The National Association of Realtors (NAR) conducted an annual survey to create a profile of home buyers and sellers. It helps define the trends of the past year and look forward to those of the next. I want to share some of their key findings:
Homes typically sold at a record pace of one week and received full asking price from July 2020-June 2021.
Kristin’s take: That has been the theme in Contra Costa County all year. Right now, condos/townhomes (those with HOAs) are not as robust and might provide an opportunity not to compete. Or, if it has been sitting for more than 20 days, you might get it at a lower price. I believe that will change at the beginning of the year, as it did this year.
Tenure in the home dropped from 10 years to 8 years, the largest year-over-year decline in the history of the data set (40 years).
Kristin’s take: It used to be seven years was the average time in a home. That changed with the meltdown and now it’s dropped again, primarily from the pandemic. The ability to work from home allowed people to move, whether it is out of state or to a bigger space.
Among repeat home buyers and home sellers over the last year, a key factor for moving was the desire to live closer to family and friends, while an equally important motivator was the need for more space or a bigger home.
Twenty-eight percent of first-time buyers reported that they used a gift or a loan from friends or family in order to make a down payment on a home and 29% said saving for a down payment proved to be the most difficult step in the entire buying process. For repeat buyers, 56% cited using equity generated from the sale of a primary residence toward their down payment. For first-time buyers, the typical down payment was 7%, while it was 17% among repeat buyers.
Kristin’s take: This is how first-time homebuyers are getting into homes. I have seen family members gift $300k for the down payment and pay for closing costs.
Forty-seven percent of buyers said the agent they used was referred by a friend, neighbor, or relative, and 13% used an agent that they had already worked with on a past transaction. Seventy-three percent of buyers reported that they needed to interview only one real estate agent during their home search, and a whopping 90% said they would use their agent in the future or recommend the agent to others.
Kristin’s take: It all comes down to trust and how good of a job the agent does communicating, managing expectations, and explanation of the market. It can take some time to get an offer accepted and it is a process buyers have to experience and learn from. For selling a home, the key is to price it correctly, as buyers are paying over list, but if it is listed where you think it might sell, buyers are expecting to offer more, and then it may sit.