The Profile of Today’s Home Buyer (Nationally)
Buying a primary or second home residence for home buyers is a huge financial decision but also an emotional decision that involves many lifestyle factors. For most home buyers, the purchase of a primary or second home residence is one of the largest financial transactions they will make. Buyers purchase a home not only for the desire to own a home of their own, but also because of changes in jobs, family situations, and the need for a smaller or larger living area. This not only rings true, nationally, but very much so in the Myrtle Beach Real Estate market.
This annual survey conducted by the NATIONAL ASSOCIATION OF REALTORS® of recent home buyers and sellers helps to gain insight into detailed information about their unique experience with this transaction, buying a home. The information provided supplies understanding, from the consumer level, of the trends that are transpiring. The survey covers information on demographics, housing characteristics and the experience of consumers in the housing market. Buyers and sellers also provide valuable information on the role that real estate professionals play in home sales transactions. Having the right real estate agent is key. You need to be making informed decisions about your home purchases and we have the tools to get you there. Matt Harper and Josh Knight are well versed in the Myrtle Beach Real Estate market and pride themselves on keeping up with what buyers and sellers in our area need.
In 2016, the share of first-time home buyers was 35 percent, a three-point increase over last year’s 32 percent. This figure gravitates back towards the historical norm at 40 percent of the market. The median household income of buyers increased again this year, likely due to a nationwide increase in home prices caused by a lack of housing inventory. Married and unmarried couples have double the buying power of single home buyers, and may be better able to meet the price increases of this housing market. We are also seeing trends of home prices rising in the Myrtle Beach area.
Tightened inventory is affecting the home search process of buyers. Due to suppressed inventory levels in many areas of the country, buyers are typically purchasing more expensive homes as prices increase. The number of weeks a buyer is searching for a home remained at 10 weeks. Buyers continue to report the most difficult task for them in the home buying process is simply finding the right home to purchase. We are fortunate in Myrtle Beach, SC to have a sustainable supply of real estate inventory. This is helping us maintain a great market for both buyers and sellers.
Tenure in the home has returned to a peak of 10 years again this year. Historically, tenure in the home has been six to seven years. Sellers may now have the equity and buyer demand to sell their home after stalling or delaying their home sale but may be facing reduced affordability to buy a new home. We are seeing these same trends here in our Myrtle Beach market as well.
Buyers need the help of a real estate professional to help them find the right home for them, negotiate terms of sale, and help with price negotiations. Sellers, as well, turn to professionals to help market their home to potential buyers, sell within a specific time frame, price their home competitively. This is what makes the Matt Harper Team stand out! For-sale-by-owner sales have dropped to the lowest level recorded in this data set at eight percent of sales again this year, while the use of the agent to sell the home stays at historic highs. Likewise, the buyer’s use of the agent is at historic highs as buyers purchasing directly from a previous owner or through a builder falls. Think about this, if you have someone on your team that has a vested interest in protecting you and making sure you get everything you can in purchasing a home, why wouldn’t you use a Realtor? After all, it doesn’t cost a buyer anything to have Realtor representation. Josh Knight is our buyers specialist, give him a call at 843-995-0276, we know you’ll be pleased with his professional service.
Another reason we love this report is that it provides us, as real estate professionals, with insights into the needs and expectations of our clients. What do consumers want when choosing a real estate professional? How do home buyers begin the process of searching for a home? Why do some sellers choose to forego the assistance of an agent? The answers to these questions, along with other findings in this report, will help us better understand the housing market and also provide the information necessary to address the needs of real estate consumers looking to move to or within the Myrtle Beach area.
Some of the highlights of the characteristics of these home buyers from 2016 are:
- First-time buyers made up 35 percent of all home buyers, an increase over last year’s near all-time low of 32 percent.
- The typical buyer was 44 years old again for the third straight year in a row, and the median household income for 2015 rose again this year to $88,500.
- Sixty-six percent of recent buyers were married couples, 17 percent were single females, seven percent were single males, and eight percent were unmarried couples.
- Eleven percent of home buyers purchased a multi-generational home, to take care of aging parents, for cost savings, and because of children over the age of 18 moving back home.
- Ninety percent of recent home buyers identified as heterosexual, three percent as gay or lesbian, one percent as bisexual, and seven percent preferred not to answer.
- Eighteen percent of recent home buyers are veterans and two percent are active-duty service members.
- At 31 percent, the primary reason for purchasing a home was the desire to own a home of their own.
Characteristics of Homes Purchased in 2016 are:
- Buyers of new homes made up 14 percent and buyers of previously owned homes made up 86 percent.
- Most recent buyers who purchased new homes were looking to avoid renovations and problems with plumbing or electricity at 34 percent. Buyers who purchased previously-owned homes were most often considering a better price at 32 percent.
- Detached single-family homes continue to be the most common home type for recent buyers at 83 percent, followed by seven percent of buyers choosing townhomes or condos.
- Senior-related housing stayed the same this year at 14 percent, with 20 percent of buyers typically purchasing condos and eight percent purchasing townhomes or condos.
- There was a median of 12 miles between the homes that recent buyers purchased and the homes that they moved from.
- Home prices increased slightly this year to a median of $227,700 among all buyers. Buyers typically purchased their homes for 98 percent of the asking price.
- The typical home that was recently purchased was 1,900 square feet, had three bedrooms and two bathrooms, and was built in 1991.
- Heating and cooling costs were the most important environmental features for recent home buyers, with 84 per-cent finding these features at least somewhat important.
- Overall, buyers expect to live in their homes for a median of 12 years, while 18 percent say that they are never moving
The Home Search Process in 2016:
- For 44 percent of recent buyers, the first step that they took in the home buying process was to look online at properties for sale, while 17 percent of buyers first contacted a real estate agent.
- Seventy-nine percent of recent buyers found their real estate agent to be a very useful information source. Online websites were seen as the most useful at 86 percent.
- Buyers typically searched for 10 weeks and looked at a median of 10 homes.
- The typical buyer who did not use the internet during their home search spent only four weeks searching and visited four homes, compared to those who did use the internet and searched for 10 weeks and visited 10 homes.
- Among buyers who used the internet during their home search, 89 percent of buyers found photos and 85 percent found detailed information about properties for sale very useful.
- Sixty percent of recent buyers were very satisfied with their recent home buying process, up from 59 percent a year ago
Home Buying and Real Estate Professionals in 2016:
- Eighty-eight percent of buyers recently purchased their home through a real estate agent or broker, and six percent purchased directly from a builder or builder’s agent.
- Having an agent to help them find the right home was what buyers wanted most when choosing an agent at 50 percent.
- Forty-two percent of buyers used an agent that was referred to them by a friend, neighbor, or relative and 11 percent used an agent that they had worked with in the past to buy or sell a home.
- Nearly seven in 10 buyers interviewed only one real estate agent during their home search.
- Eighty-eight percent of buyers would use their agent again or recommend their agent to others
Financing the Home Purchase in 2016:
- Eighty-eight percent of recent buyers financed their home purchase. Those who financed their home purchase typically financed 90 percent.
- First-time buyers who financed their home typically financed 96 percent of their home compared to repeat buyers at 84 percent.
- For 61 percent of buyers, the source of the down payment came from their savings. Thirty-five percent of buyers cited using the proceeds from the sale of a primary residence, which was the next most commonly reported way of securing a down payment.
- Forty percent of buyers saved for their down payment for six months or less.
- The most difficult step in the home buying process was saving for a down payment, as cited by 13 percent of respondents.
- Of buyers who said saving for a down payment was difficult, 49 percent of buyers reported that student loans made saving for a down payment difficult. Forty percent cited credit card debt, and 34 percent cited car loans as also making saving for a down payment difficult.
- Buyers continue to see purchasing a home as a good financial investment. Eighty-two percent reported they view a home purchase as a good investment.
We hope that providing you with this information on how today’s home buyers are thinking and working towards their goals of home ownership will assist you or give you the confidence to reach out to us and let us assist you in meeting all of your Myrtle Beach real estate goals. Our Listing Specialist is Matt Harper and can be reached at 843-267-7556 or our Buyers Specialist, Josh Knight can be reached at 843-995-0276.
We look forward to working with you!!
Note: All information in this Profile is characteristic of the 12-month period ending June 2016, with the exception of income data, which are reported for 2015. In some sections comparisons are also given for results obtained in previous surveys. Not all results are directly comparable due to changes in questionnaire design and sample size. Some results are presented for the four U.S. Census regions: Northeast, Midwest, South, and West. The median is the primary statistical measure used throughout this report. Due to rounding and omissions for space, percentage distributions may not add to 100 percent.
From the 2016 Investment and Vacation Home Buyer Survey, 65 percent of home buyers were primary residence buyers, which accounts for 3,738,000 homes sold in 2015. Using that calculation, the sample at the 95 percent confidence level has a confidence interval of plus-or-minus 1.32%.
Resource: National Association of Realtors