyers were more likely to first learn about the home they purchased through the web; Older Boomers and the Silent Generation most often first learned about the home they purchased from their real estate agent.
Younger buyers relied on real estate agents to help them understand the buying process, while older buyers most appreciated real estate agents pointing out unnoticed features or faults with the property.
Buyers of all ages were most often referred to their agent by a friend, neighbor or relative, although older buyers were more likely to have worked with the same agent they previously used to buy or sell a home. In choosing a real estate agent, the agent’s honesty and trustworthiness was the most important factor for all ages except for senior buyers, who more often mentioned the agent’s reputation, which was the second most important factor for other age groups.
Nearly nine out of ten buyers of all ages were satisfied with their agent’s honesty and integrity, knowledge of the purchase process, and knowledge of the real estate market. A comparable level would be likely to use their agent again or recommend to others.
Why did each generation buy and/or sell?
Younger buyers typically moved to larger, higher priced homes, but there is a clear trend of downsizing to smaller homes among both Younger and Older Baby Boomers, and the Silent Generation.
The reasons for selling a home also varied by generation. Younger sellers were more likely to need a larger home or move for job relocation. In comparison, older buyers wanted to be closer to family or friends, or said their home was too large or they were moving due to retirement.
The older the seller, the longer they were in their home. Millennials had been in their previous home for a median of five years, while the Silent Generation stayed for 14 years.
Sellers of all ages also typically found a real estate agent through a referral or friend, or used the same real estate broker or agent from a previous transaction.
While all sellers wanted help in marketing their home to potential buyers, younger sellers were more likely to want their agent to help with selling the home within a specific timeframe and pricing the home competitively.
Images below courtesy of the National Association of Realtors:
Austin tops the list of best places to buy a home
When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?
Looking at the bigger picture
(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).
That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).
They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.
“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”
Average age of houses on the rise, so is it now better or worse to buy new?
With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.
The average home age is higher than ever
(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.
With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.
Prices of new homes on the rise
Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.
Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?
The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.
Why Realtors are vulnerable to these rapid changes
(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.
Note: We’ll let you decide which company plays which role in the image above.
So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.
1. Zillow poaches top talent, Move/NAR sues
It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.
Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.
2. Two major media brands emerge
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