American Realtors Reflect on 2010!

Over 20 thousand realtors from United States and 1,300 delegates from 51 countries gathered in New Orleans this month at their annual NAR Convention. This was a good time to look back and summarize the passing year of 2010.  As one of the speakers said “this was a year of challenges and also the year of optimism and opportunities”

According to the latest survey conducted by National Association of Realtors (NAR) the typical seller in 2010 has held their previous home for eight years, which is an increase from the 2009 study, while first time buyers have plans of residing in their home for ten years.  Further, repeat buyers are planning on holding their property for fifteen years.  Other statistics include the observation that even though property prices were declining, the typical seller who invested eight years ago saw a median equity gain of $33,000, representing a twenty-four percent increase.  Those who lived in their homes for eleven to fifteen years saw a median gain of 40 percent.

These statistics prove that even though the housing market fluctuated significantly in the past few years, those who were able to keep their properties for a normal period generally built up enough equity to make a trade-up purchase.

NAR President Vicki Cox Golder said it very accurately “home ownership encourages stability, and the longer you own, the better your investment”.

Further statistics present in the survey show that in 2010, three percent of sellers owned their home for less then a year, which is a decline from 6 percent in 2006, and a total of eleven percent had owned for three years of less, also a decline from the 30 percent statistic in 2006.

These statistics point to the following recent trends.  Most homebuyers now, in fact eighty-five percent according to the survey, consider their home as a good investment.  This solidifies the fact that even though the real estate market took such a big hit, the long-term consumer view of home ownership still remains solid.  Most buyers purchase a home simply because they want to own a home of their own.  Further, other factors fueling home buyers include a desire a larger home, a change in family situation, the home buyer credit, work related changes, and home affordability.

 In fact, in 2010, the number of first time buyers increased to fifty percent, from the forty-seven percent statistic in 2009. 

The profile of the first time buyer was one how was thirty years of age, had a median income of $59,900, and purchased a 1,540 square foot property costing $152,000.  Ninety-three percent used the first time buyer tax credit.

Financing statistics of first time buyers included making down payments using numerous sources, amongst these: savings, gift from relatives, and loans from relatives.

The profile of a typical repeat buyer was one who was forty-nine years of age, earned $87,000, and who purchase a 2,000 square foot property costing $215,000. 

When buyers were asked about their choice of agents, they survey indicated that consumers thought agents who offered help finding the right house and negotiated sales terms and prices effectively were amongst the most important criteria. Agents were chosen based on referrals as well as their reputation and trustworthiness in the community. 

In addition, the study showed that the internet was the primary source buyers used to learn about a home, followed by information received from agents, yard signs or open houses, friends and relatives, home builders, newspaper or print ads, and finally, from a home book or magazine.

The geographic statistics of the 2010 study show that fifty-two percent homes purchased were in a suburb or subdivision, eighteen percent were in an urban area, seventeen percent in small town, eleven percent in a rural area, and one percent in a resort or recreation area.

Overall, this 2010 study of this real estate market is pointing toward a promising trend.  Of most importance is the fact that consumer confidence is rising, and people understand the investment value and long-term benefits that real estate ownership provides.

JOHN BUDZ