This is a re-blog of a post by Florida Realtor Allison Stewart on ActiveRain discussing research data made available at the NAR Conference.
The market always heals from the bottom up” according to Paul Bishop, National Association of Realtors Vice President of Research. According to the recently released sales numbers 47% of buyers this past year were first time home buyers. Surpassing the previous high record of first time purchasers set back in 1991
“These buyers are critical to housing and a general economic recovery …they absorb inventory, free existing owners to make a trade and stimulate related goods and services ” said Bishop. He compared this rise to the last recession in 1991, where the same dynamic played out “first time home buyers started the chain reaction that led the nation out of recession” he said. Bishop credits tax incentives,record high affordability, and pent up buyer demand to this spike in recent sales. Economists would also credit the FED with suppressing any immediate rise in interest rates affecting home mortgages while the economy is still so fragile.
BUYER PROFILES ARE ALSO DIFFERENT THAN ONE WOULD EXPECT
The median age of a first time home buyer is 30 indicating that some are younger and some are older. They are planning to live in their homes for at least ten years. The typical cost Nationwide was $156,000 down 7% from last years figure of $165,000. 87% of First time Home Buyers surveyed consider their home to be a good investment.” Single Family homes sold a higher rate than other forms of housing. In fact 78% of the home achieved were single family homes
HOW ARE BUYERS PAYING FOR HOMES? 96% Chose a fixed rate mortgage. (55% used FHA compared to 8% Using VA Programs) 61% of First time buyers used their savings as a down payment. 22% received down payment assistance as a gift from family. 6% received loans for down payments from family 6% tapped into a 401 (k) program
WHAT IS OLD IS NEW AGAIN- SAVING MONEY FOR A DOWN PAYMENT ON A HOME
39% of home buyers have cut back on luxury items, 38% cut back on entertainment and 30% cut back spending on clothing according to the study.
And a staggering 80% of first time home buyers are using the Internet.
HOW HAVE RECENT CHANGES IN REAL ESTATE AFFECTED SALES?
13% Experienced a Purchase Agreement that was canceled, terminated or fell through “This raises the question of how many potential buyers were unsuccessful because of problems with appraisals or loan qualifications. The market would be stronger without these problems” Bishop added.
Only 8% of applicants were rejected for loans (a 92% success rate) 12% of applicants said that financing their first home was more difficult than they expected. 8% of all buyers paid cash.
85% of Successful Home Sellers used a Real Estate Professional. Sellers surveyed want agents to price their homes competitively, find a buyer, market the property and sell within a specific time frame.
THE TAX CREDIT EXPANSION INTO 2010
The expansion of the tax incentive program will extend to homes placed under purchase agreements by April 30, 2010 and will include home buyers who have owned a home in the past 5 years.
Repeat Buyers surveyed had an average age of 48, earning $88,100 and plan to stay in the homes they purchased on average for 12 years. These buyers typically bought more expensive housing. The median price on a National level was $224,500
RECORD DECLINE IN FOR SALE BY OWNER PROPERTIES.
In the actual number of homes sold without representation was a record low according the most recent survey only 6%. Declining for the second year in row.
The most difficult tasks reported by owners attempting to sell homes themselves were,; preparing and fixing the home, understanding and performing the paperwork and selling within the planned length of time.
The overwhelming majority of successful sellers used a Real Estate Professional full service brokerage.
St. Cloud Florida Real Estate Broker/Associate,