According to the 2011 Profile of Home Buyers and Sellers from the National Association of REALTORS®, seventy-eight percent of recent home buyers said their home is a good investment, and 45 percent believe it’s better than stocks.
To find their home, 88 percent of home buyers used the Internet, 87 percent used real estate agents, 55 percent yard signs, 45 percent attend open houses and 30 percent review print or newspaper ads. When purchasing a home, 89 percent of respondents used real estate agents and brokers, other methods include directly from a builder, 7 percent; and directly from the previous owner, 4 percent. Sixty percent of buyers working with real estate professionals were represented by a buyer’s agent.
Ninety-one percent of home buyers who used the Internet to search for a home purchased through a real estate agent, as did 70 percent of non-Internet users, who were more likely to purchase directly from a builder or from an owner they already knew in a private transaction.
Home buyers thought the most important services agents provide are helping find the right house, and negotiating price and sales terms. Buyers most commonly choose an agent based on a referral from a friend, neighbor or relative, with trustworthiness and reputation being the most important factors; 89 percent are likely to use the same agent again or recommend to others
When buyers were asked where they first learned about the home they purchased, 40 percent said the Internet; 35 percent from a real estate agent; 11 percent a yard sign or open house; 6 percent from a friend, neighbor or relative; 5 percent home builders; 2 percent a print or newspaper ad; 2 percent directly from the seller; and less than 1 percent from a home book or magazine.
The study shows the median age of first-time buyers was 31 and the median income was $62,400, up from $59,900 in the 2010 study. The typical repeat buyer was 53 years old and earned $96,600, notably higher than the $87,000 median reported in 2010.
This year, buyers needed more help. Inventories were higher across much of the nation, requiring more time to sort. For example, in 2001, buyers spent 7 weeks searching for homes, while in 2011, they spent 12 weeks.
More than half of buyers considered purchasing a foreclosure but did not buy one for a variety of reasons: 29 percent could not find the right house; 15 percent each reported poor condition and a difficult process.
For home financing, ninety-four percent of entry-level buyers chose a fixed-rate mortgage. Fifty-four percent of first-time buyers financed with a low-down payment FHA mortgage, and 6 percent used the VA loan program which requires no down payment.
Seventy-seven percent of respondents purchased a detached single-family home, nine percent a condo, eight percent a townhouse or rowhouse, and six percent some other kind of housing. The typical home had three bedrooms and two bathrooms.
For location, fifty-one percent of all homes purchased were in a suburb or subdivision, 18 percent were in an urban area, 18 percent in a small town, 11 percent in a rural area and 3 percent in a resort or recreation area. The median distance from the previous residence was 12 miles, the same as in the 2010 study.
So, what are the biggest factors influencing neighborhood choice? Quality of the neighborhood, cited by 67 percent of buyers; convenience to jobs, 49 percent; overall affordability of homes, 45 percent; and convenience to family and friends, 39 percent. Other factors with relatively high responses include neighborhood design, 32 percent; convenience to shopping, 28 percent; quality of the school district, 27 percent; convenience to schools, 22 percent; and convenience to entertainment or leisure activities, 21 percent. Commuting costs continue to factor strongly in decisions regarding location, with 73 percent of buyers saying transportation costs were important.
Of sellers working with real estate agents, the study found that 80 percent used full-service brokerage, in which agents provide a range of services that include managing most of the process of selling a home from listing to closing. Ten percent of sellers chose limited services, which may include discount brokerage, and 10 percent used minimal service, such as simply listing a property on a multiple listing service. Realtors provide all of these types of services, as do non-member agents and brokers, with comparable findings for each year since questions about brokerage services were added in 2006.
And finally, the biggest reason people buy a home is the simple desire to own a home of their own, cited by 27 percent of respondents, including 60 percent of first-time buyers. The next biggest primary reasons for buying were desire for a larger home or a job-related move, each cited by 10 percent of respondents; a change in family situation or the affordability of homes, 8 percent each; and desire to be closer to family, friends or relatives, 7 percent
For more information about the Atlanta area real estate market, please email me at ed@edshort.com or call me at 404.918.2500.
~ Ed Short, Atlanta REALTOR®
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