Thirty-five years ago, when the National Association of REALTORS® conducted its first in-depth profile of home buyers and sellers, the real estate market was far different than it is today, but some of the differences may surprise you. Here are five nuggets from NAR’s recently released 35-year study:
The internet is not replacing real estate agents
In 1995, two percent of buyers used the internet for a home search. By 2005, over three-quarters of buyers searched for homes online, and since 2012, that number has been closer to 90 percent. Yet nearly 90 percent of today’s buyers also work directly with a broker to get insights and local market knowledge that is not easy to find online.
Homes are bigger, but only slightly, and we’ve hit a plateau
In 1981, the median size of a single-family home was 1,700 square feet. Today, the median size is 2,000 square feet—an average that was reached in seven different years and remains the survey’s high mark for home size. The common misperception that homebuyers are either flocking to McMansions in the suburbs or to tiny homes of less than 500 square feet is not borne out by the data.
Down payments have gotten smaller, but not in recent years
In 1989, the typical first-time homebuyer had a down payment of 10 percent while repeat buyers put down 23 percent. In 2005 and 2006, easy credit helped drive the down payments of first-time buyers to just 2 percent. In recent years, down payments have come in at 6 percent for first-time buyers and 13 to 14 percent for repeat buyers.
Home searches are taking longer in the digital era
From 1987 to 2007, home searches took seven to eight weeks on average. Home searches then increased to 12 weeks on average through 2013, then tapered to an average of 10 weeks in 2014 and 2015.
Participation from first-time buyers is depressed
Except for 2009 and 2010, when numbers were skewed due to a homebuyer tax credit, first-time homebuyers have accounted for 39 percent of sales over the past 35 years. In 2015, 32 percent of sales came from first-time buyers, the lowest percentage since 1987 (30 percent). Contributing factors include underemployment, student debt, later marriages and children, and the lingering effects of the Great Recession.