According to a National Association of Realtors survey of buyers and sellers, first-time homebuyers accounted for half of all home sales from July 2009 through June 2010. That’s the highest share of first-time-buyer purchases in the history of the survey, which dates back to 1981. First-time buyers responding to the survey made up 47 percent of sales in 2009.
The vast majority of first-timers (93 percent) participating in the survey, and almost three-quarters of all buyers (71 percent) responding to the survey participated in a federal homebuyer tax credit program.
The tax credits were available to eligible homebuyers who bought between Jan. 1, 2009, and April 30, 2010. First-time buyers were eligible for a credit of up to $8,000, and an extension and expansion of that program, approved Nov. 6, 2009, made repeat buyers eligible for up to a $6,500 credit. (Unlike a separate first-time homebuyer tax credit program offered between April 8, 2008, and Dec. 31, 2008, those credits do not have to be repaid.)
The typical first-time buyer was 30 (compared to a median 49 for repeat buyers and 39 for all buyers). The median household income for first-timers was $59,900, compared to $87,000 for repeat buyers and $72,200 for all buyers. Overall, median income for all buyers fell $900 from 2009′s survey. Income figures are based on 2009 data.
First-time buyers planned to stay in their home for a median of 10 years, while repeat buyers planned to stay for 15 years. Typical sellers had remained in their previous home for eight years, up from seven years in the 2009 profile. Sellers sold their homes for a median $33,000 more than what they paid for it — a 24 percent increase.
“Sellers who purchased at the top of the market and had to sell in a short time frame were hurt by the price correction, but the vast majority who are able to stay for a normal period of home ownership generally built enough equity to make a trade-up purchase,” said Vicki Cox Golder, NAR’s president, in a statement. “Despite swings in the housing market in recent years, the fact is most long-term owners see healthy gains in the value of their property.”
Generally, the longer a seller stayed in the home, the higher the equity gain, with those who stayed for 21 years or more seeing a 152 percent increase. The one exception to this was those who had owned the home for one year or less. Those sellers sold homes for $37,626 more than what they paid for them, on average — an increase of 17 percent.
“The primary exception is for experienced investors, many of whom pay cash and are making renovations or improvements after a careful study of properties, neighborhoods and market demand,” Golder said. ”The house flipping and quick gains that occurred during the boom period were abnormal, driven by risky, easy-money financing that should never have been allowed in the market.”
Sellers who had owned the home for less than a year only accounted for 3 percent of total sellers in the 2010 profile, compared to 6 percent in NAR’s 2006 profile. At that time, 30 percent of sellers had owned for three years or less, NAR said, compared to 11 percent in this year’s study.
The median age of sellers was 49, up from 46 in 2009. Sellers made a median income of $90,000, though agent-assisted sellers were more likely to have a higher income ($93,200) than for-sale-by-owner sellers ($64,000). The vast majority of sellers, 88 percent, sold their home using an agent — up from 85 percent in 2009′s profile. For-sale-by-owner sales reached a record low in the survey, at 9 percent.
The vast majority of buyer respondents, 89 percent, searched online for a home. The median age of these buyers was 37, compared to 57 for those who did not. Internet searchers also had significantly higher median incomes: $74,200 vs. $55,200. Most buyers who searched online (85 percent) used an agent to buy a home. Almost half (48 percent) of buyers found their agent through a referral from a friend, relative, or neighbor; the next highest percentage, 10 percent, used a website.
Multiple listing service websites were the most commonly used online resource: 59 percent of all buyers who used the Internet to search for properties reported an MLS site. Realtor.com was next at 45 percent, followed by a real estate company Web site (43 percent), a real estate agent website (42 percent), and other websites with real estate listings (41 percent). Social networking websites such as Facebook and MySpace were used by only 2 percent, the survey found, and video hosting websites like YouTube were used by only 1 percent.
The most valuable website feature for buyers was the presence of photos: 85 percent said they found photos “very useful.” Detailed property information was very useful for 83 percent and virtual tours were very useful for 61 percent.
The share of buyers who are married couples has fallen from 68 percent in 2001 to 58 percent in 2010. Single buyers make up 32 percent of all buyers, up from 22 percent in 2001. A fifth are single women and 12 percent are single men. Eight percent are unmarried couples.
Ninety-one percent of all buyers financed their home purchase; only 8 percent were ever rejected by a lender. Of those buyers, 42 percent obtained a conventional loan, 43 percent an FHA loan, and 7 percent a VA loan.
Inman News, November 2010
