The 2015 National Association of Realtors Profile of Home Buyers and Sellers has just been released, and we’ve learned that home sellers averaged $40k in equity this year, and that the average buyer is a 44 year old married white couple.
But the question all real estate agents want to know is – how do consumers find you? Let’s discuss the steps of the process and what trends shifted this year.
The first step that buyers take
For nearly half of all recent buyers (42 percent), the first step taken in the home buying process was, of course, to look online at homes for sale.
Interestingly, more than one in ten buyers (14 percent) contacted a real estate agent before even looking online at properties.
Although not all began their process online, most (92 percent) used the web at some point during the home search process. This is an important distinction, given that many misquote this statistic, claiming that everyone starts their hunt online before contacting an agent.
What role the web played
Now that you know how many people begin their search online, it is noteworthy that over half of this year’s home buyers used a mobile or tablet to search for a home, indicating the continued relevancy of mobile-ready sites and apps.
Of the home buyers who shopped online, roughly half found the home online that they ultimately purchased.
Enter the real estate agent
Good news for agents – 78 percent of home buyers said their agent was a “very useful information source.”
Bad news for agents – you came in second place, as 82 percent said online websites were a “very useful information source.” Womp womp.
One point that should be made is that the first step of contacting an agent increased as the age of the home buyer increased. Interesting.
That said, the NAR report notes, “It is evident that while a majority of home buyers are using the Internet during the home searching process, the Internet cannot replace the role of the real estate agent in the transaction.”
Challenges to the process
The majority (91 percent) said they were happy with the home buying process, which is up a bit from 2014’s 89 percent.
One in three home buyers that used an agent said that “finding the right property” remains one of the most difficult steps in the process.
Home buyers who didn’t use the web averaged five weeks searching and visited five homes, while web searchers spent 10 weeks hunting and visited 10 homes. First-time buyers average 12 weeks searching before buying.
Further, buyers who used an agent spent an average of two weeks searching before finally contacting an agent.
Home buyers said the other challenges during the process include paperwork (23 percent), followed by understanding the process (14 percent).
Of note, 17 percent said that they had “no difficult steps” during the home buying process, especially common among repeat buyers.
Converting web to in-person tours
NAR reports that “As a result of searching for a home on the Internet, 65 percent of buyers are walking through the homes that they viewed online, and 38 percent are looking at the exterior of these homes and driving through the neighborhoods.”
It’s no surprise that first-time buyers were the most likely to request more information as a result of searching online.
Buying up foreclosures
With fewer foreclosures on the market this year compared to say, 2009, who is buying foreclosure inventory?
Although 41 percent considered purchasing a home in foreclosure, the top reason for ultimately not purchasing a foreclosure property was not being able to find the right one.
NAR reports, “This year, first-time buyers made up the largest group who considered purchasing a home in foreclosure.”
Home sales on the rise – don’t call it a comeback (okay, do)
(REAL ESTATE) Inventory levels continue to fall as prices rise, making for a competitive market. After a tough winter, February saw considerable gains in home sales.
For years, inventory levels have been sinking, and prices have been growing, making the home buying process increasingly complex and sometimes discouraging. But after two consecutive months of declining sales, existing-home sales made a comeback in February, rising 3.0 percent, according to the National Association of Realtors (NAR). Sales are now 1.1 percent higher than February of last year. #GoodNews
Although home sales in the Midwest and Northeast saw a dip in this period, the South and West regions skyrocketed, boosting the national numbers.
Dr. Lawrence Yun, NAR’s Chief Economist noted that “The very healthy U.S. economy and labor market are creating a sizeable interest in buying a home in early 2018. However, even as seasonal inventory gains helped boost sales last month, home prices – especially in the West – shot up considerably. Affordability continues to be a pressing issue because new and existing housing supply is still severely subpar.”
Added Yun, “The unseasonably cold weather to start the year muted pending sales in the Northeast and Midwest in January and ultimately led to their sales retreat last month. Looking ahead, several markets in the Northeast will likely see even more temporary disruptions from the large winter storms that have occurred in March.”
In February, the median home price rose to $241,700, a 5.9 percent increase from February 2017, and the 72nd straight month of annual gains. The average days on market fell to 37, down from 41 in January, and 45 last February. That’s what we call a competitive market.
NAR President Elizabeth Mendenhall comments on the difficulty first-time buyers are seeing in this competitive market. “Realtors® in several markets note that entry-level homes for first-timers are hard to come by, which is contributing to their underperforming share of overall sales to start the year. Prospective buyers should start conversations with a Realtor® now on what they want in a new home. Even with the expected uptick in new listings in coming months, buyers in most markets will likely have to act fast on any available listing that checks all their boxes.”
Regional performance varied, with sales in the West outperforming all other regions. While sales fell in the Northeast by 12.3 percent, and dropped 2.4 percent in the Midwest, they skyrocketed 11.4 percent in the West, and 6.6 percent in the South.
Existing home sales surged in October, what’s next?
(REAL ESTATE NEWS) Existing home sales rose in October despite continually tight inventory levels and rising home values.
Despite the challenges of ongoing political uncertainty, extremely tight inventory conditions, and home values that continue to rise, existing home sales rose 2.0 percent in October, according to the National Association of Realtors (NAR).
This marks the strongest home sales pace since June, yet are 0.9 percent below October 2016. October’s average days on market was 34, down from 41 days on this month last year.
The median price has risen 5.5 percent in the last year to $247,000 with October marking the 68th consecutive month of annual increases. Nearly half of all homes on the market in October sold in under 30 days.
Dr. Lawrence Yun, NAR Chief Economist said, “While the housing market gained a little more momentum last month, sales are still below year ago levels because low inventory is limiting choices for prospective buyers and keeping price growth elevated.”
Added Yun, “The residual effects on sales from Hurricanes Harvey and Irma are still seen in parts of Texas and Florida. However, sales should completely bounce back to their pre-storm levels by the end of the year, as demand for buying in these areas was very strong before the storms.”
Regional performances varied with sales rising in the Northeast by 4.2 percent, in the West by 2.4 percent, the South by 1.9 percent, and 0.8 percent in the Midwest.
Prices also varied depending on region, with the median price in the West rising 7.8 percent above October 2016 (to $375,100), 6.6 percent in the Northeast (to $272,800), 7.1 percent in the Midwest (to $194,700), and 4.6 percent in the South (to $214,900).
Dr. Yun expects conditions to remain competitive through the winter, but housing is experiencing a tremendous hanging chad right now – what will politicians do to the tax deductions that incentivize homeownership in the first place?
NAR President Elizabeth Mendenhall, says the pending tax reform legislation in both the House and Senate is a direct attack on homeowners and homeownership, with the result being a tax increase on millions of middle-class homeowners in both large and small communities throughout the U.S.
“Making changes to the mortgage interest deduction, eliminating or capping the deduction for state and local taxes and modifying the rules on capital gains exemptions poses serious harm to millions of homeowners and future buyers,” said Mendenhall. “With first-time buyers struggling to reach the market, Congress should not be creating disincentives to buy and sell a home. Furthermore, adding $1.5 trillion to the national debt will raise future borrowing costs for our children and grandchildren.”
Sustained lull in signed contracts means pullback in home sales
(REAL ESTATE NEWS) Existing home sales aren’t looking super hot this month, but it’s not the bad news that you’re thinking – let’s discuss!
Existing home sales slide in June
Low supply has kept home sales muted, with existing home sales dipping 1.8 percent in the month of June, albeit 0.7 percent above June of 2016, according to the National Association of Realtors. The Midwest region is the current bright spot as the only area sales actually rose during this period.
Dr. Lawrence Yun, NAR Chief Economist, says the previous three-month lull in contract activity translated to a pullback in existing sales in June.
“Closings were down in most of the country last month because interested buyers are being tripped up by supply that remains stuck at a meager level and price growth that’s straining their budget,” said Yun.
He added, “The demand for buying a home is as strong as it has been since before the Great Recession. Listings in the affordable price range continue to be scooped up rapidly, but the severe housing shortages inflicting many markets are keeping a large segment of would-be buyers on the sidelines.”
There’s a silver lining
“The good news is,” observes Yun, “that sales are still running slightly above last year’s pace despite these persistent market challenges.”
The median price for an existing home rose 6.5 percent over the last year to $263,800, surpassing May as the new peak, and the 64th consecutive month of year-over-year gains.
Housing inventory declined 0.5 percent from the previous month, and 7.1 percent over the last year. Average days on market rose one day from May to 28 in June, which is down from 34 days in June 2016.
Supply and demand challenges
First time buyers were 32 percent of sales in June, down one percent from both in May and a year ago. Yun says “It’s shaping up to be another year of below average sales to first-time buyers despite a healthy economy that continues to create jobs,” said Yun.
“Worsening supply and affordability conditions in many markets have unfortunately put a temporary hold on many aspiring buyers’ dreams of owning a home this year,” noted Yun.
Spicy sales in the Midwest
In the Midwest, sales rose 3.1 percent from May but remain unchanged from this time last year. The median price rose 7.7 percent in the last year to $213,000.
In the Northeast, existing home sales actually fell 2.6 percent, but are 1.3 percent above a year ago (the median price was $296,300, up 4.1 percent for the year).
The South saw a 4.7 percent dip in sales ((unchanged from a year ago) and the median price in the South was $231,300, up 6.2 percent from a year ago.
Sales in the West declined 0.8 percent but are 2.5 percent above June 2016. The median price in the West was $378,100, up 7.4 percent from June 2016.
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