For the past 40 years, the National Association of Realtors (NAR) has published an annual report on the state of the nation's real state market. The 2021 report covers the peak of the COVID-19 crisis and offers some interesting insights on homebuyer behavior in the past year.
This year's report covers the period from July 2020 through June 2021, statistically outlining some of the significant changes witnessed in the real estate industry as the pandemic progressed. COVID-19 changed almost everything, from how we work and study to communicating with family, friends, and colleagues and commuting, or not commuting, to work. Lockdowns forced us to work remotely via Zoom, Google Meet made it possible to go to school from home, and Microsoft Teams helped us collaborate with colleagues.
These considerations impacted how consumers shopped for homes during the past year.
NAR's "2021 Profile of Buyers and Sellers" report reflects these facts, with homebuyers citing the desire to live closer to family and friends as a key factor for moving. An equally important motivator was the desire for more outdoor space or a bigger home.
Homes: A Look at The Numbers
By the numbers, homebuyers were snapping up properties at an accelerated rate, as most homes remained on the market for about a week. Homebuyers moved quickly, and when coupled with all-time low inventory, there was a decline in time on the market to the shortest number of days ever recorded nationally.
Buyers also had to grapple with historically high housing costs. The market over the past year saw homes reaching record prices. As a result, buyers typically paid 100 percent of the asking price, and 35 percent nationally – likely a much higher number in Massachusetts – reported paying over the asking price, according to the report.
Home tenure showed the most significant decline in the history of the data set, dropping from 10 years to eight. In general, homebuyers responded that they expected to live in their homes for a median of 12 years, while 18. percent said they had purchased their forever home and were not ever moving. Historically, home tenure has been six to seven years, but it increased to nine to 10 years following the Great Recession.
The Continued Growth of Online Options for Homebuyers
The pandemic accelerated the growing trend of using online options as a primary method for finding viable properties for homebuyers.
On average, buyers said that finding a home took eight weeks, the same as the previous year. Forty-three percent of homebuyers stated that they found the virtual tour option to view properties online useful. For the second year in a row, buyers said that finding the right home continued to be the most challenging part of the process.
The report found that 41 percent of buyers started their property search online in the past year, and another 19 percent said their first step involved contacting an agent. In fact, the report found that 87 percent of home buyers purchased their home through a buyer broker or buyer agent, with another 7 percent purchasing their new home directly from a builder or builder's agent.
Buyer agents – not necessarily exclusive buyer agents – assisted many first-time buyers over the last year. The report notes the share of first-time homebuyers increased from 31 percent to 34 percent, the most significant increase since 2017. The typical first-time buyer was 33 years old, equal to the previous year. Conversely, repeat buyers' age continued to climb, reaching an all-time high of 56 years old.
Forty-seven percent of home buyers said the agent they used was referred by a friend, neighbor, or relative, and 13 percent used an agent they had already worked with on a past transaction. Seventy-three percent of buyers reported that they needed to interview only one real estate agent during their home search. A whopping 90 percent said they would use their agent in the future or recommend the agent to others.
How the Results Were Tabulated
In July 2021, the NAR mailed out a 129-question survey using a geographically representative random sample to 129,800 recent homebuyers who purchased their homes between July 2020 and June 2021. The NAR received a total of 5,795 responses from buyers of primary residences. All the data from the report was based on primary residence home buyers, not investors or vacation home buyers.