Work by Referral. Live the Good Life!

Brian Buffinis Real Estate Report

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Buying, selling or financing a home is one of the biggest decisions a person will make, so its only natural that they want to work with a knowledgeable professional they can trust. Remaining educated on the market and providing your clients with relevant and current information will give them peace of mind and help you secure their long-term business. Thats why Ive compiled Brian Buffinis Real Estate Reportupdated for 2011to inform you and help you exceed your clients expectations. Filled with facts and figures on the industry, this report is a must-read for todays professional. Youll learn about current buyer and seller trends and changing demographics as well as gain insight about where the market is headed. I hope you enjoy the report and put it to use in your business. Its a good life!

Brian Buffini CEO & Founder, Buffini & Company, North Americas Largest Real Estate Coaching & Training Company

Contents
Industry Facts Mortgage Facts Distressed Properties Buyer Facts, Trends & Demographics First-Time Home Buyer Facts Seller Facts, Trends & Demographics Transaction & Income Information Real Estate Agent Facts Real Estate in the New Era Why Working by Referral Works
Page 3 Page 4 Page 4 Page 5 Page 6 Page 7 Page 8 Page 8 Page 9 Page 10
SOURCES: National Association of REALTORS, 2009, 2010, 2011 RISMedia, Inc., 2010, 2011 CNN Money, 2011 U.S. Bureau of Labor Statistics, 2009 National Association of Home Builders, 2011 REAL Trends, Inc., 2010 The Nielsen Company, 2009 Forrester Research, Inc., 2010 Buffini & Company, 2010

REALTOR and REALTORS are registered trademarks of the NATIONAL ASSOCIATION OF REALTORS. 2011 Buffini & Company. All rights reserved.

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industry faCts
Decline of FSBO sales transactions in 2010:

Less than

1 in 10

In 2011, single-family home starts are forecast to increase

HOUSINg INvENTORY: November 2010

21% to 575,000
COMPARISON OF HOMES PURCHASED:

9.5 month supply 8.1 month supply

Housing is a key driver of the economy, accounting for of the gDP

December 2010 condos

15%

9% 77%
single-family detached homes

The national home ownership rate is nearly

67%

8% 6%

townhouses or rowhouses

15% 52%

of homes sold were new homes of homes purchased were in a subdivision or suburb

1990
West $204,000

The typical home purchased was built in

some other kind of housing

northeast $237,300

For the past 12 years, the average homeowners net worth has been

Midwest $139,700

31 to 46 times
that of the average renter

MEDIAN HOME PRICES:

south $148,400

34%

of a persons income (the largest portion) is used for housing It is now cheaper to buy than rent in nearly of American cities

3/4

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91%

Mortgage faCts

of buyers financed their home purchase

8% 4%

distressed ProPerties
Distressed homes make up of the market

median down payment for all home buyers median down payment for first-time buyers

36%

HOUSINg IS PREDICTED TO RECOvER THE qUICkEST IN THESE STATES:

95% 56% 7%

of first-time home buyers chose a fixed-rate mortgage of first-time home buyers financed their purchase with an FHA loan used the vA loan program

4% 6%

of buyers purchased a foreclosed home of buyers purchased a short sale

14%

median down payment for repeat buyers

north dakota south dakota iowa nebraska oklahoma

50% 57%

of all buyers considered purchasing a foreclosed home, but did not of first-time buyers considered purchasing a foreclosed home, but did not

By the end of the year, fixed mortgage rates are forecast to increase from

4.75%
to

5.75%

The majority of these buyers could not find the right home or thought the process was too difficult or complex.

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Buyer faCts, trends & deMograPhiCs

48% 68%

of first-time buyers are married couples of repeat buyers are married couples

The typical buyer purchased a

3 bedroom/2 bathroom home

HOME BUYER DEMOgRAPHICS:

More than

20%

single women

12%

of buyers list energy efficient heating, air conditioning and appliances as must have features in their new home

80% 1/3

toP FACTORS
influencing where a buyer purchases:
1 Quality of the neighborhood 2 Convenience to work 3 Affordability of the home

single men

WHAT BUYERS NEED HELP WITH MOST FROM THEIR REAL ESTATE AgENT: finding the right home negotiating the terms of the sale negotiating the price Completing the paperwork

8%

of buyers did not make any compromises when purchasing their home

More than

unmarried couples

1%
other

19% 19%

compromised on price compromised on size

59%

married couples

The average buyer searched for

12 weeks
The average buyer viewed

12 homes

Buyers wont compromise on storage space!

14%

of buyers own 2 or more homes

Repeat buyers plan to hold their property for

15 years

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first-tiMe hoMe Buyer faCts

50%

2010

PERCENTAgE OF BUYERS WHO WERE FIRST-TIME HOME BUYERS:

First-time home buyers plan to stay in their home for

MEDIAN PRICE PAID: First-time buyers

47%

2009

41%

2008

10 years
93%

$152,000
Repeat buyers

of first-time home buyers used the first-time buyer tax credit

$215,000

First-time buyers searched an average of longer than repeat buyers

2 weeks
The average income of a first-time home buyer was

$59,900

The average square footage of a first-time home buyers house was

1,540
And cost

30

Typical age of first-time home buyer

$152,000

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seLLer faCts, trends & deMograPhiCs

The median age of a seller is

49

The typical home sold for

MEDIAN HOME PRICE RECEIvED BY SELLERS: Sold using a real estate agent Sold directly by the owner

The typical seller has owned their home for

96%

$199,300 $140,000

8 years

of the final listing price

The median time for a home on the market was

8 weeks
OF SELLERS:

(down from 10 weeks in 2009)

43%

of sellers did not reduce their asking price

93% of sellers listed their home on

an MLS Sellers generally move about from their previous home

27% reduced it only once

21%
home was too small

SELLERS MOTIvATION FOR MOvINg:

50% 28% 21%

traded up bought a comparably sized home traded down

18 miles

15%
Sale Price Increase $1,990 $1,550 $2,194 $1,932 $1,505

job relocation TOP 5 HOME IMPROvEMENT PROjECTS WITH BEST RETURN ON INvESTMENT:
Project Cleaning & De-cluttering Lightening & Brightening Home Staging Landscaping Repairing Electrical or Plumbing Cost to Homeowner $290 $375 $550 $540 $535 Return on Investment

586% 313% 299% 258% 181%

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transaCtion & inCoMe inforMation

In 2009, the average gross income of a REALTOR was

reaL estate agent faCts

$35,500

80% 91% 93% 78% 60% 11%

In 2010, Buffini & Company One2One Coaching Members earned an average gross commission of

of REALTORS do not have a personal assistant own a home use email every day use a smart phone every day have a website dont have a website but plan to develop one in the future have a real estate blog

OF REALTORS:

76%
work full-time

nearly 40% of REALTORS

reported gross incomes below $25,000 and only 16% reported incomes of $100,000 or more

24%
work part-time

In 2009, real estate agents closed an average of

7 transactions
REALTOR EARNINgS COMPARISON: 16 years or more experience

REALTORS spend about

5 years
with a company

$52,300
2 years or less experience

$8,800

10%

$180,542
and closed an average of transactions

50%

22

of REALTORS use social media

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reaL estate in the neW era

There are approximately

80 million
Echo Boomers What is an echo Boomer?

EARNINg POWER COMPARED:

More than

of builders expect to do away with formal living rooms and the number of houses with 3 or more bathrooms and 4 bedrooms is dwindling DECLINE OF NEWSPAPER ADvERTISEMENTS AMONg SELLERS WITH AN AgENT:

80%

16%

In 2011, as Echo Boomers move into the housing market, multi-family home starts are forecast to rise

Considered the children of Baby Boomers, Echo Boomers are people between the ages of 18 and 31 Baby Boomers Echo Boomers

37%

2009

$125

97%

of them use social networking sites like facebook, Linkedin, and twitter every day

Billion

$200
Billion
of buyers use the internet to search for homes

28%

2010

89%

40%

of them dont have a land line

85%

Social networking websites more than doubled their prevalence as a resource in 2010

of buyers using the internet to search for a home purchased through a real estate agent

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90%

Why Working By referraL Works

Each year, people share their opinions and recommendations about a brand, company or service provider

of consumers worldwide are most likely to trust the recommendations of the people they know

500 billion times

84% 64%

of sellers would recommend their agent or use the agents services again in the future of buyers chose their real estate agent based on a referral, or had worked with their agent in a previous transaction

There is no lead more powerful than one referred from someone you knowsomeone who knows you, trusts you and will put their name to you. Brian Buffini

35% 66%

of people feel reputation is the most important factor when choosing an agent

of sellers contacted only one agent Staying in constant contact with your database will keep you at the forefront of their mind!

90%

of buyers would recommend their agent to others A referral from a friend, neighbor or relative is the most common method sellers use to find their real estate agent

only 36% of REALTORS have generated

some business from holding an open house, a traditional, transactional lead-generation activity

61% 0 to 5 leads
of REALTORSgenerated

From their website,