Are you thinking about selling your home in 2018? If so, the market has shifted dramatically over the past several years. It is totally different than it was years ago. Today’s buyers are not apt to want to spend a lot to time and money to fix up and or rehab a house as they were in the past. Why? Because today’s home buyers are more in debt and are more time challenged than years ago. They are looking at things from a return on their investment of time and money. Today’s buyers are looking for homes that are in move-in condition. For today’s sellers this is important to understand. If a sellers home is not updated and in move in condition, then it needs to be priced commensurate with the upgrades that will be needed from a buyer perspective. In other words, the listed home selling price must be discounted to reflect the amount of time and money a home buyer will need to put into the house and also factor in that today’s buyers simply do not want to do the work that may be needed. Properly pricing a home to meet today’s buyer needs are desires is one of the most important considerations that a home seller should consider.
With this said, with the help of our friends at the National Association of Realtors, we’d like to share with you important profiles of today’s buyers. We are sharing this information with you with a keen eye on looking at things from various generational buyers perspective.
This is part of an on-going series of real estate articles by Nick Santoro and Joe Santoro of Personal Property Managers who service Pennsylvania and New Jersey and specialize in real estate, home content downsizing, senior transition services, property management and estate sales.
Home Buyer Profiles for 2018:
• The millennial generation is defined as those who are 36 years old and younger.
• Generation X is 37 to 51
• Younger Boomers are 52 to 61.
• Older Boomers are 62 to 70
• the Silent Generation are aged 71 to 91.
Buyers 36 years old and younger made up the largest generation of homebuyers in 2016 at 34%.
Millennial buyers (age 36 years and younger) represent 66% or 2/3 of today’s buyers and were first-time buyers. Over one quarter or 28% of today’s buyers were Gen X buyers (age 37 to 51). So, 92% of today’s buyers were Millennials or Gen X’ers….
In 2016, the majority of recent homebuyers were married couples, and buyers 37 to 51 had the highest median household income at $106,600
Buyers 37 to 51 (Gen Xers), consists of 28% of recent homebuyers. They are consistent with their buying trends and demographics. Notably, they are also the most racially and ethnically diverse population of homebuyers, with 21% identifying they are a race other than White/Caucasian. Buyers 37 to 51 are in their peak earning years and thus their incomes are the highest among all generations of buyer types at $106,600. They are both the generation most likely to be married and most likely to have children under the age of 18 in their home. Their housing preferences are driven by these demographics. Buyers 37 to 51 have the highest median priced homes of all other buyers and buy the largest homes in median square footage and bedrooms. Their neighborhood choices are driven by their convenience to job, but also the quality and convenience of school districts.
Buyers 52 to 61 (Younger Baby Boomers) and buyers 62 to 70 (Older Baby Boomers) were broken into two separate categories as they have differing demographics and buying behaviors. Buyers 52 to 61 consist of 16% of recent buyers and buyers 62 to 70 consist of 14% of recent buyers. Buyers 52 to 61 have higher median household incomes and are more likely to have children under the age of 18 in their home. Buyers 52 to 61 are also more likely to buy a multi-generational home. As the sandwich generation, they are nearly equally likely to buy this type of home for both children over 18 living at home and caretaking for aging parents. Buyers 52 to 61 buy for an array of reasons such as a job-relocation, desire for a smaller home, and the desire to be closer to friends and family. Buyers 52 to 61 also project the length of time they will live in their home is the longest at 20 years. Buyers 62 to 70 are often moving due to retirement, desire to be closer to friends and family, and desire for a smaller home. Buyers 62 to 70 typically move the longest distance at a median of 25 miles and are least likely to make compromises on their home purchase.
Characteristics of Homes Purchased
Buyers of new homes made up 14% and buyers of previously owned homes made up 86%. For buyers 36 years and younger, 11% bought new homes again this year. New home purchased increased with age, 15% for buyers 37 to 51 years and 21% for those 71 to 91 years.
Most recent buyers who purchased new homes were looking to avoid renovations and problems with plumbing or electricity at 34%. Buyers who purchased previously owned homes were most often considering a better price at 32%. For buyers 36 years and younger, 48% bought new homes to avoid renovations and problems compared to 18% of buyers 71 years and older. 35% of buyers 62 to 70 years bought previously owned homes to receive a better overall value.
The most common type of home purchased continues to be the detached single-family home, which made up 83% of all homes purchased compared to 87% of buyers 37 to 51 years and only 65% for buyers 71 years and older.
Senior-related housing increased slightly this year to 14% of buyers over the age of 50; that number was 7% for buyers 52 to 61 years and 24% for buyers 71 years and older.
The typical home that was recently purchased was 1,900 square feet, had three bedrooms and two bathrooms, and was built in 1991. The size of homes purchased by buyers aged 37 to 51 years old was typically larger homes at 2,100 square feet, compared to buyers 36 years and younger, and for buyers aged 71 years and older, they purchased homes at a median of 1,800 square feet. For buyers 36 years and younger, the median home that was purchased was built in 1984; for ages 62 to 70, the median home that was purchased was built in 1998. For homebuyers over 71, the median home that was purchased was built in 1999.
Heating and cooling costs were the most important environmental features for recent home buyers, with 84% finding these features at least somewhat important.
For buyers 36 years and younger, commuting costs were more important that heating and cooling costs at 39% and 31% respectively. Compared to buyers 62 years through 70, commuting costs was listed as very important to only 12% whereas heating a cooling accounted for 34%.
Overall, buyers expect to live in their homes for a median of 12 years, while 18% say that they are never moving. For buyers 36 years and younger, the expected length of time is only 10 years compare to 20 years for buyers 52 to 61 years.
At Personal Property Managers, we use all this information and all these statistics to help our seller clients understand today’s market and whom they are marketing to, along with the taste that today’s buyers desire.
A cluttered home will have a negative appeal and will turn off today’s buyers.
A home that has not been updated or has dark colors, wallpaper, older kitchens and bathrooms will be a turn off to a whopping 92% of today’s buyers. This is very important to understand. Today’s sellers need to factor this into the selling price and adjust it accordingly.
The good news is that at Personal Property Managers, one call does it all. We can help with selling a home. Downsizing and de-cluttering it. Liquidating its contents and getting it market ready for sale. We have a strong following of interested buyers and can help our clients in many different home buying and selling avenues.
For more information on real estate or home downsizing please contact Nick Santoro or Joe Santoro of Personal Property Managers at 215-485-9272 or 908-368-1909. Personal Property Managers specializes in helping home owners transition from their home of many years into a new community. Personal Property Managers services Pennsylvania and New Jersey and offers downsizing services, estate sales services, home staging, discount full service real estate services via its association with EveryHome Realty. Learn more about Personal Property Managers from our recent News Stories.