The 2015 National Association of Realtors Profile of Home Buyers and Sellers has just been released, and it is filled with mixed news. The share of first time buyers is slipping from historic averages which is concerning, but home values are increasing and sellers are walking away with more cash.
But what of home sellers? Let’s dig deeper into who they are and what they want.
Average age and income
This year, the typical home seller was 54 years old, the same as 2013, but up from 46 in 2009. The majority (91 percent) identified as white with English as their primary language.
The median household income for a home seller is $104,100 which is a substantial jump from last year’s $96,700.
The report notes that incomes in the Northeast and South were higher this year than in the West and Midwest.
Why home sellers sold this year
The desire to move into a larger home was the most commonly cited reason for selling this year at 16 percent, followed closely by a job relocation (14 percent), and the desire to move closer to friends and family (13 percent).
42 percent of sellers traded up and purchased a home that was larger in size than what they previously owned, 29 percent bought a home that was similar in size and 31 percent traded down and purchased a home that was smaller in size.
Buyers over 65 typically downsized by 200 square feet, while Millennials (34 and younger) purchased a home 600 square feet larger.
According to the report, “Buyers age 35 to 44 traded up the most, purchasing homes that were 700 feet larger in square feet.”
Sellers are moving out faster today
Sellers typically lived in their home for nine years before selling, declining from 10 years in last year’s report. That number is still higher than reported in 2001 to 2008 where the tenure in the home was only six years.
Millennial sellers had the shortest tenure in their homes – sellers aged 18-34 sold their home within five years, compared to those over 75 years of age who sold their home typically after 18 years.
FSBOs wane in popularity
Most home sellers (89 percent) worked with a real estate agent, with FSBOs falling to only 8.0 percent, which is below the historical norm.
As a point of reference, from 2001 to 2008 the share of FSBO sales ranged from 12 percent to 14 percent.
Working with an agent was highest in the West at 93 percent and lowest in the Northeast at 86 percent, which stayed the same from last year. Conversely, FSBO sales were highest in the Northeast at 11 percent and lowest in the West at just six percent.
Fetching higher sales prices
For recently sold homes, the final sales price was a median 98 percent of the final listing price and were on the market for a median of four weeks.
“Tightened inventory continues to cause prices to increase in many areas of the country,” notes the report. “While housing inventory is reduced in many areas, sellers see a favorable market where they receive a median of 98 percent of their asking price and sell their home typically within four weeks.”
Fully 37 percent of all sellers offered incentives to attract buyers, with home warranty policies and closing cost assistance as the top two listed incentives.
Why did some delay selling?
Real estate professionals do well to understand buyer and seller objections. This year, the biggest stumbling block to selling was being underwater in their mortgage. That share of sellers dropped from 17 percent in the 2014 report to 14 percent in the 2015 report.
According to NAR, “Sellers who purchased their home eight to 10 years ago continue to report stalling their home sale at higher rates – 29 percent of seller reported delaying their home sale.”
Those who sold saw big gains
Home sellers cited that they sold their homes for a median of $40,000 more than they purchased it, up from $30,100 the year prior.
This accounts for a 23 percent price gain up from 17 percent the year before. While underwater homeowners account for a delay in some sales, of those that put their homes on the market, the average return spiked this year.
Sellers who owner their homes for one to seven years, all reported selling their homes from roughly $30-35,000 more than they purchased it. That number drops drastically to only $3,000 between eight and 10 years, and then appreciates steadily. Homes sold after 21 years reported a price gain of $138,000.