Short Analysis of Profile of Home Buyers and Sellers for Rochester MN
This is a short analysis of the National Association of Realtors® 2018 Profile of Home Buyers and Sellers. I love going over this report because it tells us so much about the trajectory of wants, needs, and behaviors of homebuyers and sellers on a national stage and though not everything here is going to be pertinent to the Rochester area real estate market it’s great to have a pulse on what is happening as a nation overall and what that could mean for the Rochester Area.
If you’d like a more localized opinion of the Rochester Area real estate market please fill out your information below and I’d be happy to get you more details and specifics.
Before I go over everything I first want to explain what exactly the National Association of Realtors® Annual Profile of Home buyers and Sellers is. According to the report the Profile of Home Buyers and Sellers survey has been the most trusted source in the industry for understanding consumer behaviors for nearly four decades now. The survey for 2018 contained 129 questions and is considered to be a nationally representative sample of recent home buyers and sellers.
Now this is a short analysis and it would take hours to go over the entire report so I want to point out that I am bringing attention to only some parts of the report and please understand that different people may find different things important and even have opposing opinions of what the results ultimately mean. So this is just what I decided to share and my personal analysis.
Alright lets’ dig in!
One of the first highlighted points are that the number of first time home buyers clocked in at 33% which is lower than the historical norm of 40%. Now I believe here in Rochester that this number could be closer to the historical norm if not higher but when I saw this I became curious as to what has been important for today’s shoppers and the report does give us some further information.
Of those buyers who said saving for the down payment was difficult 50 percent reported that it was student loans made up the largest hurdle with credit card debt at 37 percent and car loans at 35%. These are interesting though not altogether shocking statistics as student loan debt has becoming more and more of a factor resulting in both questions in national policy and the financial health of our younger generations. 40% of First Time Home Buyers reported having student loan debt.
56% said finding the right home to purchase was the most difficult step. The median number of houses a buyer looked at was 10. This next one is the biggest deal and why I believe Engagement Marketing is the new frontier in home sales. 95% of buyers are using the internet to search for homes with 76% of buyers saying they found their home through a mobile application which is an increase from 68% last year.
It’s clear from these results that digital technology has become one of the largest shifts in the industry. It is this reason why my efforts are so focused on meeting the consumer where they are shopping and to
provide the technology and education necessary for shopping, negotiating, and closing on their new homes.
For sellers the median length of time in their current home came in at 9 years with the median equity in their home sale at $55,000 which is up from $47,500 the year prior. With housing inventory continuing to decrease we are seeing prices increase in many areas of the county. Here in Rochester this is definitely a trend that we are seeing. 70% of sellers reported purchasing a home in the same state which isn’t altogether surprising when the median distance between from where they previously lived was only 20 miles. In the Midwest that number is between 15-17 miles.
In terms of sales price and time on the market final sales price was a median of 99% of the final listing price. This means if there was a reduction in price the median purchase price would be 99% of the listing price. For all sellers, time on market was a median of 3 weeks. In the Midwest that drops to 2 weeks. These are just medians and there are many variables that affect days on market. Generally the longer a home is on the market the lower the final purchase price of a home. For homes that were listed for 3-4 weeks, 41 percent reduced their asking price overall and 33% reduced only once.
One really interesting number is that 44% of all sellers offered incentives to attract buyers. These could be home warranties or offering an assistance with buyer’s closing costs. For homes that have been on the market over 17 weeks the number of incentives offered jumps to 52%.
This report is excellent for observing the national trends of where we are at today, where we’ve been, and can give us an opportunity to extrapolate as to where we are going. At the end of the day this is a national report though and therefore not specific to what is going on in the Rochester Area. If you’d like a more localized opinion of the Rochester Area real estate market please fill out your information below and I’d be happy to get you more details and specifics. This is Alex Mayer with Counselor Realty Buy and Sell Strategically.