First Time Home Buyers
– what are they thinking? Market Survey Results
As I go thru my email today the
familiar Lowe’s real estate newsletter comes into
view. “Survey
Reveals Possible Disconnect in First-Time Home Buying Process”.
Hmm … really? I’m curious as
to what buyers are always thinking and read on as to what the survey
produced. I’d thought I would pass it along to you
with my comments about the market conditions. It’s
actually quite enlightening!
“First-time
home buyers are primarily concerned with affordability when choosing a
new home, but their expectations
may be too high relative to their current financial
buying power, according to a recent Coldwell Banker® survey
conducted among its brokers.”
“While
nearly half of the Coldwell Banker broker respondents reported that
affordability was the No. 1 concern for this group, 81% said
today’s
first-time home buyers consider move-inconditions
to be
very important when searching for homes. In contrast, only 7% are looking
to purchase “fixer-upper” homes that they could buy
at a lower price and renovate themselves.”
“In
the past, first-time home buyers were willing to purchase older, more
basic houses in an effort to save
money and break into homeownership,” said Jim
Gillespie, president and chief executive officer, Coldwell Banker Real
Estate, LLC. “Today, this group has greater home expectations
because they have grown
up more accustomed to their parents’ lifestyles.
It is important for first-time home buyers to remember that by
considering a ‘fixer-upper’ for their first home
purchase, they can build equity over time and move up and into their
second-stage home that better reflects their expectations.”
Well that should be an eye
opener to alot of people! I really think that CB
did a great job with this survey
from their brokers on buyer expectations and it serves to reinforce my
own thinking over the last few years. Buyers are expecting a
whole lot more than they can afford. The home in their
“minds eye” is that of a 4BR Colonial with the half
acre and the 3 car garage. Problem is, they just started out
in the work force so the pay does not equal what they expect to
purchase. Unpleasant realization sets in when they have to
compromise their desires.
I’ve noticed
that the majority of buyers just don’t want to do
ANY
work. ANY being really none, zero. No
wallpaper
removal, no painting, for heavens sake no kitchen remodel!
I’ve also noticed that buyers are
becoming “overwhelmed” with the process remodeling
entails even in their heads. So a warning to all sellers
reading this – your agent is not making this stuff
up! Buyers do not want to remodel your house! They
don’t want to change the 80’s wallpaper that you
don’t even like any more!
Another point is that I
can’t find any buyers that want to buy a fixer upper and work
their way into equity. I just realized it but I
haven’t had a buyer say that to me in quite
sometime. So I guess forget about that concept!
"Survey findings also
suggest that first-time home buyers worry more about credit ratings and
approval than they did a decade ago, but less about down payments. This
may be because they have saved money themselves, or have received
additional support from parents to help their first-time home purchase."
"According to 29% of
brokers surveyed, first-time home buyers were more concerned with down
payments 10 years ago than anything else, while only 17% said this is
the biggest concern in today’s market."
I’ll
have to agree here, but I think the mortgage debacle that just went
thru the media has buyers questioning if they even can afford a
home. Rumors have already taken hold or I believe the buyers
would be out there scooping up some of these great deals I come across
every day. Buyers are now a little more sophisticated and
know that as long as their credit is good, there will probably be a
lender out there to help them.
"Meanwhile,
survey respondents said that only 4% of first-time home buyers were
worried about their credit scores in 1998, while 14% said it is more of
a concern today. “Owning a home is a
great investment that will provide tax breaks, financial gains - as
well as considerable joy over the years,” Gillespie
said. “First-time
home buyers now have higher standards, placing an
increased focus on the financial aspects of home ownership and at the
same time, want a larger home they can live in right away.”
Additional
key findings from the survey include: - 71% of brokers noted
that first-time home buyers are looking for larger homes than they were
10 years ago. - According to 41% of
the respondents, proximity
to job is the No. 1 attribute first-time home buyers are
looking for in a home. - 35% of the survey
respondents said “investment” is the No. 1 reason
first-time home buyers are making their purchase. - 46% of the survey
respondents reported that first-time home buyers look at five to ten homes,
on average, before making a purchase.
In
addition, the survey explored initial reasons that a first-time home
buyer contacts a Realtor in today’s market and
how that has shifted from 10 years ago, according to the Coldwell
Banker brokers: - They are ready but
want assistance in the process, including identifying neighborhoods,
negotiating of price and paperwork:
Today’s market 73% vs. 32% 10 years ago - Because that is what
they feel like they are supposed to do: Today’s
market 3% vs. 28% 10 years ago. - To view houses / do
walk-thrus: Today’s market 17% vs. 30% 10 years ago. - To help with
navigating mortgage issues: Today’s market 1% vs.
4% 10 years ago - They are not ready but
trying to better understand the process: Today’s
market 6% vs. 6% 10 years ago.
This is all fabulous information for us all to know, both buyers and
sellers and realtors alike. Sellers need to come around to
the market conditions
and understand that buyers do not want to pay top price for their house
and then turn around and have to remodel it. In fact, the
market suggests that no real work is wanted to be done by the
buyers.
So a market tip for sellers would be to do the work for the buyers for
a
faster sale. Price it right and show the buyer 'your' value
over the others (less work involved).
Thanks
for stopping by and reading my perspective and comments on this buyer
survey!
RISMEDIA 8/26/08 Lowe's ENewsletter dated 8/26/08
Methodology: Coldwell Banker Real Estate LLC conducted an
online survey about the trends real estate professionals are seeing
with first-time home buyers. The
survey yielded responses from 150
Coldwell Banker brokers across the United States.
Northwest Suburban Chicago Illinois real estate listings, sales, market comments and news for the surrounding Illinois communities of Bartlett, Hanover Park, Elgin, South Elgin, Streamwood, Carol Stream, Bloomingdale, Roselle, Medinah, Itasca, Elk Grove Village, Hoffman Estates, and Schaumburg.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
As I go thru my email today the
familiar Lowe’s real estate newsletter comes into
view. 
first-time home buyers. The
survey yielded responses from 150
Coldwell Banker brokers across the United States.
;)
;)
