BRIAN BUFFINI’S
REAL ESTATE REPORT 3RD QUARTER 2015
Twice a year, we produce Brian Buffini’s Real Estate Report to give you a snapshot of today’s market and to help you educate your clients on the process of buying or selling a home. I recommend that you lean into this piece when giving a presentation—use it to help set expectations and position yourself as your clients’ trusted advisor. I hope you enjoy this mid-year update and put it to use in your business. It’s a good life!
CONTENTS Industry Facts
PAGE 1
Mortgage Stats
PAGE 2
Distressed Properties
PAGE 3
Price Information
PAGE 3
Today’s Buyer
PAGE 4
First-Time Home Buyer Facts
PAGE 5
Seller Stats and Trends
PAGE 6
Consumer Confidence
PAGE 7
Buyers and the Internet
PAGE 8
Today’s Real Estate Professional
PAGE 9
Why I Work by Referral
© 2015 Buffini & Company. All rights reserved.
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Brian Buffini’s Real Estate Report
PAGE 1
INDUSTRY FACTS MEDIAN DAYS ON THE MARKET:
39 Days in April 2015
vs.
The home ownership rate is 64.3%.
48 Days in April 2014
Home sales in April reached a seasonally adjusted rate of 5.04 million, an increase of 6.1% from April 2014.
The total housing inventory at the end of April increased by 10%, resulting in 2.21 million existing homes available for sale.
46%
of homes sold in April were on the market for less than a month.
Existing home sales are 82% back to normal. New construction starts are 53% back to normal, up from 46% a year ago.
In the next 12 months, 40% of Americans say that the homes in their neighborhood will be worth more, 37% say they’ll remain the same, 15% aren’t sure and 8% say they’ll be worth less.
63%
63%
of Americans say they would buy if they were going to move today.
of Americans say that now is a good time to buy; 46% say that it’s a good time to sell.
TOP 10 STATES FOR NEW HOMES SALES IN 2014
EXISTING HOME SALES BY REGION:
7
Northeast:
Existing home sales declined 3.1% to an annual rate of 620,000. Low interest rates and the stability of the job market are moving buyers off the fence.
Midwest:
Existing home sales increased 1.7% to an annual rate of 1.22 million.
6
3 8
1
South:
2
Existing home sales declined 6.8% to an annual rate of 2.04 million.
West:
Existing home sales increased 1.7% in to an annual rate of 1.16 million.
5
9 4 10
1. Texas 2. Florida 3. California 4. North Carolina
5. Georgia 6. Colorado 7. Washington 8. Arizona
9. Virginia 10. South Carolina
Home sales in 2015 are expected to reach their highest level in two years. SOURCES: NATIONAL ASSOCIATION OF REALTORS®, NATIONAL ASSOCIATION OF HOME BUILDERS, TRULIA, BUILDER MAGAZINE, FANNIE MAE
Brian Buffini’s Real Estate Report
MORTGAGE STATS
12%
of buyers thought that saving for a down payment was difficult.
COMMON SAVINGS OBSTACLES:
48% Student loans. 44% Credit card debt.
Buyers typically financed 90% of their home purchase.
95%
of first-time buyers financed their home purchase, while 84% of repeat buyers did the same.
52%
52%
of Americans say that it cult to get diffi be ld wou a mortgage today, while 46% say it would be easy.
61% Conventional 22% FHA 12%
36% C ar loans. s of Americans say that mortgage rate ths. mon 12 t nex the will go up in
TYPE OF LOANS BUYERS CHOSE:
92%
AMONG REPEAT BUYERS:
of borrowers chose a fixed-rate mortgage.
26%
of buyers say that the mortgage application at and approval process were somewh d. ecte more difficult than exp
48% Conventional 35% FHA 9% VA AMONG FIRST-TIME BUYERS:
69% Conventional 15% FHA 13%
88%
of buyers financed their home purchase, including 97% of Gen Y.
44%
of Millennials think it will be difficult to qualify for a mortgage.
SOURCES: NATIONAL ASSOCIATION OF REALTORS®, FANNIE MAE, NATIONAL ASSOCIATION OF HOME BUILDERS
VA
VA
Top 3 Sources of Down Payments
1. Savings 2. Sale of a primary residence 3. Gift from family/friend
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Brian Buffini’s Real Estate Report
DISTRESSED PROPERTIES AVERAGE TIME ON MARKET: Short sales
180 days Non-distressed properties
38 days
The housing market is sounder than it has been in a decade: The number of homes in foreclosure each quarter is down to pre-crisis levels of 2005 and 2006.
Foreclosed properties
50 days
DISTRESSED PROPERTY AS PERCENTAGE OF ALL SALES:
10% April 2015 vs.
15% April 2014
Foreclosures sold for an average discount of 20% below market value in April 2015.
PRICE INFORMATION Home prices rose 8.9% on a 12-month seasonally adjusted basis in April 2015--the 38th consecutive month of yearover-year growth. The median existing home price for all housing types in April was $219,400, up 8.9% from April 2014.
46%
The median existing home price for single family homes was $221,200 in April 2015, up 10% from April 2014. The median existing condo price was $206,100 in April, up 0.4% from April 2014.
of Americans say that home prices will stay the same over the next 12 months. The median price of a new home was $297,300 in April 2015.
Experts predict that existing home prices will increase 3% in 2015 and 2% in 2016.
Although home prices are increasing, they’re doing so at the slowest pace in two years.
Home prices are 82% back to normal, up from 66% a year ago.
SOURCES: NATIONAL ASSOCIATION OF REALTORS®, BLOOMBERG, TRULIA, NATIONAL ASSOCIATION OF HOME BUILDERS, FANNIE MAE, U.S. CENSUS BUREAU
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Brian Buffini’s Real Estate Report
TODAY’S BUYER GENERATIONAL TRENDS:
32% 31%
of buyers are Gen Y. Baby Boomers.
27% 10%
Gen X.
Silent Generation.
Half of buyers begin their formal home search 6 to 12 months before buying; 3/4 start a year ahead.
The median household income of buyers was $84,500. Among first-time buyers, it was $68,300. Among repeat buyers, it was $95,000.
24% of home buyers bought due to a desire to own a home. 9% purchased a home due to a job-related relocation.
8 % purchased a home to be in a better area or due to a change in their family situation.
92%
of buyers used the Internet in some way during their home search, with 50% of buyers using a mobile website or application.
All generations looked online for properties first before contacting a real estate agent; however, the younger the buyer, the more likely they were to look online.
31%
of Gen Y and 26% of Gen X buyers found the home they purchased through their mobile device.
Buyers expect to live in their homes for 12 years.
Younger buyers are more likely to purchase an older or previously owned home, while Baby Boomers are more likely to buy a new home. Younger buyers prefer an agent to communicate via email and text, whereas older buyers prefer a phone call.
SOURCE: NATIONAL ASSOCIATION OF REALTORS®, THINK WITH GOOGLE
PAGE 4
The typical buyer searched for 10 weeks and viewed 10 homes during their search.
Brian Buffini’s Real Estate Report
FIRST-TIME HOME BUYER FACTS
30%
FIRST-TIME HOME BUYERS (BY REGION): of buyers in March 2015 were first-time buyers.
85%
68% of Gen Y are first-time home buyers.
of experts predict, the median age of first-time home buyers will rise to 32 or older in the next decade.
54% of first-time buyers were married. 18% were single females. 11% were single males. 15% were unmarried couples.
75%
rented an apartment or house before buying a home.
19%
lived with parents, relatives or friends.
The median age of first-time buyers in 2013 was 31. SOURCES: NATIONAL ASSOCIATION OF REALTORS®, ZILLOW
41% Northeast 36% Midwest
30% South 32% West
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Brian Buffini’s Real Estate Report
SELLER STATS & TRENDS Gen X comprised the largest
share–27%–of home sellers, followed by older Baby Boomers (23%) and younger Baby Boomers (20%).
16%
Younger sellers are more likely to sell to upgrade to a larger home or for a job relocation. Older sellers want to downsize in retirement or to be closer to friends and family.
of sellers wanted to sell their homes earlier but waited because their homes were worth less than the mortgage.
36%
of sellers offered incentives to attract buyers, including home warranty policies and closing costs.
SOURCES: NATIONAL ASSOCIATION OF REALTORS®
SELLERS UPGRADED:
40%
of sellers bought a home larger than their current one.
47%
purchased a more expensive home.
53%
purchased a newer home.
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45%
of sellers reduced the initial asking price at least once. Sellers lived in their homes for 10 years. This is up from 6 years in 2007. Sellers sold their homes for an average of 97% of the listing price.
Brian Buffini’s Real Estate Report
CONSUMER CONFIDENCE
51%
53%
of Americans plan to buy a home within the next 5 years, including 61% of Millennials, 28% of Gen X and 10% of Baby Boomers.
of buyers undertook a home improvement project within 3 months of buying, spending an average of $4,550 on improvement projects. The kitchen was the most common space to improve.
75% of Millennials say that homeownership is an important long-term goal.
73% of Millennials say that homeownership is an excellent investment.
REASONS RENTERS DON’T BUY:
56%
Insufficient savings or too much debt.
53%
Don’t earn enough.
41%
Credit isn’t good enough.
expect it to stay the same.
10%
expect it to get worse.
48% moved for housing-related reasons (foreclosure, wanted to move to a better neighborhood, wanted to buy a home, wanted a better home, etc.). 30.3% moved for family-related reasons (change in marital status, establish own household, etc.). 19.4% moved for employment-related reasons (retired, looking for work, to be closer to work, new job/transfer).
54%
of Americans say that home rental prices will increase in the next 12 months.
2.3% moved for other reasons (natural disaster, change of climate, health, attend or leave college, etc.).
38%
say they’ll stay the same.
3%
say they’ll go down.
of Americans expect their personal financial situation to get better over the next 12 months.
44%
11.7% of people moved between 2012 and 2013:
ARE RENTAL PRICES GOING UP?
FOR MOST AMERICANS, THEIR FINANCIAL SITUATIONS ARE STABLE:
45%
REASONS FOR MOVING:
62%
say that their household income is the same as it was 12 months ago.
24% 12%
SOURCES: BUILDER MAGAZINE, NATIONAL ASSOCIATION OF REALTORS®, NATIONAL ASSOCIATION OF HOME BUILDERS, U.S. CENSUS BUREAU, WALL STREET JOURNAL, FANNIE MAE
say that it’s significantly higher. say it’s significantly lower.
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Brian BrianBuffini’s Buffini’sReal RealEstate EstateReport Report
PAGE PAGE10 8
BUYERS AND THE INTERNET Google searches for real estate listings peak in July. This year, they reached their highest point since 2008.
Half of all Millennials visited real estate websites in July, 36% visited real estate websites or apps on mobile devices.
People who search for real estate listings are 5 times more likely to search about planning for retirement and 4 times more likely to search about finding child care.
18-34 year olds were twice as likely as 35-54 year olds to say that they’re planning to buy a home in the next year.
83%
of 18-34 year olds said that they would start their formal home search more than 6 months in advance, compared to 73% of people older than 35.
SOURCE: THINK WITH GOOGLE
PEOPLE USE THEIR MOBILE DEVICE TO: Search for listings.
Millennials are twice as likely as the average person to look at real estate information on a mobile device.
House hunters used their mobile device most to search for listings and find directions while out looking for a home.
Find directions to a home. Look for more information on a listing. Call or email an agent directly. Watch video tours while out looking for a home. One-quarter of Google searches for mortgages have been on mobile devices, with “mortgage calculator” making up half of the searches.
Brian Buffini’s Real Estate Report
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TODAY’S REAL ESTATE PROFESSIONAL The average real estate professional has 12 years of experience. agents have 65% ofa website. have a 12% ofrealagents estate blog. agents use social 65% ofmedia or a professional networking website.
84%
of real estate professionals are “very certain” they’ll be active in real estate in the next two years. THE MEDIAN NUMBER OF TRANSACTIONS BY EXPERIENCE:
2 years or less: 3 transactions. 3 to 5 years: 10 transactions. 6 to 15 years: 12 transactions.
AGENTS’ PREFERRED METHOD OF COMMUNICATION WITH: Current Clients
93% Email 91% Telephone 85% Text messaging
Past Clients
67% Email 57% Telephone 42% Text messaging
Potential Clients
63% Email 57% Telephone 41% Postal mail
16 years or more: 13 transactions. WHAT DO SELLERS WANT MOST FROM THEIR AGENTS?
23% Market home to potential buyers. 20% Sell the home within specific time frame. 19% Price home competitively. 14% Find a buyer for home. 13% Find ways to fix up home to sell it for more. WHAT DO BUYERS WANT MOST FROM THEIR AGENTS?
53% Find the right home to purchase. 12% Negotiate the terms of sale. 11% Handle the price negotiations. 8% Determine what comparable homes were selling for. 6% Handle the paperwork. SOURCES: NATIONAL ASSOCIATION OF REALTORS®, BUFFINI & COMPANY, RISMEDIA
Brian Buffini’s Real Estate Report
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WHY I WORK BY REFERRAL
82%
of Studies show that real estate sales are the result of agent contacts from previous clients, referrals, friends, family and personal clients.
88%
of buyers would use their agent again or refer them to others.
RELATIONSHIPS ARE MORE IMPORTANT THAN TRANSACTIONS. You may have noticed that many real estate agents take a transactional approach to sales—identifying clients, closing the deal, and then moving on to the next one. I choose not to work that way because I believe you deserve more from the professional you decide to work with. That’s why I work by referral. Since my primary source of new business is referrals from people who know and trust me, I don’t have to spend time prospecting and promoting myself. I can dedicate myself fully to the activities that benefit you most and always deliver truly exceptional service.
Working by referral is all about trust. And, let’s face it, when we’re seeking a service, we look for someone we can trust – someone proven, who comes highly recommended and is already on our side. YOU CONTROL MY BUSINESS. I know that I must earn your future referrals, so I aim to exceed your expectations. I have a vested interest in making sure that you are completely satisfied at the end of our transaction together. I want you to be so “fired-up” that you can’t wait to tell your friends and family about me and the fantastic service you received!
When you come across an opportunity, I’d appreciate you referring me to great people like yourself, who would benefit from the excellent service and personal attention I provide. SERVICE THAT CONTINUES AFTER THE SALE. “There is no lead more powerful than one referred from someone you know—someone who knows you, trusts you and will put their name to you.” —Brian Buffini
SOURCES: NATIONAL ASSOCIATION OF REALTORS®
I devote myself to serving the needs of my clients before, during and after each sale. Instead of disappearing after the closing, you can expect me to keep in touch. I will send you valuable information each month, and will also call from time to time just to check in and see if you need anything.