Every year, the National Association of REALTORS® (NAR) releases their profile of buyers and sellers. Because of the unique circumstances of 2020, this year’s results are a bit different from previous ones. While these changes may only reflect one year of change, they will likely be influential in the years to come, as the shift in circumstances has changed many aspects of buying and selling.
Overall, the majority of buyers and sellers still chose to work through a real estate agent. A main change is the major uptick in technology used in the buying and selling process, especially due to COVID-19 shutdowns. Here are the major trends revealed in the 2020 NAR report.
This past year, the average buyer was in their late 40s, and the median household income was $96,500. The number of first-time buyers dipped slightly, dropping from 33% to 31%. Of all homebuyers, 12% made the decision to move into a multi-generational home, with the intention of saving money, having children move back home or to take care of aging family members. However, those buyers who purchased a home after the effects of COVID-19 were more likely to move into a multi-generational home than those who started their search before March. In addition to this, 57% of buyers after the appearance of COVID-19 chose to move to a suburban location, compared to 51% pre-COVID-19.
When looking for a home, 43% of buyers initially started by searching for listings online, while 18% started by contacting a real estate agent directly. Ultimately, 88% of buyers ended up purchasing a home through a real estate agent, and 55% said that they valued an agent’s ability to help them find the right home above all. When selecting an agent, 77% of buyers interviewed only one agent, and 91% said they would work with their agent again or recommend them.
Typically, a buyer’s home search lasted eight weeks, and they looked at a median of nine homes before making their decision. Out of the nine, they viewed five of those listings online. In fact, this year, 97% of homebuyers used the internet in their home search, which is an all-time high.
Similarly to buyers, 77% of home sellers decided to work with the first agent they contacted. Again, taking advantage of the options afforded by the internet, 91% listed their homes on an MLS. COVID-19 had an effect on sellers, too, especially when considering the way they marketed their homes. Those who sold their homes after March were more likely to turn to technology as a marketing tool. In fact, 27% of those sellers used virtual tours to market their homes as compared to 16% pre-pandemic.
The most common reason sellers gave for moving was that they wanted to move closer to family, with 15% stating this reason. Others stated that their current home was too small or that they had a change in family situation. However, after March, more sellers reported that the main reason for their move was because their home was too small, rather than wanting to live closer to family. Still turning to a professional, 89% of sellers chose to work with a real estate agent. For FSBOs, those who chose to sell their home on their own saw a significantly smaller return at a median of $217,900, while those who listed with an agent saw $242,300. Overall, the final sales price for all homes sold over the past year was a median of 99% of the final listing price.
At this point, if you’re not taking advantage of online portals, social media and other internet platforms, you’re missing out on a huge number of potential clients. It’s also key to consider how you’re representing yourself online, through your marketing and in-person, considering how many people choose to work with an agent based on their first-impression. Also, as always, remember to follow up with clients to ask for recommendations and referrals; after all, a huge majority of people are happy to recommend their agent.
This data can also be helpful if you’re looking for a niche, considering the shift in both buyer and seller trends. Since families seem to be looking for multi-generational homes or have more family members moving in with them, this may be a strong area to pursue. Additionally, as working from home becomes the norm for many companies, more buyers are looking to move to suburban areas. If you’re in this type of location, it could be helpful to partner with an agent in a more urban location for referrals.
Overall, while these trends change from one year to another, it’s important to keep up with them. To read the full NAR report from 2020, go here.