FAR releases latest report on Florida home buyers and sellers

ORLANDO, Fla. – Jan. 6, 2009 – What did the typical Florida homebuyer look like in 2008? The answer lies within the pages of the 2008 Profile of Home Buyers and Sellers Florida Report released by FAR and compiled by NAR, which is now available at floridarealtors.org.

Because the real estate market evolves, it’s 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 Florida to help real estate professionals track the changing demands of consumers in a dynamic market.

Characteristics of home buyers

• The median age of home buyers was 43 years old. Among first-time buyers, the median age was 32.
• The median 2007 household income of home buyers in Florida was $68,500 compared to $74,900 among home buyers nationally.
• Sixty-seven percent of home buyers had no children under age 18 residing in the home.
• Fifty-eight percent of home buyers were married couples, 18 percent single females, 13 percent single males, and 9 percent were unmarried couples.
• Seventeen percent of home buyers reported they were born outside the United States, compared to 9 percent nationally.
• First-time home buyers accounted for 43 percent of recent home purchases.
• Forty-eight percent of first-time home buyers were between 25 and 34 years old.
• The median income of first-time home buyers was $58,400 compared to $60,600 among all first-time buyers nationally.
• Thirty 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 60 percent of first-time buyers.
• For the timing of the home purchase, 34 percent reported it was just the right time for them, 19 percent noted they had to purchase when they did, and 29 percent reported it was either due to improved affordability of homes or availability of homes for sale. Only 7 percent stated they wished they had waited to buy.
• Forty-six percent of home buyers reported using social networking Web sites, such as MySpace, Facebook, LinkedIn, and Friendster. Among home buyers aged 18 to 24, 85 percent reported using social networking sites, and 50 percent reported using them every day or nearly every day.

Characteristics of homes purchased

• New home purchases were 25 percent of recent home purchases.
• Seventy percent of homes purchased were detached single family homes.
• The typical home buyer purchased a home 15 miles from their previous residence.
• The median price of homes purchased was $207,000 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 1,570 square feet
• Commuting costs were considered as very or somewhat important by 79 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

• Twenty-nine percent of recent buyers reported that their first step in the home-buying process was looking online for properties for sale. Thirteen percent of first-time buyers and 19 percent of repeat buyers reported their first step was to contact a real estate agent.
• Eighty-four percent of home buyers used a real estate professional during their home search.
• Among home buyers, the typical Internet searcher was 41 years old and visited a median 12 homes. The typical home buyer who did not use the Internet to search for homes was 54 years old and saw a median 7 homes.
• Forty percent of home buyers first learned about the home they purchased from a real estate professional; 24 percent first learned about the home they purchased through the Internet.
• Real estate agents were viewed as a very useful information source by 79 percent of buyers, and as a somewhat useful information source by an additional 19 percent of buyers searching for a home.
• Six percent of buyers purchased a foreclosed home. 48 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

• Seventy-eight percent of home buyers purchased their home through a real estate agent or broker.
• Thirty-seven 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, 84 percent reported they were “very satisfied” with the honesty and integrity of their agent.
• Seventy-two percent of recent buyers will definitely use their agent again and 16 percent will probably use the agent again or recommend to others.

Financing the home purchase

• Eighty-eight percent of home buyers financed their home purchase; 95 percent of first-time home buyers financed the purchase of their home compared to 82 percent of repeat buyers.
• Savings was the chief source of the downpayment for 65 percent of first-time buyers.
• Forty-two percent of repeat buyers used proceeds from the sale of their primary residence toward the downpayment; 44 percent relied on savings for a portion of the downpayment.
• 48 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-seven percent of all buyers believe that their home purchase was a better financial investment than stocks, and an additional 30 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 52 years; they had a median income of $80,600.
• Sixty-nine percent of home sellers were married and 72 percent had no children under 18 years old living at home.
• Thirty-eight percent of sellers traded up to a larger home when purchasing their next home.
• The typical home seller owned their home for 6 years.
• The typical home was on the market for 12 weeks. Thirty-one percent of home sellers did not reduce their asking price before their home sold.
• Recent sellers typically sold their homes for 92 percent of the listing price.
• Forty-four percent of sellers offered incentives to attract buyers, most often assistance with closing costs and home warranty policies.
• Eighty-five percent of sellers used an agent or broker to sell their home.
• Forty-nine percent of all sellers were very satisfied with the selling process.

Home sellers and real estate professional

• Fifty-seven 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, 38 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.
• Nineteen percent of sellers used the same agent for their home purchase.
• For 23 percent of sellers, their most important expectation was that the real estate agent would help price home competitively; 24 percent reported that their most important expectation was that the agent help sell the home within a specific timeframe.
• Ninety percent of sellers reported their home was listed or advertised on the Internet.
• Seventy-nine percent of sellers used an agent that provided a broad range of services and managed most aspects of the sales transaction.
• Sixty-four percent of sellers reported they would definitely use the same real estate agent again.

For sale by owner sellers (FSBO)

• Twelve percent of sellers sold their home without the assistance of an agent compared with 13 percent of sellers nationally. Among all sellers, 5 percent were FSBO sellers who knew the buyer.
• Fifty-nine percent of FSBO sellers reported that they had some 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.

HOMEBUYER HELP

Organizations representing the rental side of the real estate market oppose homebuyer assistance. The National Multi Housing Council (NMHC) and the National Apartment Association (NAA) oppose a federally financed interest rate buy down on mortgages and support the existing ban on seller-financed downpayment programs

Up-and-coming neighborhoods: Great buying opportunities

ORLANDO, Fla. – Oct. 7, 2008 – Soho was once one. So were Tribeca; Venice, Calif.; and Philadelphia’s Old City. These former gritty neighborhoods once offered low-cost housing for artists.

Over time, these neighborhoods flourished, adding art galleries, coffee shops, hip little boutiques, and cool restaurants. Property values in turn increased to the point where many of the original artists found themselves priced out. Eventually the artists moved on in search of new bohemian blocks, but for the savvy home buyer, keeping an eye on where artists live can be a great way to get in early before a market takes off.

The reason is that artists are happy to move where real estate investors aren’t prepared to go – crime-ridden inner cities with trashed-out apartments, inside rat-infested buildings that seem destined for the wrecking ball.

Artists aren’t looking for the next hot neighborhood, just large, affordable spaces where they can grind, hammer, saw, and generally make a racket in the name of creativity. But they often set the stage for redevelopment, and home buyers who follow their lead can sometimes get in while real estate prices are affordable.

Urban areas in transition

Over time, the abandoned warehouses artists occupy become gorgeous lofts and studios, and gritty neighborhoods transform into trendy communities with an edge. That’s when the investors, developers, and wealthy buyers arrive, pushing up rents and displacing the artists who are then forced to set out for the next undesirable neighborhood. It’s a cycle that has repeated itself for decades, in cities across the nation.

“When artists go to a certain neighborhood, that’s a really strong sign for investors to come in,” said John Villani, author of Art Towns California, a book that will be published next month by The Countryman Press, a division of W.W. Norton. “They’re the ones who were there first and tend to be first to be pushed out also. It’s really kind of a discouraging cycle for a lot of artists. They feel used and manipulated by forces bigger than them.”

Artists turned around Soho and the Lower East Side of Manhattan in the 1960s, ‘70s, and ‘80s, and then Brooklyn’s Williamsburg in the 1990s. Now you’ll find them in Bushwick and Bedford-Stuyvesant in Brooklyn, and Astoria in Queens. Similar trends are occurring in Boston, Los Angeles, San Francisco, Philadelphia, Miami, and Austin, Tex. BusinessWeek.com selected 15 urban neighborhoods that artists have discovered and where homeowners could see returns in coming decades.

Of course, these transitional neighborhoods, such as Castleberry Hill in Atlanta, Wynwood in Miami, and Northeast Capitol Hill in Washington, aren’t for everybody. The neighborhoods typically aren’t known for their great public schools and are in early stages of gentrification.

“It depends on how tolerant people are of nontraditional lifestyles,” Villani said of transitional neighborhoods. “You have to have a capacity to overlook the presence of homeless people, to not be intimidated by street life. You need to have a sense of inner security that’s not going to be upset that life will be kind of chaotic at times.”

Downturn creates new opportunities

Andrew Cray, 36, began buying houses in Bushwick in 2003 after noticing that the neighborhood had great subway connections and was the next neighborhood over from Williamsburg, an artist enclave where home prices were increasingly expensive.

Cray bought a three-family house for $350,000, a property that today is worth about double as much. He now lives in Bushwick where he owns five houses, which he rents to artists and other young people with low-paying jobs who are often living in New York City for the first time. Crime has dropped dramatically and activity is buzzing around the Morgan Avenue subway stop, the closest stop to Manhattan on the L train. A natural foods store, a brick-oven pizza place, cafes, and art studios have popped up to serve the changing community.

The yuppies haven’t arrived yet, but they will, Cray said. “It’s becoming a beautiful place if you want a lot of space and have a young family and like the Soho-style loft living arrangement,” he said.

Cray says the real estate downturn has created new buying opportunities. Bushwick has an increasing number of foreclosures, which are rare in Manhattan and more gentrified Brooklyn communities.

Greg Esser, an artist who also rehabs spaces for artists in Phoenix, said Arizona’s real estate slowdown is welcome news for artists there. He said Phoenix artists have learned from the mistake they’ve made in the past of renting their space. More and more of them are buying houses and studios as a way to protect their investment and avoid the possibility of displacement.

Artists during the past decade have helped to revitalize downtown Phoenix, particularly Roosevelt Row and Grand Avenue, which are now lined with galleries.

“From my perspective the downturn creates new opportunities for artist ownership,” said Esser. “We were on a path of dramatically escalating real estate costs.”

Early adopters

The lack of affordable space is the main problem in many large cities. Young artists have been priced out of most neighborhoods in Washington, which doesn’t really have the kind of warehouse districts that artists tend to gravitate toward, said Anne Corbett, executive director of the Cultural Development Corp., which is working to develop affordable space for D.C. artists.

Some artists have moved to Baltimore, a much less expensive city with many warehouses that’s only about 45 minutes away. Others have moved to art-friendly suburbs such as Mount Rainier, Md., just outside the city.

Corbett said some artists have begun moving to the Atlas District, a mile north of Union Station, a neighborhood that developed a nightlife scene in recent years after decades of crime and blight.

“Artists send the signal,” said Corbett. “The artists are the early adopters. They do it in real estate the same way they do it in fashion, furniture design, and graphic design.”