Here is an infographic of some real estate buyer and seller profiles of 2016 that I thought many people would find interesting.
Nothing really shocking to me about buyers. It is interesting to see how the average age has changed since 1981. I bought my first house in 1976 at the age of 22-23. That house cost $18,000 and it didn't hit me at the time but instead of a 30 year mortgage we were given a 10 year mortgage! We were happy with our 10.5% interest rate. I still drive past that house whenever I'm in the area.
I normally work with married couples but I do get the singles. In fact, I worked with a couple this past year (they never did buy, but that might be good) that had just started dating and I could tell the woman really wanted a house badly. That's because they were living with his parents in a small duplex. This is a story unto itself as I was given a pre-qualification from her lender, but it turned out she couldn't buy anything and he couldn't either because he wasn't on his new job long enough. I even spoke to the loan officer who assured me they were qualified but when it came time to get a mortgage I was finally told it wouldn't work. The thing is, I have a feeling they broke up as we tried calling them and their phone numbers no longer worked.
I have sold properties to single women - more women than single men, so it's interesting to see the actual percentages. As the story above shows, I am always kind of hesitant to sell to unmarried couples but it's not my position to tell them what to do.
New vs. Resale
This percentage seems correct. We don't always work with buyers interested in new construction. Most builders will work with real estate agents, but if our buyer registers at a model home without their agent then that agent is out of the picture.
Many buyers don't think an agent is needed for new construction but we are there for the best interests of our buyer clients - the builder is there for themselves. So keep that in mind if you're considering purchasing new construction in the future.
Single Family or Attached Properties
I sell many more single family homes than condominiums, duplexes or townhomes, although I sell all of those types of properties. With that said, 83% is a larger number for single family compared to attached.
Buying Through a Real Estate Agent
I thought this figure was lower than expected. What does this mean? This number is considering buyers that purchased new construction without an agent, the few buyers that purchased For Sale By Owner (FSBO) properties (which are less and less common today) and those that had friend or family real estate transactions.
Average Seller's Age
54 years old as the typical age of a home seller seems high to me but younger buyers are staying in their homes longer and I would think at this age most of these sellers are moving up, although they could be downsizing. Not quite retirement age!
How Long They Lived in Their Homes
I remember the average time people lived in their homes used to be 7 years. Real estate agents can choose to invest in predictive analytic providers that supposedly tell us which sellers are ready to move - one of the criteria used is years in the property.
It's difficult to imagine that it's been 10 years since the real estate boom in 2006 & 2007. My best year ever since I got licensed in 1983 was 2006. Many people that purchased their homes during those years are still not showing equity. Some of those home owners feel trapped in their homes but they don't want to lose them and ruin their credit nor do they want to rent, so they're making do until they can afford to sell.
It's especially difficult for people that bought condos. Generally speaking, condominiums don't appreciate in value at the pace single family homes do. It's one thing to be stuck in a home that you might have outgrown, but if a young couple that started out in a condo starts having children, the squeeze of living in a small space can be felt that much more. I'm taking an educated guess that more people that purchased homes during the real estate bubble are inching towards equity while some condo buyers are still underwater.
Median Days on Market
I wish they would have told us the median days on market in the past so we could compare. I did my own search in our MLS for Orland Park homes for sale over the past 12 months and the average days on market were 99. This includes when the home was listed all the way up to closing - so I'm not sure that's how the infographic shows it since that would mean the home sold almost immediately since it takes 30-45 days to get a mortgage, although cash offers a quicker closing time. Also, our stats show "average" market time, not "median" like the infographic. The above infographic is nationwide and there are some areas where they can't keep homes in the MLS as they sell so quickly.
FSBO's Are Dwindling
In the past, many of my listings were prior For Sale By Owners who tried it on their own, didn't succeed and listed with a real estate agent/brokerage. Now it's hard to find a FSBO. Most sellers don't have the time to get their home listings advertised properly, set up appointments themselves, try to pre-qualify buyers, handle all the required paperwork and disclosures, etc.
Real estate today isn't like it was in 2006 or the 1990's or whenever the FSBO's purchased their home or sold prior homes. Many home owners I interview with tell me how they sold several homes on their own in the past. It's a different market out there today with a different kind of buyer mindset. Most buyers won't discuss their financing with a FSBO and a lot of FSBO's give up when they thought they sold their home only to have the transaction fall apart, sometimes at the last minute.
This can happen with any purchase, even with a home listed with a real estate brokerage, but we can try to hold a transaction together if at all possible. In fact, my husband Jimmy and I have gone above and beyond to hold a purchase together that could have easily fallen apart. But when a buyer loses their job there's nothing much anyone can do, and that has happened.
Sellers That Worked With Agents
I've explained the percentage of buyers that worked with agents, but if FSBO's only account for about 8% of home sellers, then where does the other 3% come from? I'm guessing it's sales to friends, family and even neighbors. Technically, these could be considered FSBO sales but they really aren't. These sellers already had a buyer in their hands. They didn't have to promote their home or advertise or have multiple showings to different people.
If you're thinking about buying and or/selling in the coming year be sure to give us a call at 708-536-8200. This year went by fast! We're looking forward to another good year in 2017.