Buying or selling a home is not only a serious financial undertaking, but an emotional decision that encompasses many life considerations. For most, the sale of a home is one of the most significant economic transactions they will make in their lifetime. Buyers purchase a home not only for financial and logistical reasons, but also as a means of achieving the American dream. For many home sellers, the need to move can come because of changes in jobs, family situations, and the need for a smaller or larger living area. The National Association of Realtors released a report of home activity in 2017, so I decided to analyze some of the national and local details to help those in the market better understand pricing trends and the typical profile of a home buyer or seller.
In New Jersey, the average seller was 61 years old, married with no children living at home. Sellers typically lived in their house for ten years before selling, and only 17% sold their home without the service of a real estate agent. Nationally, thirty-seven percent of sellers offered incentives to attract buyers; In New Jersey, this was significantly lower at about 20%. Most sellers reported that they sold their home for almost $50,000 more (on average) than what they purchased it for. Interestingly, only 53% of those surveyed were satisfied with the selling process they experienced, and most said they were referred by a friend.
Predominantly, existing homes (previously owned) made up a majority of the home sales at 92%, compared to just 8% of new construction. Nationally, new construction homes were twice as favorable than they were in New Jersey. Typically, a home that was listed for sale with a Realtor had an accepted offer within 35 days on the market. The number was drastically higher when sold by owner without the assistance of a real estate professional. The typical buyer first looked online at least two weeks before contacting a real estate agent.
First-time buyers made up almost 40 percent of all home buyers in New Jersey. The typical first-time home buyer was 34 years old, with a median combined household income of $91,800. The typical repeat buyer was 56 years old with a median combined household income of $105,000. The average home buyer viewed about seven homes (online and offline) before they made their decision. Almost 80% of home buyers in Jersey saw purchasing a home as a good financial investment.
Nationally, almost 90% of home buyers financed their home purchase. I find this to be a very “telling” number considering the enormous amount of “all cash offers” at the time of contract negotiations. The typical first-time home buyer in New Jersey put down 10% of a down payment, whereas the repeat buyers put down 20% on average; Although this number is vastly higher from my experiences. Almost forty percent of the home buyers reported they have been saving for two or more years for their home purchase.
The financial and emotional decisions of buying or selling, come with many moving parts full of careful consideration and research. It’s all about insight, information, and guidance! Always work with a professional who is in tune with all of the components of the marketplace!
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By Shmuel Shayowitz
Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker, and direct lender. Approved Funding is a mortgage company offering competitive interest rates as well specialty niche programs on all types of Residential and Commercial properties. Shmuel has over 20 years of industry experience including licenses and certifications as certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. He can be reached via email at Shmuel@approvedfunding.com.