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Posted by Atascadero News | Dec 22, 2024
This month, I wanted to take an in-depth look at both the buyer and seller and talk about some of the interesting statistics that have been reported this year. For this article I will be using information and statistics gathered from the California Association of Realtors (CAR).
It has been a real rollercoaster for buyers this year. Interest rates have continued to remain in the mid-6 to low 7 percent; the National Association of Realtors (NAR) announced that buyers are now responsible for their agent’s compensation, and inventory is still historically low (although it’s getting better). How do all these factors affect the average buyer?
Let’s start out by demographically defining who our buyers are. According to CAR, Millennials make up the largest group of buyers in 2024. Millennials, aged 28-43, make up 47 percent, Gen X (ages 44-59) are 28 percent, Boomers (ages 60-69) are 21 percent, Gen Z (ages 12-27) are 2 percent, and buyers seventy and up make up the remaining 2 percent of buyers. If we take a look at the workforce in our country and how the different generations account for it, it makes sense that Millennials make up the largest group of buyers since Millennials make up most of the full-time workforce, 39 to 42 percent. Gen X represents 35 to 36 percent and Boomers 18 to 19 percent.
Some other characteristics that CAR evaluated are marital status, median age of a buyer, median income of a buyer and whether or not a buyer is a first-time buyer or a repeat buyer. The majority of buyers, 61 percent, are married, 29 percent are single, and 6 percent are friends and/or family. The median age of a buyer is 45 years old, and the median income is $150,000. So far in 2024, repeat buyers make up 63 percent of the buyers, while first-time home buyers make up 37 percent.
It is interesting to note that Millennials currently make up the largest generation demographic in the US. If we break down where people are generally at in life by each generation, Millennial buyers (at least the older ones) are more than likely married with either a family or want to start one. They are the ones who are outgrowing their starter homes and looking for a home that is typically larger so there is more room for their family to continue to grow. Gen X buyers are at a stage in life where they don’t necessarily need something bigger, they want something bigger or they are finally in a financial position to be able to afford what they have always wanted. Boomers are the generation that are either moving to be closer to family or are moving to an area that is more affordable so that they can retire more comfortably. Of course, each generation has its exceptions, but, in my experience, this is what I would typically see from each generation.
Now, let’s look at the seller and the different characteristics that help define them. Looking at the generation breakdown of sellers, Boomers lead the way at 49 percent, followed by Gen X (23 percent), Millennials (16 percent), and buyers over the age of 70 make up 12 percent. CAR estimates that 46 percent of sellers plan on purchasing another home after they sell their current home, and the majority of sellers, 53 percent, are married, and 31 percent of sellers are single people. They also discovered that the median number of years a seller owns their home before selling is 13 years.
There are many reasons why a seller would choose to sell their home after owning it for more than a decade. Boomers are at an age where they are downsizing and looking for a simpler life. They’re retiring, kids are out of the house and they long for a more relaxed lifestyle. Gen X, as we explored above when looking at the buyer, are oftentimes looking to find a larger home to accommodate a larger family or a different lifestyle. They need to sell their current home, often their starter home, to buy the next one. Boomers and Gen Xers are also the ones more likely to sell their home to relocate for either a job, to be closer to family or move to a less expensive location for retirement purposes.
It is also interesting to look at what services both buyers and sellers value the most. Both buyers and sellers report that negotiating the price and/or terms of a sale is the most important service they receive from their real estate agent. Buyers also report that finding the right property, project managing the transaction, providing expertise on real estate/mortgage finance and navigating legal/regulatory complexities are the other services they value (in that order). While sellers reveal the services they value the most, in order, are project managing the transaction, preparing the home for sale, setting the right price and navigating legal / regulatory complexities. While buyers and sellers value the many services a real estate agent provides differently, they also have several in common. With all that said, you will likely find yourself in either category or demographic. Your realtor is also experienced in the complexities specific to both the buyer and seller and will work with you with that knowledge in mind to help you get to your next home.
Website used for reference: car.org/Global/Infographics/2024-Buyer-Snapshot
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