An overwhelming majority of homebuyers and sellers in the Bay State worked through a real estate professional in 2011, according to a recent Massachusetts housing study.
According to the 2011 Massachusetts Profile of Home Buyers & Sellers, compiled by the National Association of Realtors (NAR) on behalf of the Massachusetts Association of Realtors (MAR), 94 percent of buyers and sellers said they worked with a Realtor last year. This is an increase of 12 and 13 percent, respectively, since this statistic was first tracked by MAR in 2003.
The study also found that despite the high number of foreclosures and short sales, only 3 percent of sellers cited not being able to afford their home as a reason to sell.
"The market conditions of the past few years have made the process of buying and selling a home more complicated, therefore it makes sense that so many buyers and sellers would choose to work with a real estate professional to manage the transaction," said 2012 MAR President Trisha McCarthy, a broker with Keller Williams Realty in Newburyport.
Bay State residents also consulted real estate brokers at a greater pace than the rest of the country. Nationally, the number of buyers who have worked with a real estate professional has grown from 69 percent in 2001 to 89 percent last year, which is 5 percent lower than the Massachusetts rate of 94 percent. Meanwhile, 87 percent of sellers across the country chose to work with a real estate professional, 7 percent lower than the Massachusetts rate. Of those national "For-Sale-By-Owner" (FSBO) sellers, half knew the buyer prior to the sale.
When first-time and repeat homebuyers were asked "what was the primary reason they purchased a home in 2011?" the top response was a "desire to own a home" (36 percent). The other top reasons included: the "desire for a larger home" (9 percent); a "change in family situation" (9 percent); the "affordability of homes" (7 percent); and a "job-related relocation or move" (7 percent).
The median income of Massachusetts buyers (which is reported from 2010 household data) was up to $89,700 compared to $82,100 in 2009 and higher than the $80,900 national median income. Sixty percent of homebuyers were married couples, 19 percent single females, 7 percent single males, and 11 percent unmarried couples.
The median age of the first-time homebuyer was 32, which was the same as in 2010. Fifty-six percent of first-time homebuyers were between 25 and 34 years old, while 20 percent were 35-44 years. Only 7 percent were 18-24 year years. First-time homebuyers in Massachusetts had a median income of $68,800 compared to $62,400 among first-time homebuyers nationally.
The median age of the home seller was 51 years (which is up from 46 years in 2010) and they had a median income of $114,000 (the US median was $101,500). The typical seller owned their home for 10 years. Seventeen percent of home sellers reported the main reason for deciding to sell was the home was too small. Another 17 percent cited job relocation and 15 percent reported a change in family situation (e.g., marriage, birth of child, divorce). Only three percent reported selling their house because they could not afford the mortgage and other expenses of owning a home, which was the same as in 2010.
In 2011, 90 percent of buyers still financed their home purchase (99 percent of first-time buyers compared to 83 percent of repeat buyers). Savings continues to be the chief source of the down payment for 85 percent of first-time buyers with 48 percent of repeat buyers using proceeds from the sale of their primary residence.
Thirty-nine percent of buyers felt that the mortgage application process was either "much more difficult than expected" (16 percent) or "somewhat more difficult than expected" (23 percent). Forty-three percent of buyers felt the mortgage application process was "not difficult/no more difficult than expected" and 18 percent felt it was "easier than expected."
Similar to 2010, 40 percent of home sellers did not reduce their asking price before the home was sold. Twenty-one percent of sellers offered incentives to attract buyers compared to 41 percent nationally. Most often that assistance was applied to closing costs, home warranty policies and credit toward remodeling or repairs.
