There are many types of homes for sale on any given day, but what trends are consumers gravitating towards?
Tall, short, skinny, fat, new, old, historic, modern, urban, rural – the possibilities are endless when it comes to the inventory of homes for sale.
Beyond all that diversity, though, unmistakable trends emerge on what consumers want in their homes, and in our continuing series on NAR’s 2014 Profile of Home Buyers and Sellers, we’re looking at the five big trends shaping homebuying habits in the U.S.:
1. New Homes are Scant – Though homebuilding has made notable progress the last few years, new homes remain a very small portion of the homebuying market. How small? Try 16 percent – that was the market share for new home sales among all recent home purchases. Then again, that’s not surprising – we report often on the existing/new home ratio, and how there are currently 11 existing-home sales for every one new home sale (the historical ratio is 6:1, meaning we’re quite out of whack).
2. Detached Remains King – Once again, the detached single-family home was the wide favorite for homebuyers, with 79 percent opting for the classic home; meanwhile, 8 percent purchased a townhouse/row house, 8 percent a condo and 6 percent some other kind of housing.
3. Suburbs Still the Favorite – Half of all homebuyers purchased homes in suburbs or subdivisions, while the remaining homebuyers went with a small town (20 percent), urban area (16 percent), rural area (11 percent) or resort/recreation area (3 percent). So once again, we have an interesting contrast on our hands – though buyers, as you’ll soon see, desire more accessible, convenient residential areas, they’re not quite ready to give up single-family detached homes in suburban communities.
4. Quality, Convenience and Affordability – In descending order, those were the three biggest factors influencing the neighborhood that homebuyers ultimately chose, with 69 percent valuing the neighborhood’s quality, 52 percent its convenience to their job and 47 percent the home’s affordability. Other prominent factors included: convenience to family and friends (43 percent); convenience to shopping (31 percent); quality of the school district (30 percent); neighborhood design (28 percent); and convenience to entertainment or leisure activities (25 percent).
As we alluded to earlier, those desires conflict with reality, especially when it comes to convenience and affordability. Home prices in denser metro areas are rising faster than in suburban areas, yet homebuyers increasingly desire the very convenience and walkability that those dense areas provide…while still clinging to their detached homes. There are two things we’ll be focusing on, as time progresses – whether multifamily develops spring up in those areas in an effort to accommodate more residents, and whether consumers sacrifice single-family homes for the sake of those conveniences.
5. Being Green and Commuting Less – Finally, heating and cooling costs were important to 86 percent of homebuyers, and more than two-thirds valued energy efficient appliances and lighting; additionally, commuting costs continue to grow in importance, with 70 percent of buyers placing value on that factor.