2008 Profile of Home Buyers and Sellers Pennsylvania Report Highlights

The real estate market offers a variety of choices, opportunities and challenges for home buyers, sellers, and real estate professionals helping them with their transactions. For home buyers, there are numerous ways to search for and find a home, a variety of mortgage products to finance their home and a growing list of services that their agent can provide to assist them in the process. Home sellers can choose to sell their home themselves or enlist the professional assistance of an agent who can provide various levels of service to best suit each home seller‟s needs. Because the real estate market is always evolving, it is important for real estate professionals to have a clear picture of today‟s home buyers and sellers. The 2008 Profile of Home Buyers and Sellers describes the characteristics and motivations of recent home buyers and sellers in Pennsylvania and in so doing helps real estate professionals track the changing demands of consumers in a dynamic market.

CHARACTERISTICS OF HOME BUYERS

The median age of home buyers was 38 years old. Among first-time buyers, the median age was 29.

The median 2007 household income of home buyers in Pennsylvania was $71,700 compared to $74,900 among home buyers nationally.

Sixty-six percent of home buyers had no children under age 18 residing in the home.

Fifty-nine percent of home buyers were married couples, 18 percent single females, 11 percent single males, and 9 percent were unmarried couples.

Six percent of home buyers reported they were born outside the United States, compared to 9 percent nationally.

First-time home buyers accounted for 46 percent of recent home purchases.

Fifty-seven percent of first-time home buyers were between 25 and 34 years old.

The median income of first-time home buyers was $63,000 compared to $60,600 among all first-time buyers nationally.

Ten percent of first-time buyers identified their race or ethnicity as non-white.

The primary reason for the recent home purchase was a desire to own a home for 68 percent of first-time buyers.

For the timing of the home purchase, 50 percent reported it was just the right time for them, 18 percent noted they had to purchase when they did, and 20 percent reported it was either due to improved affordability of homes or availability of homes for sale. Only 2 percent stated they wished they had waited to buy.

Forty-three percent of home buyers reported using social networking Web sites, such as MySpace, Facebook, LinkedIn, and Friendster. Among home buyers aged 18 to 24, 79 percent reported using social networking sites, and 46 percent reported using them every day or nearly every day.

CHARACTERISTICS OF HOMES PURCHASED

New home purchases were 9 percent of recent home purchases.

Sixty-two percent of homes purchased were detached single family homes.

The typical home buyer purchased a home 10 miles from their previous residence.
The median price of homes purchased was $195,000 compared to $204,000 in the U.S.

The typical buyer purchased a home that was 1.760 square feet in size. The median size of home purchased by first-time buyers was 1.530 square feet.

Commuting costs were considered as very or somewhat important by 84 percent of buyers when considering which home to purchase.

Recent home buyers plan to live in their home a median of 10 years.

THE HOME SEARCH PROCESS

Thirty-seven percent of recent buyers reported that their first step in the home-buying process was looking online for properties for sale. Nine percent of first-time buyers and 21 percent of repeat buyers reported their first step was to contact a real estate agent.

Eighty-nine percent of home buyers used the Internet to search for homes.

The typical home buyer searched for a home for a median 12 weeks and saw a median 10 homes.

Ninety percent of home buyers used a real estate professional during their home search.

Among home buyers, the typical Internet searcher was 36 years old and visited a median 10 homes. The typical home buyer who did not use the Internet to search for homes was 54 years old and saw a median 6 homes.

Thirty-five percent of home buyers first learned about the home they purchased from a real estate professional; 39 percent first learned about the home they purchased through the Internet.

Real estate agents were viewed as a very useful information source by 81 percent of buyers, and as a somewhat useful information source by an additional 16 percent of buyers searching for a home.

Three percent of buyers purchased a foreclosed home. 32 percent considered buying a home in foreclosure, but either could not find the right home, or found the purchase process to be too difficult or complex.

HOME BUYING AND REAL ESTATE PROFESSIONALS

Eighty-eight percent of home buyers purchased their home through a real estate agent or broker.

Fifty percent of first-time buyers were referred to their agent by a friend, family member, neighbor or relative.

Ninety-seven percent of buyers ranked honesty and integrity as a "very important" factor when choosing a real estate professional to assist with a home purchase.

When asked about their agent‟s performance on those qualities considered important, 85 percent reported they were "very satisfied" with the honesty and integrity of their agent.

Seventy percent of recent buyers will definitely use their agent again and 17 percent will probably use the agent again or recommend to others.

FINANCING THE HOME PURCHASE

Ninety-four percent of home buyers financed their home purchase; 98 percent of first-time home buyers financed the purchase of their home compared to 90 percent of repeat buyers.

Savings was the chief source of the downpayment for 81 percent of first-time buyers.

Fifty-two percent of repeat buyers used proceeds from the sale of their primary residence toward the downpayment; 46 percent relied on savings for a portion of the downpayment.

49 percent of home buyers reported they have made some sacrifices to be able to make their home purchase, such as reducing spending on luxury items, entertainment or clothing.

Forty-five percent of all buyers believe that their home purchase was a better financial investment than stocks, and an additional 31 percent of buyers feel their home purchase was at least as good an investment as stocks.

HOME SELLERS AND THEIR SELLING EXPERIENCE

The median age of home sellers was 47 years; they had a median income of $86,400.

Seventy-seven percent of home sellers were married and 60 percent had no children under 18 years old living at home.

Fifty-eight percent of sellers traded up to a larger home when purchasing their next home.

The typical home seller owned their home for 8 years.

The typical home was on the market for 8 weeks. Forty-eight percent of home sellers not reduce their asking price before their home sold.

Recent sellers typically sold their homes for 97 percent of the listing price.

Fifty-six percent of sellers offered incentives to attract buyers, most often assistance with closing costs and home warranty policies.

Eighty-nine percent of sellers used an agent or broker to sell their home.

Fifty-two percent of all sellers were very satisfied with the selling process.

HOME SELLERS AND REAL ESTATE PROFESSIONAL

Seventy-one percent of sellers contacted only one agent before selecting one to help assist in the sale of their home.

When selecting a real estate professional, 40 percent of sellers received a recommendation from a friend, neighbor or relative.

The reputation of the agent was the most important factor when choosing a real estate professional for 34 percent of recent sellers.

Fifty-seven percent of sellers used the same agent for their home purchase.
For 22 percent of sellers, their most important expectation was that the real estate agent will help price home competitively. 18 percent of reported their most important expectation was that the agent will help sell the home within a specific timeframe.

Ninety-six percent of sellers reported their home was listed or advertised on the Internet.

Seventy-five percent of sellers used an agent that provided a broad range of services and managed most aspects of the sales transaction.

Fifty-seven percent of sellers reported they would definitely use the same real estate agent again.

FOR SALE BY OWNER SELLERS (FSBO)

Nine percent of sellers sold their home without the assistance of an agent compared to 13 percent of sellers nationally. Among all sellers, 4 percent were FSBO sellers who knew the buyer.

Sixty-nine percent of FSBO sellers reported that they had difficulty in selling their home themselves, in performing tasks such as understanding and performing the necessary paperwork to complete the transaction, preparing the home for sale, and getting the price right.

1/09 National Association of Realtors