BRIAN BUFFINI S REAL ESTATE REPORT 3RD QUARTER 2016 FOLLOW-UP PROGRAM EDITION
Twice a year, we produce Brian Buffini s Real Estate Report, a guide that provides important facts and information about the national real estate market to help you educate your clients about the process of buying or selling a home. We ve updated many of the statistics in this resource to reflect changes in the national market. Use this resource in your listing presentations to help you not only flex your expertise on the real estate market, but also help you set expectations with your clients and find ways to serve them better. It s a good life! CONTENTS Industry Facts PAGE 1 Mortgage Stats PAGE 2 Price Information PAGE 3 Today s Buyer PAGE 4 First-Time Homebuyer Facts PAGE 5 Today s Seller PAGE 6 Millennials & Real Estate PAGE 7 Buyers & the Internet PAGE 8 Today s Real Estate Professional PAGE 9 Why I Work by Referral PAGE 10 2015 Buffini & Company. All rights reserved.
Brian Buffini s Real Estate Report PAGE 1 INDUSTRY FACTS MEDIAN DAYS ON THE MARKET: 34 Days The median home is on the market for the same number of days in the summer of 2016 as it was in the summer of 2015. There is a 4.6 month supply of homes at the current sales pace. The homeownership rate is 63.5%. 63+37+L 63% of Americans said they would buy if they were going to move today. 48% of homes sold in June were on the market for less than a month. 43% expect their personal financial situation will get better in the next 12 months; 42% expect it to stay the same. 39+61+L 43% EXISTING HOME SALES BY REGION: 51% say their homes have increased in value over the past year. expect home values in their neighborhood to increase in the coming year. Northeast: Existing home sales decreased 1.3% to an annual rate of 760,000. Midwest: Existing home sales increased 3.8% to an annual rate of 1.35 million. 58+42+L 54% of American s say rent will increase in the next 12 months; 35% say rent will stay the same. 60% say that now is a good time to buy. 43% South: Existing home sales increased 2.7% to an annual rate of 2.26million. West: Existing home sales increased 1.7% to an annual rate of 1.20 million. say that homeownership is a good way to build equity or more assets. SOURCES: NATIONAL ASSOCIATION OF REALTORS, U.S. CENSUS BUREAU, FANNIE MAE, WELLS FARGO, FEDERAL RESERVE BOARD
Brian Buffini s Real Estate Report PAGE 2 MORTGAGE STATS 51+49+L 49+51+L 67+33+L 36+64+L 48% of Americans say mortgage rates will go up in the next 12 months. 55% 67% say it would be easy to get a home mortgage. of people think you need to have a very good credit score to buy a home. 36% believe a 20% down payment is always required. 92+8+L 89+11+L 92% of people want to be involved throughout the mortgage process, seeing each step along the way. 89% want to have a personal connection with their lender. There was an increase in high-credit borrowers that is, borrowers with FICO scores above 700 in 2015. The average credit score for purchase mortgages was 755, a record high. The average credit score in the U.S. is 695. 3 TYPES OF LOANS BUYERS CHOSE: 59% Conventional 23% FHA 11% VA 7% Other AMONG FIRST-TIME BUYERS: 66% Conventional 16% FHA 13% VA TYPES OF DEBT: Credit card debt - 69% Student loans - 45% Car loans - 44% Other - 26% 69+ 45+ 44+ 26 Only 13% of people say their existing debt is the biggest barrier to buying a home. Half of all buyers used their savings for a down payment, 17% used the sale of a previous home and 11% purchased their home without a down payment. Buyers typically financed 90% of their home purchase. 86% of buyers financed their home purchase, including 97% of buyers aged 25 to 44. 91% of borrowers chose a fixedrate mortgage. 60% of buyers said the mortgage application and approval process was not or was easier than expected. 5% Other AMONG REPEAT BUYERS: 47% Conventional 35% FHA 9% VA TOP 3 SOURCES OF DOWN PAYMENTS 9% Other 1. Savings 2. Sale of a primary residence 3. Gift from family/friend SOURCES: FANNIE MAE, WELLS FARGO, NATIONAL ASSOCIATION OF HOME BUILDERS, CNBC, NATIONAL ASSOCIATION OF REALTORS, NAR 2015 PROFILE OF HOME BUYERS AND SELLERS
Brian Buffini s Real Estate Report PAGE 3 PRICE INFORMATION Home prices rose 4.8% on a 12-month seasonally adjusted basis in June 2016, the 52nd consecutive month of year-over-year growth. The median existing home price for all housing types in June 2016 was $247,700, up 4.8% from June 2015. The median existing home price for single family homes was $249,800 in June 2016, up 5.0% from June 2015. 46+54+L The median existing condo price was $231,600 in June, up 3.2% from the previous year. 49% of Americans say home prices will increase in the next 12 months. The average price of a new home was $358,900 in May 2016. SOURCES: NATIONAL ASSOCIATION OF REALTORS, FANNIE MAE Median Existing Home Prices by Region: Northeast: Median home prices increased 1.4% to $284,800. Midwest: Median home prices increased 5.7% to $199,900. South: Median home prices increased 5.5% to $217,400. West: Median home prices increased 7.2% to $350,800.
Brian Buffini s Real Estate Report PAGE 4 TODAY S BUYER 2.2 million boomerang buyers, or buyers who were forced to sell or had their homes foreclosed upon, can re-enter the market in five years. TOP 3 REASONS BUYERS CHOSE A HOME 1. Size 2. Room layout/design 3. Price TOP 9 PROFESSIONS WHO OWN HOMES BY PERCENTAGE: 90.4% of farmers and ranchers 84.9% of real estate agents 84% of postal workers 83.6% of firefighters 80.1% of police officers 78.5% of mechanics 77.8% of construction workers 75.3% of landscaping owners 69.1% of hairstylists/cosmetologists 44: The age of a typical buyer. $86,100: The median household income of a home buyer. TOP 5 FACTORS INFLUENCING NEIGHBORHOOD CHOICE 1. Quality of the neighborhood 2. Convenience to workplace 3. Overall affordability of homes 4. Convenience to friends/family 5. Design of neighborhood Buyers purchased their homes for an average of 98% of the asking price. Buyers expect to live in their homes for 14 years. Buyers searched for an average of 10 weeks and viewed 10 homes, unchanged from 2014. 54% proud of. 30% said homeownership is an achievement to be said it was a dream to own a home. For more than half of buyers, the most difficult step of the home buying process was finding the right property. SOURCES: DS NEWS, NATIONAL ASSOCIATION OF HOME BUILDERS, KEEPING CURRENT MATTERS, WELLS FARGO, NATIONAL RESERVE BOARD, NATIONAL ASSOCIATION OF REALTORS
Brian Buffini s Real Estate Report PAGE 5 FIRST-TIME HOMEBUYER FACTS 32+68 32% of buyers were first-time buyers, including: 43% of buyers in the Northeast 38% of buyers in the Midwest 30% of buyers in the South 26% of buyers in the West 56+18+11+13+2 56% of first-time buyers were married 18% were single females 11% were single males 13% were unmarried couples 2% Other 40% of first-time buyers had children under the age of 18 living at home. 75% house before buying a home. rented an apartment or 19+81 19% lived with parents, relatives or friends. 31: homebuyers. The median age of first-time $69,400: The median income of first-time homebuyers. For 64% of first-time buyers, the desire to own a home was the primary reason they purchased one. First-time buyers financed 94% of their home purchase. SOURCES: NATIONAL ASSOCIATION OF REALTORS
Brian Buffini s Real Estate Report PAGE 6 TODAY S SELLER 54: The median age of a seller. $104,100: The median income of a seller. 37+63+L 37% Sellers lived in their homes 9 years. This is down from 10 years last year. of sellers were first-time sellers. TOP 3 REASONS FOR SELLING: 1. Home is too small 2. Job relocation 3. Move closer to friends or family 52+48+L Sellers report their homes were on the market a median of 4 weeks before they sold. 36% say their homes were listed for 1 to 2 weeks before they sold. 52% home warranty policies and closing costs. of sellers offered incentives to attract buyers, including 44+56+L 44% of sellers reduced the initial asking price at least once. SELLERS UPGRADED 42% of sellers bought a home larger than their current one. 47% purchased a more expensive home. 54% purchased a newer home. SOURCES: NATIONAL ASSOCIATION OF REALTORS
Brian Buffini s Real Estate Report PAGE 7 MILLENNIALS & REAL ESTATE 28% of home buyers are between the ages of 25 and 34, the largest share of any age group. Nationally, it s 23% cheaper for millennial households to buy instead of rent. Millennials want the amenities of city living, but also want some green space. Millennials want a place near parks, grocery stores, family/friends, schools/ employment, entertainment, retail stores and places of worship. MARKETS WHERE IT S SOMEWHAT CHEAPER FOR MILLENNIALS TO BUY THAN RENT: Orange County, CA (buying is 5% cheaper) San Francisco, CA (buying is 7% cheaper) Oakland, CA (buying is 7% cheaper) Sacramento, CA (buying is 8% cheaper) Newark, NJ (buying is 10% cheaper) San Diego, CA (buying is 10% cheaper) Ventura County, CA (buying is 11% cheaper) New York, NY-NJ (buying is 11% cheaper) Millennial renters today want to own a home. 72% of millennial renters say owning makes more sense than renting because homeowners are protected against rent increases and owning is a good investment over the long term. 60% of millennial renters say owning makes more sense than renting because homeowners have more control over where they live and a better sense of privacy and security. MARKETS WHERE IT S SUBSTANTIALLY CHEAPER TO BUY THAN RENT: Houston, TX Baton Rouge, LA Fort Lauderdale, FL Syracuse, NY Miami, FL New Orleans, LA Tampa, FL Detroit, MI Columbia, SC Oklahoma City, OK San Antonio, TX West Palm Beach, FL Dallas, TX 50+50+L 33+67+L 50% of millennials have a positive attitude toward the buying experience. 33% of millennials expect to buy a home within 5 years. 67+33+L 46+54+L 67% of millennials prefer single-family homes. 46% of millennials plan to buy locally in the county in which they reside. SOURCES: NATIONAL ASSOCIATION OF REALTORS, CNN MONEY, FANNIE MAE, CALIFORNIA ASSOCIATION OF REALTORS, BLOOMBERG BUSINESS
Brian Buffini s Real Estate Report PAGE 10 8 BUYERS & THE INTERNET 94% of millennials searched online compared to 84% of Baby Boomers. 94+6+L78+22+L TIMES HAVE CHANGED 40% of buyers in 1964 read newspaper ads to find a home. In 2014, 43% of buyers looked for properties online first. 15% contacted a real estate agent 12% looked online for information about the home buying process 7% talked with a friend or relative about the home buying process 6% contacted a bank or mortgage lender 6% drove by homes and neighborhoods 65+35+L MOST POPULAR SEARCH TERMS FHA Loan Home grants Home loan/home loans Buying a home Home mortgage calculator Homebuyer assistance 78% visit more than 3 sites prior to taking action on a real estate site. 65% of buyers walked through a home they viewed online as a result of their Internet home search. More than 89% of buyers used the Internet to search for homes. TOP 5 WAYS BUYERS USE MOBILE DEVICES 1. Read general home info 2. Get directions to visit a home 3. Compare prices 4. Compare features 5. Search a listing company s inventory YouTube IS A TOP RESEARCH DESTINATION WHEN RESEARCHING A HOME 5 Ways Buyers Used YouTube 1. Find out more about a specific community 2. Tour inside a home 3. Obtain general information 4. Understand specific features 5. Watch customer testimonials 56+44+L 56% of all buyers found their home through a mobile application. More first-time buyers are consulting the Internet as their first step in the home buying process: 33% looked for properties first, while 23% looked for information about the home buying process. TOP 3 SOURCES OF INFORMATION USED IN A HOME SEARCH Online website Real estate agent Mobile or tablet website or application SOURCES: NATIONAL ASSOCIATION OF REALTORS, ENERICA