2010 Homebuyer Survey

One of the most useful research projects of the National Association of Realtors® (NAR) is the annual survey of homebuyers and sellers. The 2010 version (Profile of Home Buyers and Sellers 2010) became available in November of this year.

The information is based on answers to an eight-page questionnaire mailed to 111,000 consumers who purchased a home between July 2009 and June 2010. (Names and addresses were provided by Experian, a company that maintains an extensive database of recent homebuyers that is derived from county records.) There was a 7.9 percent response rate.

In 2010, first-time homebuyers constituted 50 percent of the market. That is a huge portion. There are a number of factors to explain this increase, one of which is that first-time buyers don’t have to sell a home before they can buy. Moreover, prices have been dropping while interest rates remain low by historical standards. Especially, government policies such as tax credits have played a major role.

Only four percent of buyers purchased a home that had been foreclosed or that was in the process of foreclosure. That is actually lower than a couple of years ago. In 2010 a full 39 percent of buyers did not even consider buying a home in foreclosure. Of those who did consider making such a purchase, but did not ultimately do so, the primary reason (26%) was that they simply could not find a home that was right for them. Nineteen percent did not purchase a foreclosure home because the process was too difficult or complex. Another seventeen percent did not buy because the house was in poor condition.

Certainly the most useful information for sellers and their agents is to be found in the section on the home search process. While the survey results are not significantly different from those of recent years, the trends continue. For example, this year 74 percent of buyers said that they used the internet frequently during the search process, about the same as 76% last year. In 2003 that number was 42%.

Thirty-six per cent of buyers went to the internet as the first step in the home search process. 19 % contacted a real estate agent first, and 7% began by driving through neighborhoods looking for homes for sale.

Buyers use multiple sources of information in the process of looking for a home. Far and away the most used sources are the internet (89%) and real estate agents (88%). What is the third most used information source? Yard signs (57%).

Multiple Listing Service (MLS) websites were the primary source of information for buyers who used the internet in their search process. 59 percent of those buyers went to MLS sites. Of course, many went to a variety of different sites. 45 percent used Realtor®.com, 43% went to real estate company websites, and 42% went to sites hosted by individual agents. Aggregators such as Zillow, Homegain, and Yahoo were visited by 41% of buyers.

While there is a lot of intriguing information about the sources of information used by prospective homebuyers, certainly the most relevant has to do with where they actually found the home that they ultimately purchased. It is still the case that, more than any other source, a real estate agent is responsible for informing the buyer about the home that is ultimately purchased. That is how 38 percent of buyers found their home.

But the internet is a very close second (37%). Moreover, the differences in less than a decade are fascinating. In 2001, 48 percent of buyers learned about their home through a real estate agent, and only 8 percent found their home on the internet. The times they have changed.

Some things though, remain persistently the same – or close to it. In 2001, a yard sign was the third most likely source of information leading to the home that was purchased (15%). And this year? It is still the third leading source at 11%. Print media may not be dead, but it has shrunk to insignificance in this arena. In 2001, 7% found the home they purchased through a newspaper ad; in 2010 it was 2%. Fewer than 1% found their home through a home book or magazine.

The 2008 Profile of Home Buyers and Sellers shows what works. It is a valuable resource.

Published: November 30, 2010
By: Bob Hunt