You may recall us touting the high priority we place on continued training for our agents in addition to the legally required continuing education. Part of this training encompasses keeping ourselves and our agents updated about current trends in the national housing market and how that translates to our local areas. A few weeks ago, for example, we talked about ROI and cost versus value when it comes to home improvements, and discussed that these statistics can get pretty granular when it comes to different markets, therefore making it important to seek advice from a real estate agent who is up-to-date on current home improvement trends.
This week and next week, we are going to discuss another annual report that is very near and dear to our REALTOR® hearts, and that is the Profile of Home Buyers and Sellers that is published annually by the National Association of REALTORS®.
First a little bit about the report:
- This report has been compiled annually for 40 years since it started in 1981
- This year’s survey included 131 questions, was conducted in Spanish and English options, and spanned both digital and paper mediums
- Data is taken from a sample of consumers nationally who bought/sold a primary residence between July 2019 and June 2020.
So why does your REALTOR® having this report matter to you? And why is this information helpful to you?
Sellers, you need to know what you are competing against when it comes to other homes on the market. Also, you need to be an educated consumer when it comes to the process of selling a home and your expectations of your agent and other involved professionals. Be realistic.
When your agent is armed with this information, he/she can better advise you about what to expect when you put their house on the market: pricing, who the likely buyer is, what the buyer will be looking for, what imperfections they will be able to overlook versus which items are likely to be non-negotiable. In short, this up-to-date information can help the REALTOR® help you prepare your house for the market in a way that minimizes as many buyer’s objections as possible, minimizes your days on market, and maximizes the selling price.
2020 was certainly a unique year, and this year’s profile reflects some of the idiosyncrasies of the real estate market:
- The unique differences in sellers who closed in their home sale transaction before and after April 2020: while these sellers may have listed their home prior to the onset of COVID-19 in March, they closed on their transaction during a timeframe when many state and local areas had restrictions in place. Sellers who sold after April 2020 were more likely want to sell at least somewhat urgently, were more likely to sell in the suburbs, and need a larger home
- Increased prices are also impacting sellers. Tenure in the home remained at a high of 10 years this year. Historically, tenure in the home has been six to seven years. Sellers may now have the equity and buyer demand to sell their home after stalling or delaying their home sale
- Sellers, as well, turned to professionals to help market their home to potential buyers, price their home competitively, and sell within a specific timeframe. The use of an agent to sell the home reached historical highs of 89 percent.
- Only eight percent of sellers sold via For-Sale-By-Owner (FSBO).
In the section that follows, we highlight some of the more specific results of the survey:
Home Sellers Before and During COVID-19: clearly the pandemic had an effect…
• The top reason for sellers before April to sell their home was because they wanted to be closer to friends and family. Home sellers who sold their home after March were more likely to report the main reason for selling was because their home was too small.
• Home sellers who sold after March were more likely to say they were somewhat urgent in their need to sell their home—46 percent compared to 39 percent of those who sold before April.
• Sellers who sold after March were more likely to use technology as a marketing tool. The biggest difference seen is among those using virtual tours. Twenty-seven percent used virtual tours after March compared to 16 percent of those pre-April.
• The median time both sellers who sold before and after March owned their homes was 11 years. However, 39 percent of sellers who sold after March had owned their home for 16 years or more compared to 34 percent of sellers who sold before April.
• Home sellers who sold after March sold their home for $300,000 while those who sold before April sold it for $270,700.
Characteristics of Homes Purchased
• 85 percent of buyers purchased a previously owned home versus new construction
• Most recent buyers who purchased new construction were looking to avoid renovations and problems with plumbing or electricity. Buyers who purchased previously-owned homes were most often considering better overall value.
• Detached single-family homes continued to be the most common home type for recent buyers at 81 percent, followed by townhomes or row houses at 7 percent.
• The median distance between the home that recent buyers purchased and the home they moved from was only 15 miles. This means you are most likely to find a buyer who is local to your general area. You don’t have to try appeal to someone who is from far afield.
• Buyers typically purchased their homes for 99 percent of the asking price.
•The typical home that was recently purchased was 1,900 square feet, had three bedrooms and two bathrooms, and was built in 1993.
• Heating and cooling costs were the most important environmental features for recent home buyers, with 83 percent finding these features at least somewhat important.
• Overall, buyers expected to live in their homes for a median of 15 years, while 21 percent said that they were never moving.
Home Sellers and Their Selling Experience
• The typical home seller was 56 years old, with a median household income of $107,100.
• For all sellers, the most commonly cited reason for selling their home was the desire to move closer to friends and family (15 percent), that it was too small (14 percent), and a change in family situation (12 percent). Sellers typically lived in their home for 10 years before selling, similar to last year.
• Eighty-nine percent of home sellers worked with a real estate agent to sell their home.
• For recently sold homes, the final sales price was a median of 99 percent of the final listing price.
• Recently sold homes were on the market for a median of three weeks, the same as last year.
• Forty-six percent of all sellers offered incentives to attract buyers (closing costs, warranties, etc).
• This year, home sellers cited that they sold their homes for a median of $66,000 more than they purchased it.
• Sixty-nine percent of sellers were very satisfied with the selling process.
Home Selling and Real Estate Professionals
Since the survey also asks questions about what consumers’ expectations are regarding agents’ services, this can also help real estate agents know better how to curate their continuing education options to be better equipped to help their clients and customers.
• Sixty-seven percent of sellers found their agent through a referral from a friend, neighbor, or relative or used an agent they had worked with before to buy or sell a home.
• Seventy-seven percent of recent sellers contacted only one agent before finding the right agent they worked with to sell their home.
• Ninety-one percent of sellers listed their homes on the Multiple Listing Service (MLS), which is the number one source for sellers to list their home.
• The typical seller has recommended their agent once since selling their home. Twenty-seven percent of sellers recommended their agent four or more times since selling their home.
• Eighty-nine percent said that they would recommend their agent for future services.
For-Sale-by-Owner (FSBO) Sellers
• Only eight percent of recent home sales were FSBO sales this year. This remains close to the lowest share recorded since this report started in 1981.
• The median age for FSBO sellers is 57 years. Sixty-four percent of FSBO sales were by married couples that have a median household income of $96,700.
• FSBOs typically sell for less than the selling price of other homes; FSBO homes sold at a median of $217,900 last year (up from last year), and significantly lower than the median of agent-assisted homes at $242,300. Even if you subtract a 7% commission from the agent assisted homes, sellers who used an agent still typically net more at closing than people who try to sell it on their own.
The Home Search Process: as a seller you need to know how buyers are searching for homes so you can hire an agent who can appeal to those buyers.
If you are a buyer, having an agent who is in touch with current trends in the local market will help them steer you in the right direction when assessing listings and preparing an offer. As a buyer, it is also important to understand the seller’s perspective to understand, perhaps, why a house is priced the way it is. So, also check in next week when we discuss seller’s profiles.
• For 43 percent of recent buyers, the first step that they took in the home buying process was to look online at properties for sale, while 18 percent of buyers first contacted a real estate agent.
• Buyers typically searched for eight weeks and looked at a median of nine homes, and viewed five of these homes only online.
• The share of home buyers who used the internet to search for a home increased to an all-time high of 97 percent.
• When asked where their internet searches were conducted, home buyers were split; they typically conducted 50 percent of their search on a desktop/ laptop and 50 percent on a mobile device(s).
• Sixty-four percent of recent buyers were very satisfied with their recent home buying process.
Sellers, it is important to know what other sellers in the market are offering AND to know what the buyers are looking for. Sellers will want to read next week’s buyer-centric profile blog because it will help you get to know who you are trying to appeal to.
For more information you can look at the actual report here:
At F.C. Tucker Emge REALTORS® we have numerous technological tools to make selling your home a breeze and we will help you capitalize on the local market to insure the highest net proceeds for your pocket. If you have any questions about this blog or its contents, please reach out to your favorite F.C. Tucker Emge REALTOR®. They love hearing from you and they love your questions.
