Profile of Home Sellers in 2021 - How Did They Sell a Home?

The 2021 Profile of Homebuyers and Sellers is the 40th anniversary of the first National Association of Realtors report. The 2021 report is unusual because it is the first full year in which buyers and sellers purchased or sold during the COVID-19 pandemic, in what turned out to be a record setting year.

Long Beach Spanish bungalow

As discussed in the buyer post, this was based on a survey of homesellers' experience.

The median stay in a home in 1985 was just five years, in 2021 the tenure in a home decreased to eight years (from previous year high of ten years).  (This is based on national data, some areas such as Southern California have been more than 8 and 10 years).  Tightened inventory saw sellers getting 100% of their asking price (and more) in one week or less.  Nationally, the median home equity at time of sale was $85,000 in 2021, compared to $66,000 in 2020, a significant increase.

• The typical homeseller age was 56.
• Of all homes sold, 69 percent did not have children under 18 residing in the home. 
• Eight-nine percent of sellers identified as White or Caucasian, 
• The share of first time homesellers was 32 percent, and only 6 percent of all sellers did not plan to sell the previous home.
• Thirty-eight percent of the homes sold in 2021 were located in the South region, 24 percent were in the Midwest region, 22 percent were in the West region, and 15 percent were
  in the Northeast.
• The majority of homes sold were single family homes (78 percent).
• Forty-six percent of sellers traded up to a larger size home, and a majority of sellers purchased a home in the same state.
• The over 65 age range downsized to a home 100 square feet smaller.
• Buyers (former sellers) in the 35-44 age group bought the most expensive trade-ups by an increase of $101,000.
• Sellers said they wanted to move closer to family, especially those who moved the greatest distance.

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  Time on Market - Sales vs. List Price

  
  

  Ninety percent of all sellers worked with a real estate agent, while FSBO sales were below the historic norm at 7 percent.
• Less than 1 percent of sellers used an iBuyer program to sell their home.
• Ninety-six percent of sellers working with an agent did not know the buyer.
• Across all regions, the final sales price was a median 100 percent of the final listing price, the highest recorded median since 2002.
  
• Sellers in home 21+ years had 162 percent equity.
• Client referrals and repeat business were the ways seller found their real estate agent.

For a more extensive review of selling and marketing your home, please contact me -- I'm a broker with more than 25 years in the real estate business of helping buyers and sellers.

Julia Huntsman, REALTOR, Broker | http://www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Profile of Homebuyers in 2021: How Did They Buy a Home?

Buyers in 1981 vs. 2021

The 2021 Profile of Homebuyers and Sellers is the 40th anniversary of the first National Association of Realtors report. The 2021 report is unusual because it is the first full year in which buyers and sellers purchased or sold during the COVID-19 pandemic, in what turned out to be a record setting year.

Based on data collected nationwide between July 2020 and June 2021, the survey consisted of 129 questions via paper or online in both English and Spanish.  Consumer names were obtained from Experian which maintains an extensive database of recent homebuyers derived from county records (which are public). The entire report is 164 pages with multiple graphics covering aspects of buyers and sellers experiences, and information about working with their agents. 

This post will be about the buyer experience section, and will primarily be hitting the highlights. 

First time homebuyers grew to 34 percent, greatly helped by the low interest rates but then challenged by a housing market with lowered inventory, rising prices and much competition from other buyers. Buyers reported the most difficult task was finding the right home to purchase, and the time spent in a home search was only eight weeks.  Eight-eight percent (88%) of buyers used a real estate agent to help them purchase.  

The typical first time buyer was 33 years old, repeat buyers were up to an all time high of 56 years.  Sixty percent were married couples, 19 percent were single females, nine percent single males, and nine percent unmarried couples. The largest share of buyers were in the 25 to 34 age group, and the median income was $102,000,

First Step in Homebuying for all Buyers

 

The majority of buyers either began their search online or contacted a real estate agent as a first step in the home search. Few people read books about the homebuying process or attended a home buying seminar--even visiting open houses was lower in activity as an initial step in  the home search.

 

 

Information sources used in home search

For information, all age groups primarily turned to an agent and then to an internet device , and then visited open houses.

But where the buyer found the home they actually purchased was on the internet for 51% of buyers, through their agent for 28% of buyers, with much smaller percentages for yard signs, personal contacts, homebuilders or the sellers themselves.  This is a complete contract to 2001 when 8% of buyers found their home on the internet and 48% through their agent.

This is only a partial representation of buyer characteristics in the Report for 2021, for a complete copy of this study, please contact me via phone or email. 

And for help in buying a home, I can work with you with my 25+ years of experience.

Julia Huntsman, REALTOR, Broker | http://www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Why Shouldn't the Buyer Write a "Buyer Love Letter" to the Seller?

Fair housing issues are coming to the forefront of the real estate profession and being addressed at all national, state and local levels of the industry for REALTORS.  Problems with race, color, ancestry, gender, marital status, military affiliation, plus other groups of the legally protected classes continue to exist for many buyers and sellers in real estate transactions. Even appraisals have come under review.

One of the mechanisms by which discrimination may arise has been called the "buyer love letter" -- it arrives with the buyers' offer to a seller because it has been traditionally thought to help positively influence the seller into accepting an offer. They are often accompanied with photos, background stories about the buyer, and other personal history disclosed willingly by buyers who want to appear sympathetic to the seller, people who would love their new home just as much as the seller has, all designed to create a connection in order to get chosen for the contract.

This tactic has been addressed in the past, yet agents and their clients continue to submit such letters.  In one state, it is now outlawed.  In California they are not illegal, but agents are cautioned to advise their clients of the negative potential of this practice.  If a buyer insists on submitting such a letter, they are advised to eliminate personal information (but that's what some people hope will gain traction with the seller).  

Buyer Interest Letters, as they are official referred to, are considered a legal risk for unconscious or implicit bias. The buyer cannot really know what is in the seller's mind or background, and sometimes the seller doesn't either until the selection time comes, or the seller may not consciously be aware of their reasons for certain choices. Photos meant to present the buyer in a positive light may instead do the opposite, or personal buyer stories such as "I grew up in the neighborhood", "I have kids", or "my church is nearby" may elicit a negative reaction from the seller, or a favorable reaction towards a buyer but which excludes other buyers who do not have kids, a church or grew up in another state and thus cannot make any of those claims, and which in fact may violate one of the federal or state protected classes mentioned above.  So this is where Fair Housing issues come into the transaction.

The only information that I advise my clients to submit with an offer is the financial qualification dealing with price and terms of the offer, which in fact is required in the contract terms anyway, because the ability and motivation to buy are the actual buyer requirements. I do not advise my buyers to write any other personal information, and in fact, the seller may have actually instructed his/her agent to not accept any offers accompanied by a Buyer Interest Letter.

So please be aware that while a listing agent must notify the seller of all offers received, per California Association of Realtors: 

 "Even if the agent is following the seller’s instruction, the agent should disclose to the seller that an offer was received with a buyer letter and returned to buyer or agent per the seller’s instruction. Paragraph 10C(2)(A) of the C.A.R. Residential Listing Agreement, C.A.R. Form RLA, contains a seller instruction not to present buyer letters.  Only if the alternate paragraph 10C(2)(B) is checked is broker authorized to present such letters."

By carefully considering potential Fair Housing guidance, the parties will not be subject to doubts about their participation in the contract process.

Julia Huntsman, REALTOR, Broker | http://www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996