Increased Reliance on Real Estate Professionals
In today’s real estate landscape, clients are increasingly seeking the expertise of real estate professionals. The National Association of REALTORS®’ 2023 Profile of Home Buyers and Sellers highlights a growing trend of clients depending on agents for various aspects of the buying and selling process. This reliance is evident in the rising percentage of buyers and sellers utilizing agents, which has grown from 86% to 89% in the last year. James Dwiggins, CEO of NextHome Inc., emphasizes the importance of real estate transactions in people’s lives, being both a significant financial commitment and a key factor in generational wealth in the U.S. He believes that the complexity and potential risks involved in these transactions make the guidance of a professional crucial.
Key Insights from the 2023 Profile of Home Buyers and Sellers
- Clients Seek Expertise in Various Areas: Buyers look to agents for help in finding the right home, understanding the buying process, identifying property features and faults, connecting with service providers, and negotiating sale terms. Sellers are also increasingly turning to agents, with only 7% opting for For Sale By Owner (FSBO) methods.
- Commission is Not a Primary Concern for Sellers: Only a small percentage of sellers consider the agent’s commission as a crucial factor in their choice of a professional. Instead, they value reputation, trustworthiness, and local knowledge more.
- Market Dominated by Higher-Income Buyers: There’s been a significant increase in the income of home buyers, reflecting the impact of rising home prices and mortgage rates on the affordability and demographics of potential buyers.
- First-Time Buyers Making a Comeback: The market share of first-time buyers has increased, although it remains below the historical norm. These buyers are entering the market with more financial resources and options.
- Largest Down Payments in Two Decades: Both first-time and repeat buyers are making larger down payments than seen in many years, with first-time buyers facing significant challenges in saving for these payments.
- Sellers Achieving Their Goals: In the current housing shortage, sellers often sell their properties at or above asking price, with a significant portion not needing to offer incentives to attract buyers.
- Rise in Single Buyer Homeownership: There’s a notable increase in single females and males buying homes, along with a decrease in buyers with children under 18.
- Popularity of Multigenerational Homes: A significant portion of buyers are purchasing homes to accommodate multiple generations, driven by various factors like caring for aging parents and economic benefits.
- Longer Homeownership Tenure: Both buyers and sellers are showing a tendency to stay in their homes longer, with sellers typically living in their homes for a decade.
- Diverse Buyer Demographics: The buyer pool is becoming more racially and ethnically diverse, with increases in minority buyers and those born outside the U.S.
- New Homes Attracting More Buyers: A slight increase in buyers opting for new homes is observed, mainly to avoid renovation issues associated with older properties.
- Reduced Distance in Moves: The median distance of moves has decreased, with fewer people moving across state lines and more selling for reasons like proximity to family and lifestyle changes.