- How different is our real estate market from the rest of the country? While it is a matter of record that the price of homes in the Hamptons is significantly higher than the national, I thought it would be interesting to take a look at some of the characteristics of home buying on a national level and allow real estate practitioners on the East End of Long Island to compare them to their local experiences.
The 2010 National Association of Realtors Profile of Home Buyers and Sellers was the source that I used for this subject. The NAR mailed an eight-page questionnaire in July 2010 to a national sample of 111,004 home buyers and sellers who purchased homes between July 2009 and June 2010, according to county records. It generated 8,449 usable responses. The report can be purchased on line at www.realtor.org/prodser.nsf/Research.
Among some of the points that I thought would be of interest to real estate professionals and consumers were the following:
Even with several years of price declines, the typical seller who purchased a home eight years ago experienced a median equity gain of $33,000, a 24 percent increase, while sellers who were in their homes for 11 to 15 years saw a median gain of 40 percent.
Housing flipping is virtually nonexistent in today's market. According to Vicki Cox Golder
, NAR President, and Tuscon Arizona Broker, "The primary exception is for experienced investors, many of whom pay cash and are making renovations or improvements after a careful study of properties, neighborhoods and market demand. The house flipping and quick gains which occurred during the boom period were abnormal, driven by risky, easy-money, financing that never should have been allowed in the market."
The number of first-time home buyers rose to a record 50 percent of all home sales, building on the success of the home buyer tax credit which began in 2009.
Fifty-eight percent of all buyers are married couples, 20 percent are single women, 12 percent single men, eight percent unmarried couples and one percent other.
Buyers searched a median 12 weeks and viewed 12 homes, 14 percent of buyers own two or more homes.
Sixty-four percent of sellers chose their agent based on a referral or had used the same agent in the past. Reputation was the most important factor in choosing an agent, cited by 35 percent of respondents, followed by trustworthiness at 23 percent; 84 percent of sellers are likely to use the same agent again or recommend to others.
The typical home sold for 96 percent of listing price.
Home buyers thought the most important services agents offer are helping find the right house, and negotiating sales terms and price. Buyers most commonly choose an agent on a referral from a friend, neighbor or relative, with trustworthiness and reputation being the most important factors.
Eighty-five percent of home buyers who used the internet to search for a home purchased through a real estate agent, while 70 percent of non-internet users were more likely to purchase directly from a builder or from a homeowner they already knew in a private transaction.
Environmentally friendly features remain a significant factor - 88 percent of buyers said heating and cooling costs were important, 71 percent desired energy efficient appliances, and 69 percent wanted energy efficient lighting.
For-sale-by-owners reached a record low. Factoring out private sales between parties who knew each other in advance such as family or acquaintances, the actual number of homes sold on the open market without professional assistance was a record low five percent.
The most difficult tasks reported by unrepresented sellers are getting the right price, preparing and fixing the home for sale, understanding and performing paperwork, and selling within the planned length of time.
John will be teaching a 22.5 hours Real Estate Continuing Education class at Long Island University in Riverhead on June 13, June 15, and June 17. For information and registration contact Rosemary Malone at 631-287-8334 or by email at firstname.lastname@example.org.
John is a St. John's University graduate, licensed Real Estate broker, lecturer, teaches real estate license classes at LIU and NYU, and acts as a consultant to the real estate industry.