Over 90 percent of home buyers and sellers worked with a real estate professional
WALTHAM, Mass. – January 28, 2019 – (RealEstateRama) — Massachusetts first-time home buyers maintained a strong foothold in the market in 2018 despite challenges like rising median prices and a historically-low number of homes for sale in the state, according to the 2018 Profile of Home Buyers and Sellers from the National Association of Realtors®. While these conditions might have caused the share of first-time home buyers in Massachusetts to fall slightly from 42 percent in 2017 to 40 percent in 2018, the share of first-time buyers in the state is still above the national average of 33 percent.
“The lack of homes for sale made it difficult for both buyers to buy and sellers to sell in 2018,” said 2019 MAR President Anne Meczywor, broker/associate at Roberts & Associates Realty Inc. in Lenox. “However, the fact that the share of first-time home buyers is greater than the national average shows that the ‘American Dream of Homeownership’ is still alive and well in Massachusetts. But without more homes for sale, that dream will become harder to achieve.”
The state’s share of first-time home buyers fared better than the Midwest (35%), South (30%) and West (29%) regions of the United States, but slightly worse than the Northeast as a whole, which had a total share of 45 percent of first-timers in 2018.
Working with a Real Estate Professional:
Ninety-one percent of Bay State residents consulted a real estate broker when buying a home in 2018. Nationally, the number of buyers who worked with a real estate professional was lower than that of Massachusetts residents at 87 percent. This is a slight decrease from the high in 2011-2012, when 89 percent of buyers reported using an agent. As the complexity of the home purchase process has increased, so has the use of buyer agents, which has grown from 69 percent in 2001. The percentage of buyers using an agent has been above the 80 percent mark since 2010 as the number of buyers purchasing directly from a previous owner or through a builder has fallen.
“Real estate professionals continue to demonstrate their expertise in the home buying and selling process. More people are seeing the value that they bring to the table as the process to buy and sell homes becomes more complicated,” said Meczywor.
Ninety-four percent of sellers in Massachusetts worked with a real estate professional, while the national average hovered slightly under the Massachusetts statistic at 91 percent. The survey also found that 11 percent of sellers in the Bay State and eight percent nationally had to delay the sale of their home because the value of their home was worth less than their mortgage. The number of Massachusetts sellers who chose to sell their home without an agent or “For-Sale-By-Owner” (FSBO) was five percent (up from three percent), but below the national level at seven percent.
The median household income of buyers rose to $106,900 in 2018 from $101,700 in 2017. The median income of buyers nationally was $91,600. Fifty-eight percent of home buyers were married couples, 18 percent unmarried couples, 15 percent single females, and 10 percent single males. Nationally, 73 percent of buyers were married, 15 percent were unmarried couples, 11 percent were single females, and 10 percent were single males.
The median age of home buyers in Massachusetts was 42 years, compared to 46 years nationally. An equal proportion of first-time home buyers in the state were between 25 and 34 years old and between 35 and 44 years at 26 percent. Only two percent were 18-24 years.
The median age of the home seller was 55 years and they had a median income of $119,300 (the US median was $98,800). The typical seller owned their home for 13 years. Nineteen percent of home sellers reported the main reason for deciding to sell was the home was too small, while 10 percent reported that their home was too large. Ten percent cited a change in the family situation, 10 percent wanted to be closer to friends and family, and another 10 percent found that their current neighborhood had become less desirable.
In 2018, 87 percent of buyers in Massachusetts financed their home purchase (96% of first-time buyers compared to 81% of repeat buyers). Sixty-nine percent of people reported using their savings to pay for the down payment (86% of first-time buyers compared to 43% of repeat buyers). Of the first-time home buyers who said that saving for a down payment was the most difficult step (17%), 65 percent cited the burden of student loans made saving more difficult, compared to 52 percent the previous year.
In Massachusetts, nine percent of buyers in 2018 purchased new homes, an increase from four percent in 2017. Of these buyers of new homes, 40 percent cited purchasing a new home over a previously owned home to avoid renovations or problems with plumbing or electricity and 45 percent wanted the ability to choose and customize design features. Avoiding renovations and having the ability to customize is more important in Massachusetts likely because the average home in the Bay State was built in 1970. By comparison, the average home nationally was built in 1991. Twenty-five percent of new home buyers reported there was a lack of inventory of previously owned homes.
Sixty-eight percent of home sellers experienced satisfaction in the selling process in 2018. This figure increased from 59 percent in 2017, likely due to increased buyer demand and rising prices. Only 21 percent of sellers offered incentives to attract buyers compared to 37 percent nationally.
“Massachusetts is a desirable place for people to live, work, and build a future,” said Meczywor. “But without a good selection of homes from which to choose, buyers aren’t going to find what they want to buy. The supply side of the market needs to improve significantly in 2019 to meet that unmet demand.”
About the Massachusetts Association of Realtors®:
Organized in 1924, the Massachusetts Association of Realtors® is a professional trade organization with more than 24,000 members. The term Realtor® is registered as the exclusive designation of members of the National Association of Realtors® who subscribe to a strict code of ethics and enjoy continuing education programs.
About the data:
The data is from the 2018 Massachusetts Profile of Home Buyers & Sellers, which is compiled annually by the National Association of Realtors® (NAR) on behalf of the Massachusetts Association of Realtors® (MAR).
Eric Berman – eberman (at) marealtor (dot) com – 781-839-5507