Some findings from the latest 2011 NAR Profile of Home Buyers and Sellers
Palm Coast, FL – December 23, 2011 – In the previous article about some of the major findings from the latest NAR Profile of Home Buyers and Sellers, I discussed some the main differences in buyer characteristics compared to those reported in previous Profiles. For instance, there has been an increase in both buyer’s ages and household income, as well as an increase in the share of married buyers. Sellers, too, had some interesting trends develop on their side of the transaction. Taking a look back at the 2006 NAR Profile to compare, we see some clear changes have taken place in the selling market that are fueling the motivations of recent home sellers.
The 2011 Profile reveals that sellers tend to be older, with a median age of 53 years. That is up from the median of 46 years observed in 2006. Household income is also higher. In the 2011 Profile, the household income of the most recent sellers was $101,500, up nearly 20 percent from that reported in the 2006 Profile when the median income was just $83,300. Family composition among sellers has also changed. The share of married couple sellers rose from 72 percent in 2006 to 77 percent in 2011, while the share of single female sellers dropped from 17 percent to 13 percent over the same time period.
The reasons why sellers are selling have also changed drastically in the last five years. The top two reasons sellers sold their home in the latest profile were cited by similar shares of survey respondents. The motivation to sell the home in order to relocate for a job was of equal importance to the need to trade-up out of a home that was too small — both accounting for 17 percent of home sellers. Looking back five years ago, the number one reason sellers sold a home was because the home was too small, cited by 19 percent of sellers, while job relocation was barely on the radar (cited by just 9 percent of home sellers). Of course, in 2006, the survey results were not yet reflecting the tremendous job cuts that have plagued our nation for last several years. Currently, job mobility is at the top of the list of reasons why sellers move. Among home sellers aged 45 to 54, job relocation substantially outpaces all other reasons why sellers move, with 29 percent of home sellers in this age group moving for job-related reasons. Additionally, selling a home to avoid possible foreclosure has become a more frequent reason for home owners to sell their home, cited by less than one percent of sellers in 2006 but increasing to 8 percent of sellers in the 2011 Profile.
Another trend that has emerged since the housing market slowed is that home owners are staying in their homes longer than they have in the past. The typical tenure in the home is now nine years, up from six years in 2006. While nine years is the current median tenure in a home, sellers over the age of 45 remain in their homes upwards of 10 years. Sellers aged 65 to 74 typically sell after living in their home 14 years.
The good news for REALTORS® is that in this market, sellers are more wary of trying to sell their home on their own and are more likely to use the assistance of a real estate agent or broker. This is reflected in the 2011 Profile results, which show that the share of sellers using a real estate agent or broker to sell the home has increased to 87 percent in 2011 from 79 percent in 2001. The percentage of for-sale-by-owner (FSBO) sales has declined to near record lows, with only 10 percent of sellers choosing to go this route in 2011; in 40 percent of FSBO cases, the seller and the buyer previously knew each other.
Home selling trends have changed as we continue to deal with the ramifications of the Great Recession. Sellers are older and have higher incomes than they did previously. They have lived in their home longer and are taking their time before deciding to move. However, when they do move, their motivations for selling have changed. Sellers are increasingly likely to move because of a job relocation or because they are truly bursting at the seams in their current home. The best news for real estate professionals is that most home sellers are relying on real estate agents to help them sell their home.