INTERESTING INFO ON WHO IS BUYING AND HOW THE HOUSING MARKET HEALS FROM THE BOTTOM UP

By
Real Estate Broker/Owner with St.Cloud Homes

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.

 Want to know more about how to Marketing works?

Posted by

St.Cloud Homes

Allison Stewart Broker, SFR, CDPE 

407-616-9904www.kissimmee-stcloudflhomes.com

                                                                                                       

    St. Cloud Homes YOUR Local Real Estate Experts serving Home Buyers/Sellers in Kissimee, St. Cloud Fl, Harmony, Lake Nona, Anthem Park, Bay Lake Ranch, Lake Lizzie, Reunion, Celebration, Lakepointe, Steven Plantation, Acadia Estates, East Lake, Windermere, Bay Hill. Our unparalleled service begins with YOU.

   For a free consultation call us 407-616-9904 or visit our website or  email us

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Re-Blogged 14 times:

Re-Blogged By Re-Blogged At
  1. Dana Devine 11/17/2009 11:29 PM
  2. Lina Robertson 11/17/2009 11:46 PM
  3. Yvonne Jaramillo Ahearn, Esq. (B) 11/18/2009 12:07 AM
  4. Cheryl Ritchie 11/18/2009 01:02 PM
  5. Dave Brose 11/19/2009 12:23 AM
  6. Lisa Oden 11/19/2009 12:36 AM
  7. Mark Rienzie 11/19/2009 12:57 AM
  8. Inez Meehan 11/19/2009 01:37 AM
  9. Troy Real Estate Group 11/19/2009 01:38 AM
  10. Tammie White, Broker 11/19/2009 01:50 AM
  11. Gene perez 11/19/2009 02:52 AM
  12. Connie Webb 11/19/2009 03:13 AM
  13. Marian Pierre-Louis 11/19/2009 11:32 AM
  14. Andretta Robinson 11/19/2009 11:45 AM
  15. Trisha P Realty Group 11/21/2009 01:48 PM
  16. Ceci Burklow 11/23/2009 06:27 AM
  17. Ceci Burklow 11/23/2009 06:27 AM
  18. Ceci Burklow 11/23/2009 06:28 AM
Location:
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Show All Comments
Rainmaker
1,431,803
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

Good information.  Too many first time buyers are being squeezed out in this area by investors.  We have a very limited inventory.

Nov 19, 2009 03:23 AM #56
Rainmaker
71,220
Shelly Whitworth
MorSystems.com - Carmel, CA

Real numbers! Thank-you Allison.

"And a staggering 80% of first time home buyers are using the Internet."

YES it's up from 75% just a couple years ago, and that's where I come in

www.MorSystems.com

Nov 19, 2009 03:53 AM #58
Rainer
36,368
Steve Andrascik
Lake Mead Area Realty - Boulder City, NV

Thanks, Allison, interesting information.

Boulder City Steve

Nov 19, 2009 04:44 AM #59
Rainmaker
135,324
Jackie Cross
Real Living All Florida Realty - Port St Lucie, FL

Wow that is a lot of statistical numbers.

When the prices are down so low many FSBO drop out of the market.  It is not just the high inventory that they are fighting, it's the inability to price as low.

Nov 19, 2009 04:53 AM #60
Rainer
81,932
Ralph Vargas
EXIT Realty Redefined - Palos Park, IL

Great article, you showed some real concrete numbers. I wish I had some solid numbers to back up this disagreement with Paul Bishop: "free existing owners to make a trade" The problem I see is that there are far fewer existing owners that have sold with so much REO`s, shorts and foreclosures glutting the market... that is were the first time buyers bought, in vacant homes without a move up seller. I hope with the additional tax credit (6500$) we can see stronger movement in the $500k-$2mm range and get this housing market stabilized.

Nov 19, 2009 05:26 AM #61
Rainmaker
571,868
Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Hi Allison, Thanks for an excellent review of the market.  Interesting stats on cash buyers, fsbo's and full service offices.

Nov 19, 2009 06:07 AM #62
Rainer
225,378
Kirsten Lindquist
Pacific Union International - Sonoma, CA
Realtor - Sonoma Wine Country

Fascinating information on this market segment.  Sonoma is home to much older folks....many retirees....not so many first time buyers.  Our market is pretty slow right now and your stats explain why.

Thanks for the good work.

Nov 19, 2009 06:48 AM #63
Rainmaker
244,173
Alan Grizzle
Chestatee Real Estate - Dahlonega, GA
Full Time Realtor, Lifelong Resident of Dahlonega

Glad to see that most used a full service broker. With all the hidden cost Realtors have I do not see how they afford to stay in business. Realtors like any other business that provides a service or a product must make a profit to stay in business and provide for there family.

Nov 19, 2009 09:30 AM #64
Rainmaker
453,716
Allison Stewart
St.Cloud Homes - Saint Cloud, FL
St. Cloud Fl Realtor, Osceola County Real Estate 407-616-9904

WOW this was re-blogged 12 times.  THANK YOU.

If we better understand who is buying, how they are buying, we can market to them more precisely.

Nov 19, 2009 09:46 AM #65
Ambassador
2,011,382
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

It's amazing to me how many FHA loans are currently happening.  For years, the limits were so low, that almost nobody used them.

Nov 19, 2009 10:11 AM #66
Ambassador
1,557,292
Karen Fiddler, Broker/Owner
Karen Parsons-Fiddler, Broker 949-510-2395 - Mission Viejo, CA
Orange County & Lake Arrowhead, CA (949)510-2395

FHA has been a great thing for our market...trickly up in housing, trickle down with tax breaks and we'd be set.

Nov 19, 2009 10:15 AM #67
Rainer
123,350
Marian Pierre-Louis
Fieldstone Historic Research - Medway, MA
Metrowest Boston

I agree completely that we are experiencing a bottom up recovery.  But I think we are going to see more hits to the high end market before it's all over.

Nov 19, 2009 11:31 AM #68
Rainer
222,458
Jirius Isaac
Isaac Real Estate &TriStar Mortgage - Kenmore, WA
Real Estate & loans in Kenmore, WA

It is always good to have numbers in your head when you are talking to prospective clients in case you need to refer to them.

Nov 19, 2009 11:34 AM #69
Rainer
123,815
Nicholas Caron
Caron's Gateway Real Estate - Derry, NH

Alison,

Good points and good insight.   I believed the tax credit was right in targeting first time home buyers who would help eliminate the built up inventory.   The Internet is the way to go to reach today's buyers.

Nov 19, 2009 01:34 PM #70
Rainer
8,393
Denise Montalvo
Bradley Real Estate - San Anselmo, CA
Realtor on the Move – Keeping Pace with the Market

Allison, it seems to be a good thing that buyers are actually coming up with down payments. Unfortunately, lending is very stringent now as a result of the 0% down payments of recent years. FSBOs seem particularly hard to sell in rural or semi-rural areas where few people can easily see the property as they drive around.

Nov 19, 2009 01:35 PM #71
Rainer
80,232
Amy Law
Alliance Properties - Crosby, TX

The data in this post is very interesting. Thank you for stating it in an easy to understand manner.

Nov 19, 2009 02:05 PM #72
Rainmaker
131,817
Mike Henderson
Your complete source for buying HUD homes - Littleton, CO
HUD Home Hub - 303-949-5848

Absolutely this is the way the market corrects.  In Denver, CO the lower price inventory is going like hotcakes and prices are rising.

Nov 19, 2009 03:41 PM #73
Rainmaker
334,102
Ty Lacroix
Envelope Real Estate Brokerage Inc - London, ON

Allison

It all looks promising for 2010 and for those who market well

Ty

Nov 19, 2009 11:51 PM #74
Rainer
217,180
Mike Warfel
Mike & Rita Warfel Real Estate LLC - Avoca, MI
Associate Broker

Prices are at a all time low and interest rates are low, economy is uncertain making housing one of the safest havens, that is an easy package for professional Realtors to sell to buyers tired of the restless renters living accommodations. Realtors could of turned the housing market around without the interference of the government with a feel good give away taxpayer money for asking plan.

I am glad you gave me an opportunity to answer, good post.

Thank You

Nov 22, 2009 12:14 PM #75
Rainer
217,180
Mike Warfel
Mike & Rita Warfel Real Estate LLC - Avoca, MI
Associate Broker

Prices are at a all time low and interest rates are low, economy is uncertain making housing one of the safest havens, that is an easy package for professional Realtors to sell to buyers tired of the restless renters living accommodations. Realtors could of turned the housing market around without the interference of the government with a feel good give away taxpayer money for asking plan.

I am glad you gave me an opportunity to answer, good post.

Thank You

Nov 22, 2009 12:14 PM #76
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Rainmaker
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Allison Stewart

St. Cloud Fl Realtor, Osceola County Real Estate 407-616-9904
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