WHO IS TODAY S HOMEBUYER C.A.R. EXPO Oscar Wei, Senior Economist

Transcription

1 WHO IS TODAY S HOMEBUYER 2015 C.A.R. EXPO Oscar Wei, Senior Economist

2 SALES OF EXISTING DETACHED HOMES California, Aug 2015 Sales: 431,800 Units, +7.4% YTD, +9.3% YTY 700, , ,000 Aug-14: 395,080 Aug-15: 431, , , , ,000 Jan 05 Jul 05 Jan 06 Jul 06 Jan 07 Jul 07 Jan 08 Jul 08 Jan 09 Jul 09 Jan 10 Jul 10 Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Jul 13 Jan 14 Jul 14 Jan 15 Jul 15 SERIES: Sales of Existing Single Family Homes *Sales are seasonally adjusted and annualized

3 THE PROFILE OF HOMEBUYER

4 TYPICAL CA HOME BUYER 42 Years Old 44% Minority 66% Married SERIES: 2015 Housing Market Survey

5 GENERATIONS 32% Millennials % Gen X % Baby Boomers % Silent Gen 70 and older SERIES: 2015 Housing Market Survey

6 DEMOGRAPHICS: ETHNICITY 10% 4% White 14% 17% 56% Asian Hispanic Other Black SERIES: 2015 Housing Market Survey

7 GEN X IS THE SMALLER POPULATION GROUP, WHEN COMPARED TO MILLENNIALS AND BABY BOOMERS SOURCE: U.S. Census Bureau, Joint Center for Housing Studies of Harvard University

8 HOUSING DEMAND WILL INCREASE, LARGELY DRIVEN BY MINORITIES 14 Net new households, millions Projected household growth, Projected household growth, % 100% 8 77% 88% % 39% 12% % % 18% White Hispanic Black, Non Hispanic 18% 24% Other, Non Hispanic Total Minority Total SOURCE: Urban Institute

9 SHARE OF MINORITY HOME BUYERS HAS GROWN OVER TIME 80% 70% 68.5% % 50% 40% 55.8% 56.3% 30% 20% 10% 0% 5.0% 4.2% 3.6% 14.1% 19.9% Q. What was the race/ethnicity of the head of household buying the property 14.0% 7.5% 12.5% White/Non Hispanic African American Hispanic Asian SERIES: 2015 Housing Market Survey 16.5%

10 IDEAL NEIGHBORHOOD IS SUBURBAN & PEDESTRIAN ORIENTED FOR MAJORITY OF BUYERS Suburban Pedestrian oriented (high walkability) Cul de sac Gated community Rural Historic Urban pioneer (up & coming) Urban core (downtown) Resort area Ethnic 5.6% 21% 21% 21% 19% 17% 15% 12% 11% 34% 0% 5% 10% 15% 20% 25% 30% 35% Q 21. Please select which of the following characteristics describe your ideal neighborhood. Select all that apply.

11 SAFETY IS MOST IMPORTANT IN CHOOSING A NEIGHBORHOOD Category Rating Safety 8.3 Walkability 6.5 Quality of schools 6.1 Entertainment/cultural activities nearby 5.9 Short commute to work 5.6 Great restaurants nearby 5.5 Q Please rate the importance of the following in your decision to purchase a home in the neighborhood where you purchased. (Scale 1 10, 1=not at all important, 10=extremely important)

12 BUYERS OPTIMISTIC ABOUT LONG TERM DIRECTION OF HOME PRICES Up 67% 71% Flat Down Unsure 24% 3% 7% 13% 4% 11% 1 Year 5 Years Q Do you think home prices in the neighborhood where you purchased will go up, down, or stay flat in one year, in five years?

13 FEWER BUYERS BELIEVE PRICES WILL RISE IN 5 YEARS Up in 1 Yr Up in 5 Yrs 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Q Do you think home prices in the neighborhood where you purchased will go up in one year, in five years?

14 BUYERS DIDN T PURCHASE SOONER BECAUSE No real buying urgency 22% Waited until finances improved 21% Not many good housing options 13% Waited to see when prices would stabilize 13% Needed to save for down payment 12% Needed to sell current home 8% Difficulty qualifying for mortgage 5% Q. Why didn t you buy a home sooner?

15 SHARE OF FIRST TIME BUYERS REMAINS BELOW LONG RUN AVERAGE 50% % First Time Home Buyers Long Run Average 40% Long Run Average = 38% 30% 29.5% 20% 10% 0% SERIES: 2015 Housing Market Survey

16 REASONS FOR BUYING 0% 5% 10% 15% 20% 25% Tired of Renting 23% Desired Larger Home Desired Better Location 16% 19% Investment/ Tax Considerations 14% Change in Family Status Changed Jobs Retirement/Move to Retirement Community Desired Smaller Home 5% 4% 4% 4% Foreclosure/Short Sale/Default 1% Other 11% Q. What was the single most important reason for buying the property? SERIES: 2015 Housing Market Survey

17 REASONS FOR BUYING FIRST TIME VS. REPEAT 0% 10% 20% 30% 40% 50% 60% Tired of Renting Desired Larger Home Desired Better Location Investment/ Tax Considerations Change in Family Status Changed Jobs Retirement/Move to Retirement Community Desired Smaller Home Foreclosure/Short Sale/Default Other 9% 10% 23% 9% 19% 8% 16% 7% 4% 3% 5% 1% 0% 5% 5% 1% 1% 7% 12% 55% First Time Buyers Repeat Buyers Q. What was the single most important reason for selling/buying the property? SERIES: 2015 Housing Market Survey

18 REASONS FOR BUYING MILLENNIALS VS. BABY BOOMERS 0% 10% 20% 30% 40% 50% Tired of Renting Desired Larger Home Desired Better Location Investment/ Tax Considerations Change in Family Status Changed Jobs Retirement/Move to Retirement Community Desired Smaller Home Foreclosure/Short Sale/Default Other 6% 5% 6% 3% 0% 13% 11% 10% 18% Q. What was the single most important reason for selling/buying the property? SERIES: 2015 Housing Market Survey 0% 1% 0% 7% 7% 10% 13% 16% 14% 18% 41% Millennials Baby Boomers

19 HOME OWNERSHIP RATE NEARLY 4 TIMES HIGHER AMONG BOOMERS Baby Boomers Millennials 22% 3% 39% 20% Own Rent Other Own Rent Other 75% 41% Q. What is your current living situation? SERIES: 2014 Baby Boomer Survey

20 BOOMERS HAVE LESS DEBT THAN MILLENNIALS THAT PREVENTS BUYING A HOME None 43% 53% Other 4% 11% Private loan from friend/ relative Consolidated personal loan 2% 7% 8% 7% Millennials Boomers Auto loan 17% 12% Credit cards 35% 41% Q. What type of debt do you have that would make it difficult to buy a home? SERIES: 2014 Baby Boomer Survey 0% 10% 20% 30% 40% 50% 60%

21 FINANCIAL CHARACTERISTICS: MILLENNIALS VS. BABY BOOMERS Millennials Baby Boomers Median Household Income $100,000 $130,000 Median Home Price $470,000 $505,000 Median Monthly Mortgage Payment $1,538 $1,516 Median Downpayment (in $$) $50,000 $79,500 Median Downpayment (in % to Price) 13.1% 20% SERIES: 2015 Housing Market Survey

22 THE HOME BUYING EXPERIENCE

23 TECHNOLOGY USE

24 ZILLOW & REALTOR.COM ARE MOST USEFUL WEBSITES IN BUYING PROCESS 33% 17% 13% Agent 10% 10% 0% 5% 10% 15% 20% 25% 30% 35% Q. What was the single most useful website that you visited during your home buying process?

25 REALTOR.COM & ZILLOW MOST USEFUL WEBSITES 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Zillow realtor.com Brokerage Redfin Q. What was the single most useful website that you visited during your home buying process?

26 ½ BUYERS WHO FOUND HOME ONLINE FOUND IT ON ZILLOW OR REDFIN 29% 21% 13% 9.4% Q. On which website did you find your home? 0.0% 10.0% 20.0% 30.0% 40.0%

27 ZILLOW REMAINS #1 WEBSITE WHERE BUYERS FOUND HOME 35% 30% 25% 20% 15% 10% 5% 0% realtor.com Zillow Trulia Redfin Q. On which website did you find your home?

28 SOCIAL MEDIA USED FOR BUYING INFO & TIPS /SUGGESTIONS FROM FRIENDS Home buying info 35% Buying tips, suggestions from friends Neighborhood info Agent referrals Agent's Facebook page 31% 30% 27% 26% Agents' YouTube 17% 0% 5% 10% 15% 20% 25% 30% 35% 40% Q. How did you use social media (such as Facebook, Twitter, YouTube, etc.) in your home buying process?

29 35% OF BUYERS USED SOCIAL MEDIA IN BUYING PROCESS Q. Which social media websites did you use during your home buying process?

30 MOST BUYERS ARE USING MOBILE DEVICES 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 85% Q. Did you use a mobile device in the home buying process? 91% 85%

31 85% OF BUYERS USED MOBILE DEVICE IN BUYING PROCESS 95% Research homes 28% Communicate 20% 14% Research neighborhoods Take photos of homes/amenities/neighborhoods 13% 10% Make calls Q. How did you use your mobile device in the home buying process? N = 1269

32 ZILLOW IS MOST USEFUL APP Q. What was the most useful app that you used during the home buying process? N = 1269

33 BUYERS SPENDING MORE TIME RESEARCHING Weeks considering buying before contacting an agent (Average) Weeks spent investigating homes and neighborhoods before contacting an agent (Average) Weeks spent looking for a home with an agent (Average)

34 16 14 DECREASE IN HOMES VIEWED REFLECTS TIGHT INVENTORY Q. How many different homes did you preview and visit with your agent prior to making a purchase?

35 REALTORS: BUYERS NEED MOST HELP WITH FINDING THE RIGHT HOME Finding the right home 38% Negotiating terms of sale 20% Price Negotiation 18% Preparing transaction documents 12% Determining affordability 3% Other 12% 0% 10% 20% 30% 40% Q: In what part of the transaction buyer/seller needed the most assistance? SERIES: 2015 Annual Housing Market Survey

36 BUYERS: WE NEED MOST AGENT ASSISTANCE IN NEGOTIATING Negotiate terms of sale 25% Finding the right home 22% Price negotiation 18% Preparing transaction documents 15% Determine affordability 12% Determine comps 11% 0% 10% 20% 30% Q. In which part(s) of the transaction did you need the most assistance from your agent?

37 BUYER/AGENT RELATIONSHIP

38 MORE BUYERS USED AN AGENT 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Q. Did you use a real estate agent in your home buying process?

39 MOST BUYERS FIND AGENTS THROUGH RELATIONSHIP/CONTACTS Relationships/Contacts Advertising Internet Other 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Q. How did you find your real estate agent?

40 45% 40% 35% 30% 42% MAJORITY OF BUYERS INTERVIEWED > 1 AGENT # of Agents Interviewed 25% 20% 15% 10% 5% 17% 12% 9% 4% 3% 3% 4% 3% 3% 0% Q. How many agents did you interview prior to selecting the agent you used in your recent home purchase?

41 BUYERS CONTINUE INTERVIEWING MULTIPLE AGENTS Average Q. How many agents did you interview prior to selecting the agent you used in your recent home purchase?

42 BEING RESPONSIVE IS IMPORTANT TO BUYERS IN SELECTING AN AGENT Seemed most reponsive 20% Previously used agent 10% Trustworthy 8% Negotiating ability 8% Knowledgeable/experienced 7% Q. What was the single most important reason for selecting the agent that you used in your recent home purchase?.

43 AGENT RESPONSE TIME MEETS BUYER EXPECTATIONS 60% Expected Actual 50% 40% 30% 29% 26% 42% 37% 20% 10% 11% 12% 9.0% 7% 16% 10% 0% Instantly Within 1 hr. Within 2 hrs. Within 4 hrs. Within 1 business day Q. On average, what was the actual response time of your agent to return any form of communication to you? Q. What was the typical response time you expected from your agent to return any form of communication to you?

44 AGENT SATISFACTION RATINGS IMPROVE AVERAGE RATINGS ON 1 5 SCALE Your real estate agent s negotiating skills Overall process of finding a home Overall satisfaction with your real estate agent Q. Please rate your degree of satisfaction with the following aspects of your home buying experience on a scale of 1 5, where 1 is least satisfied and 5 is most satisfied.

45 TOP 5 REASONS FOR SATISFACTION WITH AGENT 1 Responded Fast, 26% 2 Listened to Needs, 24% 3 Find Best Home, 22% 4 Worked Hard, 22% Q. Why do you have that level of satisfaction with your agent? 5 Did Good Job Facilitating Transaction, 18%

46 REASONS FOR DISSATISFACTION WITH AGENT 1 Communication Problems, 5.2% 2 Negotiating Problems, 3.3% 3 Agent needed to do better job of monitoring transaction, 1% Q. Why do you have that level of satisfaction with your agent?

47 ADVICE TO AGENTS FROM BUYERS Communicate better (17%) Communicate according to client preference (12%) Negotiate better (9.3%) Understand market better (9%) Respond faster (7.6%) Q. What advice would you give to real estate agents to improve the process or the level of service?

48 MOST BUYERS WOULD WORK WITH AGENT AGAIN Unsure No Yes 4% 11% 85% Q. Would you work with the same agent again?

49 CONCLUDING REMARKS

50 KEY TAKEAWAYS Gen Xs still make up the majority of home buyers, but Millennials are catching up Minorities play an important role in housing demand, and will continue to do so Technology has empowered buyers in the home buying and researching process Buyers are more satisfied with agents Room for improvement: communication

51 STAY CONNECTED WITH RESEARCH CARResearchGroup CARResearchInfo On.car.org/CARResearch Housingmatters.car.org

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