After such a tumultuous year nationally in real estate and a flat market locally, we were curious about what motivated people to buy properties. That was one of the questions analyzed by the National Association of Realtors in its recent release of statistics from the Profile of Home Buyers and Sellers survey. This annual survey helps provide valuable insight on the changing needs of buyers and sellers.
The No. 1 reason to purchase for all buyers seems obvious: the desire to own their own home. When broken down into more specific groups, this reason was also primary for first-time home buyers. However, for repeat buyers, the top reason was job-related relocation, followed by the desire for a larger house rather than the desire to simply own a house.
Declining values in many markets also affected purchasing, as many buyers found homes more affordable. About 10 percent of first-time home buyers felt affordability was the primary reason to purchase in 2009, compared with 5 percent in 2008. With repeat buyers, only 6 percent listed affordability as the No. 1 reason for 2009, compared with 2 percent in 2008.
The federal tax credit played a role with 6 percent of first-time home buyers and 1 percent of repeat buyers. While the tax credit didn't have a direct effect on repeat buyers, it did allow many repeat buyers to upgrade to another house by selling their current house to a first-time home buyer.
Looking at groups by age showed another interesting trend. Buyers between 25 and 34 years of age showed the most activity, with 34 percent of the buyers. Each group progressively older showed less activity: 22 percent activity for those ages 35 to 44, 18 percent for ages 45 to 54, and 13 percent for ages 55 to 64. The exception to this trend was in the youngest age group analyzed, the 18- to 24-year-olds: Only 6 percent in this group were active buyers. (See chart, "Buyers who purchased a home this year.")
More analysis shows that the reasons to purchase varied among these groups. Seven percent of the under-25-year-olds listed the first-time home-buyer credit as their primary reason to purchase. The 65-and-above group was driven by the desire to be closer to family; all others were driven by the desire to own their own home.
The survey showed changes as well in the composition of home-buyer households. Married couples decreased from 68 percent in 2001 to 60 percent in 2009. Interestingly, single-women home buyers increased from 15 percent in 2001 to 21 percent in 2009. Single males grew from 7 percent in 2001 to 10 percent in 2009. The percentage for unmarried couples only increased from 7 percent in 2001 to 8 percent in 2009.
Unmarried couples said wanting their own home was their primary reason to buy; the No. 2 reason was affordability. For single homeowners, the primary reason was a change in family situation. (See chart, "Who is buying houses")
While corresponding breakdowns for Anchorage are not readily available, national trends do show what motivated buyers this year. With the tax credit recently extended to include repeat buyers in 2010, it will be interesting to see what changes the coming year may bring in home buying.
Clair and Barbara Ramsey are local associate brokers specializing in residential real estate. Their column appears every fourth Sunday. Their e-mail address is firstname.lastname@example.org.