Jan 6, 2011
The 2010 NAR Profile of Buyers and Sellers shows that buyers and sellers are optimistic about the future real estate market. According to this recent nation survey, home buyers are taking a more long-term view of home ownership, as compared to the phenomenon of rapid home turn over in the past several years. Most home sellers are reporting positive returns (over what they initially paid) when selling their homes. And the vast majority of homeowners still believe their homes are good investments.
On average, 2010 sellers reported that they owned their home for eight years before putting it up for sale, versus an average of seven years of ownership reported in 2009. First-time buyers said they plan to stay in the home they've purchased for at least 10 years. Repeat buyers (non first-timers) planned to hold their new property for at least 15 years.
Also, 2010 sellers who purchased their property eight years ago averaged a gain of 24%. Sellers who owned their home for 10 to 15 years had an average gain of 40%.
Not surprisingly, the report showed that sellers who purchased at the height of the housing market (about 3 to 4 years ago) and had to sell, were hurt by recent price drops. House flipping has virtually disappeared in today's market which is a dramatic drop from three years ago when 30% of sellers had owned their property for fewer than three years.
This explains why the average price of homes sold is lower than in year's past. In 2010, the typical first-time buyer spent $152,000 on a 1,540 square foot house. The median age of first-time buyers was 30 and the median income $59,900. The average 2010 buyer searched for a home for 12 weeks and looked at 12 homes before purchasing.
In 2010, the median age of home sellers was 49 with an average income of $90,000. Most sellers stayed nearby and moved an average distance of 18 miles. About half of the sellers moved up in home size, 21% moved down in size and 28% bought a comparatively sized home.
Since consumers have postponed purchases, especially for housing and durable goods, businesses have delayed capital spending and cut inventories. Once the economy and demand picks up, business and consumer spending can increase rapidly. I look for signs in consumer confidence to tell us how quickly that will happen. [where: 75230]