So, Who's Buying Real Estate Now?

I talk to a lot of people about selling their real estate. Of course, most if not all these sellers feel like nobody is buying any real estate right now, so why even bother to put the property on the market.

Well, the fact is that there are a lot of buyers in the market right now. To prove that point and define who these people are, the National Association of Realtors (NAR) publishes an annual "Profile of Home Buyers and Sellers". The 2010 version of this research report has just come out and I thought you might like to know who is buying, what they are buying, how they decide what to buy, how they finance their new property, and why trying to sell without a real estate agent is a much more difficult and unsuccessful task than it was five years ago.

The answer to all these questions are in the new NAR report. To get the answers, all you have to do is wade through the entire 124 page research report. I started to read it. I like reading marketing data. But the NAR report is a lot like reading the white pages of the phone book. A real snoozer.

So, to save you all that time and eye-strain, I'll just pass along the info from the executive summary that NAR is smart enough to include on the first few pages of the full report. Now, remember this, the data in this report is for the country as a whole. Statistics for the area where you live may be quite different from what NAR is showing in this report.

Home Buyers

• Fifty percent of home buyers were first-time buyers.
• The typical first time home buyer was 30 years of age. The typical repeat buyer was 49 years old.
• The median household income was $72,200. The median income for first time buyers was $59,900, and the median income for repeat buyers was $87,000.
• 20 percent of buyers were single females; twelve percent were males.

The Homes

• New home purchases were down to 15 percent of all home purchased -- the lowest level in years.
• The typical home purchased was 1,780 square feet, built in 1990, and had three bedrooms and two baths.
• Seventy-eight percent of home buyers purchased a single family detached home.
• Only eleven percent of buyers over 50 purchased senior-related housing or in an active adult community.

Searching For A Home

• For more than one-third of home buyers, the first step was in the process was to look on-line for properties.
• 90 percent of home buyers used the internet to search for a property.
• Real estate agents were used by 81 percent of buyers.
• The typical home buyer searched for 12 weeks and inspected 12 properties.

Home Buying

• Eighty-three percent of buyers used a real estate agent to arrange the purchase.
• Only four percent of buyers purchased a home in foreclosure.
• Only six percent of buyers purchased a short sale.
• Seventy-one percent of all home buyers and ninety-three percent of first-time home buyers used the home buyer tax credit during their purchase.

Home Sellers

• The typical seller lived in the house for eight years before selling
• Eighty-eight percent of sellers used a real estate agent when selling.
• Recent sellers typically sold for ninety-six percent of the listing price, and fifty-seven percent reported that they reduced the asking price at least once.
• The typical home was on the market for eight weeks.
• To get the house sold, forty-four percent of sellers offered incentives to attract buyers -- the most often mentioned incentives were home warranties, policies and help with closing costs.

For Sale By Owner Results

• Only nine percent of sellers were able to sell their home without the assistance of a real estate agent. Half the FSBO sales were made to a buyer with whom the seller was already acquainted.
• The primary reason FSBO sellers sold without using a real estate agent was to try to avoid paying the real estate commission.
• Twenty-eight percent of FSBO sellers used no marketing techniques to try to sell their house. Fifty-six percent of FSBO sellers offered no incentives to attract buyers.
• Twenty-three percent of FSBO sellers reported getting the price right was their most difficult task.

So, is this data important or merely informative?

Frankly, that depends on whether you are actively selling, actively buying, or none of the above.

If you are actively buying or selling, I'd say this kind of information is important to being a successful buyer or seller. If you are neither a buyer nor a seller, then at best this info is only informative. Still in all, it will make for good conversation around the water cooler.

Happy Selling!

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