2011 Survey of California Home Buyers The copyright laws of the United States (Title 17 U. S. Code) forbid the unauthorized reproduction of this report by any means, including facsimile or computerized formats. Copyright © 2010 CALIFORNIA ASSOCIATION OF REALTORS®
Overview • • • Methodology Executive Summary About the Buyer About the Home The Buying Experience • • Why Buy Now Internet Use Financing Agent Interface
Methodology ¬ Telephone surveys of 1, 400 home buyers who purchased in the past 3 months (January through March). (Previous studies surveyed buyers who purchased in the last 6 months. ) ¬ Maximum sampling error: ± 2. 62 percent at two standard deviations (a 95% confidence level). (Subsets of the total sample will have a higher sampling error. )
Executive Summary
Executive Summary ¬ Typical buyer is a married white male, between 25 and 34 years old, has a bachelor degree and earns between $75, 000 and $100, 000 ¬ 43% of buyers are first-time buyers ¬ Safety, schools and proximity to friends, relatives and work are the most important neighborhood characteristics
Executive Summary ¬ Buyers considered buying for 12 weeks before contacting agent ¬ Buyers investigated for six weeks before contacting agent ¬ 76% of buyers did not close escrow on time ¬ Most buyers were motivated to purchase by increased affordability (low prices & low interest rates)
Executive Summary ¬ 94% of buyers used an agent ¬ 58% found their agent online ¬ 51% Googled their agent ¬ 80% of buyers found their home through agent ¬ 54% of buyers would work with same agent again
Executive Summary ¬ 93% of buyers are receptive to receiving information via social media ¬ 80% of buyers would find agent ratings beneficial ¬ 42% of buyers put 20% down ¬ 92% of buyers obtained financing ¬ 72% found it difficult
ABOUT THE BUYER
The Typical Buyer • Male (52%) • White (35%) • 25 to 34 years old (43%) • Married (65%) • Repeat buyer (57%) • Has bachelor degree (43%) • Earns $75, 000 to $99, 999 annually (32%) • Resides in Southern California (53%)
Age Median Age: 35 Q. What is your age?
Buyers Are Getting Younger
Ethnicity of Buyers Q. How would you describe your ethnic background?
Ethnicity of Californians Source: U. S. Census Bureau
Buyers Are Highly Educated Q. What is the highest level of education you have completed?
Annual Household Income Q. Which of the following best describes your total annual household income from all sources?
Residence Location Q. What county do you live in?
Percentage of First-time Buyers Remains High Q. Was this your first home purchase?
ABOUT THE HOME
The Typical Home Short sale (46%) Safe neighborhood (72%) $301, 000 (median price)
Type of Sale SOURCE: California Association of REALTORS® Annual Housing Market Survey
Neighborhood is Important Q. What was more important to you in buying the home you did?
Neighborhood is Important…Especially to Boomers Q. What was more important to you in buying the home you did?
Safety First! Q. What were the most important neighborhood characteristics that influenced your decision to buy your current home?
Most Important Home Features Q. What were the most important home features that influenced your decision to buy your current home?
Home Price Q. What was the price of the home you purchased?
THE BUYING EXPERIENCE
The Buying Experience • Considered buying for over 4 months & investigated homes/neighborhoods for 2. 5 months, on average, before contacting an agent • Viewed 12 homes in 8 weeks with agent • 76% didn’t close escrow on time • 49% owned previous home • Motivated by price decreases & mortgage interest and property tax deductions • 80% found home through agent
Living Arrangement Before Purchase Q. What was your living arrangement immediately before your recent home purchase?
Buyers Spend More Time Considering Purchases Before Contacting Agent Q. How many weeks did you consider buying a home before contacting a real estate agent?
Time Spent Investigating Homes & Neighborhoods Before Contacting Agent Q. How many weeks did you spend investigating homes and neighborhoods before contacting a real estate agent?
Buyers Viewed Fewer Homes With Agent * Reflects only buyers who used an agent Q. About how many different homes did you preview and visit with him/her [agent] prior to your purchase?
What Got Buyers Off the Fence? Q. What got you off the fence and motivated you to buy your home when you did?
Primary Reasons for Buying Q. What was the primary reason for buying your home?
Market Conditions Motivate Buyers 2006 2011 Low rates enabled move to better location Motivated by price decreases Likelihood of rate increase Price decreases improved affordability Low rates enabled purchase of larger home Low interest rates improved affordability
How Buyers Found Home - 2011 - Q. How did you find the home your purcahsed?
How Buyers Found Home - 2007 - Q. How did you find the home your purcahsed?
Buyers Remain Uncertain About Future Home Price Direction Up Down Flat 1 Year 21% 0% 26% 5 Years 46% 0% 11% 10 Years 68% 0% 2% Unsure 53% 43% 30% Q. Do you think home prices in your neighborhood will go up, down, or stay flat in 1 year? 5 years? 10 years?
Future Home Price Direction - 2011 - Q. Do you think home prices in your neighborhood will go up, down, or stay flat in 1 year? 5 years? 10 years?
Future Home Price Direction - 2010 - Q. Do you think home prices in your neighborhood will go up, down, or stay flat in 1 year? 5 years? 10 years?
Future Home Price Direction - 2009 - Q. Do you think home prices in your neighborhood will go up, down, or stay flat in 1 year? 5 years? 10 years?
Internet Use The copyright laws of the United States (Title 17 U. S. Code) forbid the unauthorized reproduction of this report by any means, including facsimile or computerized formats. Copyright © 2006, CALIFORNIA ASSOCIATION OF REALTORS®
How Internet Was Used Activity Percentage of Buyers Preview homes to narrow search 75% Find an agent 68% Identify homes for agent to show 47% Find a real estate firm 40% Learn about neighborhoods 33% Get information about financing & downpayments 33% Q. For which of the following did you use the internet as a part of your home buying process?
How Internet Was Used Q. For which of the following did you use the internet as a part of your home buying process?
Top 10 Websites Used Real es tate co mpany website Real estate agent website Q. Which websites did you use as part of your home buying process?
Realtor. com Most Visited Website Q. Which websites did you use as part of your home buying process?
Most Useful Websites Real estate company website Real estate agent website Q. What was the most useful website that you visited during your home buying process?
Realtor. com Most Useful Website Q. What was the most useful website that you visited during your home buying process?
Website Where Home Was Found Real es tate co mpany website Real estate agent website Q. On which website did you find your home?
Importance of Online Features in Home Viewing Q. Please rate the following online features by the level of importance in your home viewing on a scale of one to five, with five being extremely important and one being not at all important.
52% of Buyers Used Social Media Activity Percent of Buyers Who Engaged in Activity Agent referrals 33% Video home tours 26% Agent Facebook page 24% Home buying tips 23% Comments on neighborhoods 21% Neighborhood lifestyle 20% Q. How did you use social media (such as Facebook, Twitter, Linked. In, etc. ) in your home buying process?
Financing The copyright laws of the United States (Title 17 U. S. Code) forbid the unauthorized reproduction of this report by any means, including facsimile or computerized formats. Copyright © 2006, CALIFORNIA ASSOCIATION OF REALTORS®
Quick Facts • 92% of buyers obtained financing, but 72% found it difficult • 42% of buyers put 20% down • Over 84% obtained a 30 -year, fixed rate loan Q. For which of the following did you use the internet as a part of your home buying process?
Buyers Continue to Have Difficulties Obtaining Financing 2009: Mean = 8. 1 Median = 9 2010: Mean = 8. 5, Median = 9 2011: Mean = 8. 0, Median = 9 Q. Please rate how easy of difficult it was to obtain financing on a scale of 1 to 10, with 1 being very easy and 10 being very difficult.
Downpayment - Percentage of Home Price - Q. What was your down payment for the home purchase (in percent of home value)?
AGENT INTERFACE
Quick Facts • • • 94% of buyers used an agent 58% of buyers found their agent online 56% of buyers interviewed at least 2 agents 51% Googled their agent 93% are receptive to receiving information via social media • 54% would work with same agent again • 80% would find agent ratings beneficial
How Buyers Found Their Agents Q. How did you find your real estate agent?
# of Agents Interviewed Q. How many agents did you interview prior to selecting the agent you used in your recent home purchase?
Why Buyers Chose their Agent 1. Most responsive (28%) 2. Worked with agent before (18%) 3. First to respond (17%) 4. Most aggressive (16%) 5. Most knowledgeable (6%) Q. What was the single most important reason for selecting the agent that you used in your recent home purchase?
Method of Communicating With Agent Q. What was your preferred method of communicating with your agent? How did your agent actually communicate with you?
Method of Communicating With Agent Q. What was your preferred method of communicating with your agent? How did your agent actually communicate with you?
Method of Communicating With Agent Q. What was your preferred method of communicating with your agent? How did your agent actually communicate with you?
Agent Response Time Is Very Important - Rating on 1 to 5 Scale - Q. Please rate the importance of the agent’s response time in the decision on your final selection on a scale of one to five, with five being extremely important and one being not at all important.
Expected vs Actual Agent Response Time Q. What was the typical response time you expected from your agent to return any form of communication to you? Q. On average, what was the actual response time of your agent to return any form of communication to you?
Room for Improvement in Response Time Q. Did your agent meet your expectations on response time?
Agents Need to Improve Response Time - Rating on 1 to 5 Scale - Q. Did your real estate agent meet your expectations on response time? Please rate your agent’s response time on a scale of one to five, with five being agent exceedingly surpassed expectations and one being agent fell way below expectations.
Over 1/3 of Buyers Expect Instant Response from Agent - Up 50% in Recent Years - Q. What was the typical response time you expected from your agent to return any form of communication to you?
Satisfaction Ratings Category Rating Information on housing market conditions provided by agent 3. 27 Agent’s negotiating skills 3. 20 Assistance provided by agent in searching for a home 3. 39 Professional referrals from agent provided (i. e. lender, inspector, etc. ) 3. 12 Value received for what you paid the agent 3. 61 Overall process of finding a home 3. 56 Overall satisfaction with agent 3. 44 Q. Please rate your degree of satisfaction with these aspects of your home buying experience (aspects shown in the table above).
Buyer Satisfaction Reflects Market Conditions Q. Please rate your degree of satisfaction with these aspects of your home buying experience (aspects shown above).
Reasons for Satisfaction With Agent 1. Worked hard on my behalf (55%) 2. Helped find the best home for me (55%) 3. Always quick to respond (31%) 4. Negotiated good deal on my behalf (29%) 5. Listened to what we needed (20%) Q. Why do you have that level of satisfaction with your agent?
Reasons for Dissatisfaction With Agent 1. Slow to respond (51%) 2. Communication problems (19%) 3. Didn’t communicate effectively during transaction (14%) 4. Didn’t negotiate aggressively on my behalf (12%) 5. Wasted time with homes I’m not likely to buy (3%) Q. Why do you have that level of satisfaction with your agent?
Most Buyers Would Work With Agent Again Q. Would you work with the same agent again?
What Buyers Would Like to Change About their Home Buying Experience 1. Faster response from agent (30%) 2. Better agent negotiation (27%) 3. Better agent communication (25%) 4. Better market direction understanding (19%) 5. Escrow close on time (9%) Q. If there is one thing you would like to change about your home buying experience, what would that be?
Advice to Agents 1. 2. 3. 4. 5. Gain better understanding of where market is headed Learn how to handle a distressed property transaction Respond faster Communicate how the client wants and better Gain better understanding of where interest rates are headed 6. Provide more assistance in acquiring mortgage approval 7. Negotiate better Q. What advice would you give to real estate agents to improve the process or the level of service?
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