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Real Estate Big Data

What happens in a sellers market when people stop selling?

(REAL ESTATE BIG DATA) People are staying in their homes longer so median tenure is up, but there are plenty of areas of the country with lots of moving, so know your area.

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When it comes to buying or selling a home, much of the focus naturally falls on people in the process of moving. Where they want to relocate to, how long it takes them to find a home…etc. But there’s another part of the equation: what happens once someone buys a home? More importantly, how long do they stay put?

In 2018, the National Association of Realtors® (NAR) actually did a study on this and found that the median amount of time individuals own their homes is 13 years. That’s actually a jump since the last decade, when people were more likely to stay for only about 10 years.

Of course, median scores don’t paint an accurate picture of what’s happening in specific locations. For instance, homeowners in the north eastern section of the United States (think states like New York, Massachusetts and Pennsylvania) are more likely to keep their homes for longer periods of time. On the other hand, homeowners in the west – think Utah, Arizona and Colorado, not the Pacific Northwest – are more likely to sell their homes within 8 years.

One good indicator of whether or not someone will keep their homes for longer is average home prices. In general, NAR found that people who lived in areas where housing was expensive, like California, were less likely to sell quickly. High prices also make selling homes difficult: people often don’t want to put their home up for sale when they don’t have anything lined up. This can create a housing shortage, which can drive prices higher, furthering the cycle.

That said, other areas are seeing massive growth: locations like Austin, Texas or Boise, Idaho, tend to have homeowners selling more often.

The good news about places with “low median tenure” (people moving more often) is that there’s more likely to be growth in the housing market. After all, if someone moves out of their starter home into something bigger, it leaves that starter home open for newcomers looking to settle down in the area.

Essentially, while home tenure has risen on a national scale, the diverse landscape of the United States means experience will vary depending on your specific location.

Brittany is a Staff Writer for The American Genius with a Master's in Media Studies under her belt. When she's not writing or analyzing the educational potential of video games, she's probably baking.

Real Estate Big Data

Federal Reserve Chair says it’s not a recession, it’s an investment in our future

(NEWS) James Bullard of the Federal Reserve believes optimism is the key to getting through this hard time with so many things in flux. Is he right?

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2020, it seems, is the year of rebranding—even when it comes to our impromptu recession brought on by a variety of factors (but largely thanks to COVID-19). Despite the negative connotations of widespread economic disaster, some people, such as St. Louis Federal Reserve President James Bullard, are regarding this instance as “an investment in U.S. public health.”

Should we all be so optimistic? Bullard seems to think so.

To be fair, James Bullard’s “optimism” also accounts for taking a “$2.5 trillion hit” to the economy, so it’s not all sunshine and dancing unicorns (this time). However, the long-term outcome of handling this crisis correctly—a process which involves bailing out small businesses, matching wages, and contributing to rebuilding and supporting our healthcare infrastructure—will be, according to Bullard, positive.

Bullard’s optimism does come with an important message: As with pretty much anything, the simpler we can keep solutions to this problem, the better the outcome will be. We’re not off to a great start; between states’ varying responses to COVID-19 procedures and mixed congressional support for a stimulus package, the process of dealing with economic fallout has become more complicated than some—Bullard included—would consider “ideal”.

Unfortunately, there isn’t really an “ideal” outcome here that is also practical without requiring a heretofore unseen level of cooperation and cohesion between political parties and state-based cultures. In the event that we can actually pull together and actively invest, as Bullard suggests, in our infrastructure, the implications for our economy will ultimately be positive—even if only in a pyrrhic victory kind of way.

In unprecedented times of crisis—you know, like right now—a little bit of optimism doesn’t hurt. Over the course of the next few months, you’ll hear all sorts of different takes on the situation; some people—those who identify as “realists” but really just enjoy bumming people out—will actively speak out against positive attitudes, while others will avoid “getting their hopes up” because they don’t want to be disappointed.

But, if Bullard’s optimism is to be believed—and we’re choosing to think it is—you have full permission to let yourself hope, at least for now.

Remember, there are a couple of things you can do to bolster your immune system without medicine during this time. One of them involves keeping a positive outlook, and the other one is eating plenty of garlic; we’ve found that one accompanies the other.

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Real Estate Big Data

This week, home buyer disinterest tripled from last week

(REAL ESTATE) Home buyer interest took a dip this week, as did how current sellers will allow their homes to be viewed. The air of uncertainty remains.

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One in two Realtors surveyed early this week said home buyer interest has dipped in light of the COVID-19 outbreak, tripling from last week when only 16% said the same. What a difference a week makes.

According to the National Association of Realtors survey, 69% of Realtors said there’s no change in the number of homes on the market during the pandemic, down from 87% the week prior.

“The decline in confidence related to the direction of the economy coupled with the unprecedented measures taken to combat the spread of COVID-19, including major social distancing efforts nationwide, are naturally bringing an abundance of caution among buyers and sellers,” said NAR Chief Economist, Dr. Lawrence Yun.

“With fewer listings in what’s already a housing shortage environment, home prices are likely to hold steady. The temporary softening of the real estate market will likely be followed by a strong rebound once the economic ‘quarantine’ is lifted, and it’s critical that supply is sufficient to meet pent-up demand.”

The survey also asked members about the stock market, mortgage interest rates, and consumer behaviors. Fully 45% said the stock market correction and lower mortgage rates balance out, not impacting buyer behavior.

Only 40% said home sellers haven’t changed how their home is viewed while on the market, compared to nearly 80% just one week ago.

The majority of sellers have decided not to make a change in their listing status, but this week saw an increase in home sellers pulling their listing from the market and opting to refinance instead.

Additionally, ShowingTime has reported a major drop in real estate showings compared to this time last year:

Every professional on the planet right now is wondering what’s next, and the answer depends exclusively on how quickly we can get a handle on COVID-19. Realtors and brokers should keep a finger on the pulse of the shifting economic data – it’s the only way to keep your eyes on the road in this fog of uncertainty.

One of the best examples we’ve seen of a practitioner offering detailed information to consumers during this crisis comes from Cynthia Fedor in Austin, Texas – review her recent email to shape your own future efforts.

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Real Estate Big Data

Surprise nuggets in the 2020 home buyer, seller generational trends report

(REAL ESTATE) You may think you know generational behaviors, but there are interesting trends emerging as millennials begin to behave more like the Silent Generation.

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Everything you assumed about annoying millennials like me is apparently wrong. Sure, I had avocado sprouted grain toast and local fair-trade coffee for breakfast, but don’t let that ridiculous exterior fool you… it turns out that millennials are increasingly behaving more like the Silent Generation than any other.

According to the National Association of Realtors’ (NAR’s) 2020 Home Buyer and Seller Generational Trends Report, there are some shifts in consumer behavior that are worth noting, to better serve the market.

Dr. Jessica Lautz, VP of Demographics and Behavioral Insights emphasizes that “it is really important not to pigeon hole a buyer just based on their age,” and that it is important to remain informed of the trends.

For example, the aforementioned millennial generation behaving like the Silent Generation. Dr. Lautz notes, “when buying a home, they want to be close to friends and family,” a behavior typically emphasized by retirees, and that “they’re buying at affordable price points, and using referrals to find agents at high rates.”

Additionally, it’s not just Boomers that stay put – millennials want to own homes, and they intend on planting deep roots, Boomer style. The study also indicates that millennials are relying more on savings to purchase their homes than past generations.

Another surprise gem in the data amassed by NAR? Dr. Lautz observes that while most people think millennials want to bebop around inner cities, “lots of younger millennials are moving to small towns and suburbs where they can find affordability.” #MythBusted

In 2020, the real estate referral method looks a lot like 1920 in that there is a high level of trust in personal referrals. That’s worth noting if you’re spinning your wheels to attract new clients when business is likely to come from your existing clientbase.

It’s not all avocados and sunshine, though.

Dr. Lautz said, “there is a sad data point in that Gen Xers are still struggling to come out of the recession when it comes to home buying trends. They’re back on their feet financially, but many were underwater, which stalled the selling of their property, and they’re now recovering, but they have a longer period of time they have to wait before their finances are in order to do that.”

In other words, the recession has had a lingering impact on this middle child of a generation.

The 2020 generational trends report is something every industry practitioner should spend time getting to know (at least, practitioners that prefer to make money).

Below are the highlights – read them first, then dig into the full report here.

Characteristics of Home Buyers

  • 21% of homebuyers between the ages of 22 to 29 are unmarried.
  • 22% of homebuyers between the ages of 65 to 73 are single females.
  • 31% of homebuyers between the ages of 40-64 purchased a multigenerational home (will home adult siblings, adult children, parents, or grandparents).
  • 33% of homebuyers between the ages of 22 to 29 stated that they lived with parents/relatives/friends who paid and did not pay rent before their living arrangement.

Characteristics of Homes Purchases

  • The oldest and the youngest age groups (74 to 94, and 22 to 29) were most likely to purchase a new home for the amenities of new construction communities (though a small share of buyers aged 22 to 29 purchased new homes).
  • 25% of homes purchased by homebuyers within the ages of 22 to 29 were located in a small town.
  • 43% of homes purchased by homebuyers between the ages of 55 to 64 were located in a small-town or rural environment.
  • 64% of homebuyers between the ages of 22 to 29 stated the overall affordability of the home as a factor was influencing neighborhood choice.
  • 53% of homebuyers between the ages of 22 to 29 and 74 to 94 stated convenience to friends/family as a factor was influencing neighborhood choice.
  • 46% of homebuyers between the ages of 30 to 39 noted the quality of the school district as a factor influencing neighborhood choice.
  • 38% of homebuyers between the ages of 30 to 39 stated convenience to schools as a factor influencing neighborhood choice.
  • 29% of homebuyers between the ages of 65 to73 reported convenience to a health facility as a factor influencing neighborhood choice.
  • 36% of homebuyers between the ages of 74 to 94 stated convenience to a health facility as a factor was influencing neighborhood choice.
  • The median expected length of tenure in homes purchased between the ages of 40 to 73 is 20 years.

The Home Search Process

  • 63 % of homebuyers between the ages of 22 to 29 stated finding the right property as the most challenging step of the home buying process.
  • 60 % of homebuyers between the ages of 30 to 39 reported finding the right property as the most challenging step of the home buying process.

Home Buying and Real Estate Professionals

  • 92% of homebuyers between 22 to 29 and 30 to 39 bought a home through a real estate agent or broker.
  • 85% of homebuyers between 22 to 29 used a real estate agent to help understand the buying process.
  • 51% of homebuyers between 22 to 29 found a real estate agent through a referral from friends or family.
  • 45% of homebuyers between the ages of 30 to 39 found a real estate agent through a referral from friends or family.

Financing the Home Purchase

  • 27% of the homebuyers between 22 to 29 stated gift from a relative or a friend as the source of their down payment.
  • 6% of homebuyers between 22 to 29 stated loan from a relative or a friend as the source of their down payment.
  • 46% of homebuyers between 65 to 73 stated savings as the source of their down payment.
  • 56 % of homebuyers between 65 to 73 stated proceeds from the sale of the primary residence as the source of their down payment.
  • 39% of homebuyers between the ages of 74 to 94 stated savings as the source of their down payment.
  • 52% of homebuyers between 74 to 94 stated proceeds from the sale of the primary residence as the source of their down payment.
  • 30% of homebuyers between 22 to 29 stated saving for a downpayment was the most difficult task in the buying process.
  • Home purchases delayed at a median of 5 years between the ages of 40 to 54, due to difficulty saving.
  • 7% percent of homebuyers between 40 to 54 reported having their buyer application rejected by a mortgage lender.
  • 15% of the homebuyers between 50-54 stated they’d sold the distressed property.
  • 82% of homebuyers between the ages of 22 to 29 reported they view their home as a good financial investment.
  • 84% of homebuyers between the ages of 30 to 39 stated they view their home as a good financial investment.

Home Sellers and Their Experience

  • 28% of home sellers between 30 to 39 stated their home was too small as the primary reason for selling their previous home.
  • 21% of home sellers between 40 to 54 indicated their home was too small as the primary reason for selling their previous home.
  • 19% of home sellers between 55 to 64 stated the primary reason for selling their previous home was to move closer to friends and family.
  • 28% of home sellers between 65 to 73 stated the primary reason for selling their previous home was to move closer to friends and family.
  • 33% of home sellers between 74 to 94 stated the primary reason for selling their previous home was to move closer to friends and family.
  • 17% of home sellers between 74 to 94 stated home was too large as the primary reason for selling their previous home.
  • 11% of home sellers between the ages of 40 to 54 who lived in the home or rented their home to others while living elsewhere, stated they wanted to sell earlier but waited or stalled because the home was worth less than the mortgage.
  • The median tenure of home sellers between the ages of 55 to 64 in the previous home is 12 years.
  • The median tenure of home sellers between the ages of 65 to 73 in the previous home is 12 years.
  • The median tenure of home sellers between the ages of 74 to 94 in the previous home is 12 years.

Home Selling and Real Estate Professionals Methodology

  • 21% of homebuyers between the ages of 30 to 39 stated helping the seller find ways to fix up home to sell it for more as the most wanted service from real estate agents.
  • 20% of homebuyers between the ages of 40 to 54 stated helping the seller find ways to fix up home to sell it for more as the most wanted service from real estate agents.
  • 23% of homebuyers between the ages of 55 to 64 stated helping the seller market home to potential buyers is the most wanted service from real estate agents.

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