ALL investors want to know the profile of home buyers, as this helps in determining what will be the best investment for generating the best capital growth. Armed with this information, once you uncover the best location in the U.S. to make a purchase, you can utilize this information by knowing what the buyers are looking for.
If I may suggest, you might print this off and use it as a checklist when making your real estate investment purchases.
2011 Buyer Profile (compiled from a survey of the National Association of Realtors)
Who are the buyers?
- First-time home buyers represent 37% of the market
- 78% believe their home is a good investment
- 45% believe real estate investment is better than stock market
- The median age of first-time buyers was 31
- The median income was $62,400, up from $59,900
- The typical first-time buyer purchased a 1,570 square-foot home costing $155,000
- The estimated median monthly mortgage principal and interest payment was $794.
- The typical repeat buyer was 53 years old and earned $96,600
- Repeat buyers purchased a median 2,100 square foot home costing $219,500
- The median down payment was 11%
What they purchased: (investors want to track this as part of their exit strategy)
- 77% of respondents purchased a detached single-family home
- 9% a condo
- 8% a townhouse or row house
- 6% some other kind of housing
- The typical home had three bedrooms and two bathrooms
- 51% of all homes purchased were in a suburb or subdivision
- 18% were in an urban area
- 18% in a small town
- 1% in a rural area
- 3% in a resort or recreation area
- The median distance from the previous residence was 12 miles
Biggest factors influencing location of home:
- 67% stated quality of neighborhood was an important factor
- 49% percent convenience to jobs
- Overall affordability 45%
- Convenience to family and friends, 39%
- Neighborhood design, 32%
- Convenience to shopping, 28%
- Quality of the school district, 27%
- Convenience to schools 22 percent
- Convenience to entertainment or leisure activities, 21%
- 73% of buyers said transportation costs were important
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