Well, there was one thing that didn't change from last year to this in the National Association of Realtors' (NAR) latest sweeping survey of recent homebuyers. "For the second consecutive year, sellers cited their desire to be closer to friends and family," the trade group said in its "2020 Profile of Home Buyers and Sellers."
The results were from 8,212 responses to a 131-question survey mailed in July to 132,550 homeowners randomly selected and weighted geographically among those who had bought a home between June 2019 and June 2020.
That meant this year's survey included people who bought and/or sold homes during the first few months of the COVID-19 invasion, an ongoing tragedy that has deeply affected the residential real estate market.
"The coronavirus pandemic initiated several shifts in America's housing market over the past eight months. Changes in the behaviors of homebuyers and sellers were especially notable as buyers' usual tendencies altered, and the urgency to sell accelerated," the trade group said in a Nov. 11 press release.
The shifts were reflected in these three highlights the NAR plucked from the report and included in its announcement:
- "Buyers purchasing after March were more likely to purchase a multigenerational home -- 15% versus 11% who purchased before April.
- 14% of buyers who purchased in April or later said their transaction was delayed due to COVID-19.
- Sellers who closed in April or later were more likely to sell because their home was too small -- 18% compared to 13% of those before April."
As for the desire to be closer to friends and family being at the top of the list as a reason to sell, that was more likely for those moving farther away, the report said, while the desire for a bigger house was cited as the primary reason for moving to a nearby location.
"Buyers sought housing with more rooms, more square footage, and more yard space, as they may have desired a home office or home gym," said Jessica Lautz, the trade group's vice president of demographics and behavioral insights. "They also shopped for larger homes because extra space would allow households to better accommodate older adult relatives or young adults that are now living within the residence."
Paying more for the place to ride out a quarantine
The researchers considered purchases made after March to have taken place during the pandemic and found that those purchasers, regardless of location, likely paid more for the house than those buying in the months before the pandemic by a significant margin. The average home purchase amount from April through June was $339,400 compared with $270,000 from June 2019 through March 2020.
"So many sellers were eager to get out of their old home and move to something bigger that would better meet their needs during quarantine," Lautz said.
Another interesting finding is that those who bought during the pandemic said they planned to remain in that house for an average of 10 years, compared to the 15 years cited by those who bought before the COVID-19 crisis began.
How old they are, how they shopped, and how they marketed
That may be connected to how long these folks think they'll need all that space, and to their financial wherewithal: The average household income for people who closed on their homes after March was $100,800 compared with $94,900 for pre-April buyers.
That's also reflected in the average age of the buyer, which reached a record high of 55, the NAR survey said. So, in that group were a lot of older Gen Xers and younger boomers who presumably may look at downsizing relatively soon.
One thing that didn't change much was the desire to see what they're getting. Despite social distancing and the reported flights from cities, only 5% of those who bought said they did so without seeing the home in person, compared to 3% of those who bought before April.
But they almost all used the internet to search before they looked, and 27% of the post-March sellers said they used virtual tours to show their properties online, up from 16% of those who did so before the pandemic.
Bottom line, it's still a seller's market. Or is it?
The NAR report said that home sellers who sold after March were more likely to say they were somewhat urgent in their need to sell their home -- 46% compared to 39% of those who sold before April.
So, some things never change. When it's time to sell, it's quite often really time to sell, regardless of the reason. While that makes it sound like we're in a buyer's market full of motivated sellers, we're also seeing short supply, low interest rates, and demand to move that shows us that instead we're in a seller's market, with bidding wars breaking out in multiple locations.
So, bottom line, this is good information for a macro view of the market, for sure, but savvy investors still need to read the tea leaves in their own location before making a move.