What should you know about home sellers, heading into the 2015 housing market?
Our last few stories on NAR’s 2014 Profile of Home Buyers and Sellers has focused on the buyer-side of the equation, but now we’re finally taking a look at home seller – and unsurprisingly, the portrait is a very interesting one.
Below, we’ve collected six important home seller trends that you should be aware of:
1. Sellers are Older and Affluent – The typical home seller, according to NAR, was 54 years old, up from 53 in 2013 and from 46 in 2009; additionally, 74 percent of sellers were married, and had a household income of $96,700 (which is consistent from last year.
2. Sellers are Movin’ On Up – Unsurprisingly, a sizable portion of home sellers are moving on to bigger and better things. Forty percent traded up to larger homes; 47 percent purchased a more expensive home; and lastly, 53 percent purchased a newer home – and given our recent reports on new construction, that all but denotes a larger, more expensive home, given where homebuilding has trended since the recession.
3. Normalcy Returning – Perhaps the most encouraging stat in NAR’s entire report came in the form of median tenure, aka the amount of time that homeowners spend in their homes before selling. Currently, homeowners stay in their homes for 10 years, up from just six years in 2007; though negative equity and delinquencies have surely impacted that number, it’s a good sign that sellers are not jumping ship at a radical rate.
4. Sins of the Downturn Persist – Speaking of negative equity, 17 percent of recent sellers had to delay or stall their home sale because the value of the home was worth less than their mortgage. That number is interesting enough, but here’s the most surprising detail of all – that percentage is up from 13 percent in 2013. Given the soaring price increases of last year, one would have expected that number to fall, but clearly, we’re still working our way through the negative equity pitfalls of the recession years.
5. Incentives Remain Prominent – Though we often hear about “seller’s markets” in certain parts of the country, incentives are still common. Thirty-six percent of sellers, in fact, still offer incentives to attract buyers, with home warranty and closing cost assistance being the most common forms.
6. Still a Zany Marketplace – In case you were wondering, we’re still in the midst of a zany, unorthodox marketplace, and we saved the most telling stat for last. Sellers realized a median equity gain of $30,100, up 17 percent from last year. Here’s the kicker, though – sellers who owned their home for one to five years reported higher gains than those who owned a home for six to 10 years, what with the dramatic declines of 2008-2012 and the rapid increases of 2012 to the present day.