Consumers perceptions of the housing market more closely reflect reality in 2010. Half of homeowners (50%) believe the value of their homes declined in 2009; in fact, 65% of homes lost value, according to Zillow. On the other hand, 20% believed their homes increased in value, when, in actuality, 28% did.
Those in the West (63%) were more likely than average to believe their homes had lost value, though in fact 73% of homes in the West declined in value. Nearly two thirds of homes in the Midwest and South lost value (64% each), though only 49% of Southerners and 46% of Midwesterners believed their homes had lost value. Homeowners in the Northeast were the most realistic — 46% thought their homes had lost value, compared to 49% that did.
However, the perception persists that their home’s value will not be affected by the recession. In 2010, 22% of homeowners think that homes in their area will decline in value, but only 14% (or 63% of those who think home values will drop) think their own home will decline in value. In 2009, 47% thought that home values in their area would decline, and 30% thought their own home would be affected — which amounts to 63% of those who thought home values would decline.
Married couples accounted for 60% of homebuyers in 2009, single women 21%, single men 10%, and unmarried couples 8%, according to the National Association of Realtors. The average homebuyer searched for 12 weeks and viewed 12 homes. When they found a home, buyers made an average down payment of 8%. About one in seven (15%) did not put any money down, compared to 23% who put no money down in 2008.
The vast majority of buyers (87%) consider their home a good investment.
Homebuyers used a variety of services while searching for their home:
• 90% searched online;
• 87% used a real estate agent;
• 59% looked for yard signs;
• 49% attended open houses; and
• 40% looked at print or newspaper ads.
They are equally likely to have first learned about the home they eventually bought from a real estate agent (36%) as from an online source (36%).
When Americans move, they do not move far — the median distance from their old home to the home they purchased is 12 miles. That is likely because transportation costs figure into the decision process of 42% of homebuyers, and commuting distance to work is a factor for 36%.
First-Time Homebuyers
First time homebuyers accounted for 47% of those who bought homes in 2009, the highest proportion on record. The average first-time homebuyer was 30 years old and had a median income of $61,600. They plan to stay in their homes for an average of 10 years.
The homes they purchased were an average of 1,600 square feet and had an average price tag of $156,000. A majority (55%) financed their home with a Federal Housing Administration (FHA) loan, and 8% used a Veterans Affairs (VA) loan.
More than six in 10 of those who made a down payment (61%) used their savings, 22% received a gift from a friend or relative, 6% each used a loan from a friend or relative, took money from their retirement savings, and sold stocks or bonds.
In order to afford their homes, 39% of first time homebuyers cut spending on luxury goods, 38% cut back on entertainment, and 30% cut back on clothes purchases.
Repeat Homebuyers
By comparison, repeat home buyers:
• Are older (average age of 48);
• Have higher incomes (average income of $88,100);
• Spend more on their home (average purchase price of $224,500) and buy bigger homes (average of 2,100 square feet); and
• Plan to stay in their home longer (average of 12 years).
Home Sellers
Typical home sellers had lived in their home for seven years, up from six years in 2009. Nearly half chose to buy larger home (48%), 30% bought a home about the same size, and 22% downsized.
More than four in 10 (42%) offered incentives to attract buyers, such as home warranties or assistance with closing costs.
On average, homes sold for 95% of the asking price. [Homes/Housing, Consumer Spending & Attitudes]
Sources: “Q4 Homeowner Confidence Survey,” Zillow, Katie Curnutte, 999 Third Ave., #4600, Seattle WA 98104; 206-757-2785; www.zillow.com. Price: Available online at no charge.
“2009 Profile Of Home Buyers And Sellers,” National Association Of Realtors, Walter Molony, 500 New Jersey Ave., NW, Washington, DC 20001; 202-383-1177; wmolony@realtors.org; www.realtor.org. Price: Free to NAR members, $125 for non-members.
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