First time home buyers had the highest market share on record (since 1981) according to a survey by the National Association of Realtors® (NAR). The NAR surveys home buyers and sellers across the nation each year, and the results of their survey were released in November 2009 and cover the period from June 2008 through July of 2009.
The first time home buyer made up 47% of all buyers, up from an average of 40 to 41% over the previous 10 years. The previous high was 44% in 1991, also at the peak of the previous significant downturn in real estate.
The fact that first time home buyers made up a significant portion of home buyers this time around isn’t surprising given these two factors:
Homes became more affordable as prices dropped across the nation
The first time home buyer tax credit of up to $ 8,000 became available
So what is the profile of this first time home buyer? According to the NAR survey:
Their median age was 30
Their median income was $ 61,600
The homes they purchased cost $ 156,000
55% financed their home with an FHA loan
96% chose a fixed rate mortgage
61% used their savings for the downpayment; 22% received a gift from a friend or a relative
Also, according to this survey, are some interesting statistics of the typical buyer and buying process, whether first time or repeat:
The Buying Process:
Buyers started their home search process online and then contacted a real estate agent
90% of buyers used the Internet; 87% said they relied on real estate agents
Buyers searched a median of 12 weeks before they found their dream home
They viewed 12 homes before purchasing the one they wanted
The Typical Buyer:
66% are married couples
21% are single woman; 10% are single men
8% are unmarried couples and 1% are “other”
15% are non-white and 9% were born outside of the U.S.
The repeat buyer was typically 48 years old with a median income of $ 88,100 purchasing a home costing $ 224,500
87% see their home as a good investment and more than half see it as a better investment than stocks
What did they buy and how did they buy it?
78% bought a detached single family home
54% of the homes were in a suburb or subdivision; 18% were in an urban area
The typical home size was 1800 square feet
The median distance from their prior home was 12 miles
The median downpayment was 8%
8% paid all cash for their home
The survey also covered the typical home seller:
Their median age was 46 and their income was $ 91,100
They had been in their home for 7 years
They moved a median distance of 19 miles
Their home was on the market for 10 weeks
Nearly half traded up, 30% bought a comparable home, and 22% traded down
85% used a real estate professional
42% used incentives to attract buyers, such as paying for closing costs or providing a home warranty
The home sold for 95% of list price
The home sold for a median increase of $ 36,000 over the seller’s original purchase price
There were also some interesting stats on For Sale By Owner (FSBO) properties:
These were a record low of 6% of homes sold and has been trending downward since 1997
The median home price for sellers who used an agent was $ 215,000 vs. $ 172,000 for a home sold directly by the seller, however this difference can be explained by the fact that the FSBO sales were more likely to be in a rural area and more likely to be a mobile or manufactured home.
A complete report can be ordered from the National Association of Realtors at www.realtor.org.
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Donna Dazzo is a home stager and interior redesigner serving New York City and the Hamptons. She founded Designed to Appeal (http://designedtoappeal.com) in 2007 after a successful career in the financial services industry. Her experience in project management and marketing, combined with her lifelong passion for interior decorating and design, makes her a unique professional to help both realtors and home sellers sell homes faster and for top dollar.