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2011 CONSUMER MARKET ASSESSMENT
March 2011
Prudential Real Estate
Global Communications
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Survey Background
Objective:
Gather current insights on the factors impacting buyer/seller real estate decisions in today’s economy.
Methodology:
The study was conducted as an online survey among a national random sample of Americans.
Respondents are aged 25-64 with a household income of at least $50,000, and either they recently bought/sold a home or they are considering to buy/sell a home.
Total Respondents: 1,253
Target sample of Americans “in the market” for buying or selling a home
500 “Recent Transactors” – Bought/sold home within the last year
500 “Likely Transactors” – Indicated they are likely to buy/sell home within next year
253 “Contemplators” – Considered buying/selling within last year, but did not
Total data are straight averages and not weighted to reflect all Americans
Survey Period: January 20 – 27, 2011
Survey developed by Prudential Real Estate and Relocation Services and Prudential Global Market Research
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Optimism about the market is guarded
• Agree volatility of U.S. economy makes them cautious about investing in a new home at this time
68%
• Have confidence that recovery of real estate market and property values will happen in next year or two
68%
• Believe that real estate is a good investment despite the market volatility of the past few years
86%
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49%
47%
59%
89%
House-hunters recognize a good opportunity
Think: It is a good time to buy
Feel: Cautiously optimistic about buying or selling a home in today’s market
Agree: Excited about buying a home due to momentum of economic recovery
Agree: Even though my house is worth less, I know I can buy a new house at a lower price
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Americans striving to “move up” is a driving force;Yet opportunities abound in all segments
34%
21%
45%Move up
Scale down
Stay same
Overall goal in buying/sellingBased on Total Respondents
Among those who want to “move up”
64% More space or property
57% Good time to buy
49% Nicer house
41% Better neighborhood
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Challenges of a complex market inhibit actions
Practical• Just haven’t
found the home I want yet
• Waiting for right opportunity
• Lack of focus/time
Economy• Worry home values
haven’t stopped dropping
• Instability of economy
• Worry about not being able to sell current home
• Not confident in setting right price for home
• Worry about employment
Personal Finance• Trying to save
more money• Not sure about
finances
• Nervous about new mortgage
Reasons that contemplators have not yet bought or sold home…
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Challenging the logic of “buyers are sellers”
58%61%
More interested in buying
Less interested in selling
Yet
Impact of the recession on consideration to buy or sell a homeBased on Total Respondents
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Emotions run high with the thought of selling
77%
67%
60%
58%
Uncertainty of selling existing home in order to afford new home is a big concern
Won’t buy new home until confident I can sell existing home at fair price and in timely way
I feel my home is worth more than what real estate agents tell me
Rationally understand good time to buy, but my emotions and concerns hold me back
Based on Likely Transactors and Contemplators
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In reality, very few show sellers remorse – even in a down market 78% are satisfied with recent sale
“I regret selling my home in the past year”
Feeling about final price paid in sale of home:
Resentful, as I did not get what my house was really worth
A bit disappointed about price
Mostly just grateful that I was able to sell my home at all given the market conditions
Very satisfied with the final price paid in the recent sale of my home 32%
46%
16%
6%
11%
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• For me personally, I see pricing as one of the greater challenges in selling a home
90%Agree
• I think the marketing of my home is one of the greatest challenges faced in trying to sell a home
88%Agree
The greatest challenges of selling…
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Buyer and sellers are humbled by market conditions
8%
33%
54%
5%Novice
Amateur
Self-reported level of knowledge of residential real estate market
Based on Total Respondents
Expert
Semi-Pro
92% agree: Given the dynamics and challenges of today’s real estate market, it is more important than ever to work with a good Realtor® for the best success in buying or selling a home
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93% 65%
Despite guidance of agents, many stick to their guns
I believe I can rely on a professional real estate agent to help me price my home competitively
I am not willing to compromise on pricing until after I market my home at the price I want
Based on respondents who did/want to sell
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Rational philosophy of pricing often becomes clouded by emotion and doubts
Higher Price
Reduce visits Confuse expectations
Raise doubt as to worth
Limit bid activity
At market or below
Attracts more visitors
Meets expectations
Offers buyer flexibility
Draws more bids
In Evaluating Concept of Pricing a Home…
96% Agree this concept makes sense
63% Would still be inclined to price home above market averages
61% Would need agent or evidence to better convince them of this claim
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Sellers may need to be carefully coached to be more realistic about pricing strategy
47%26%
53%74%
Price right at or slightly below market, hoping to attract more visits, bids, etc
Price slightly higher than market, hoping to find buyer willing to pay more
Many homes could meet my needs, I’d rather get a good price
Willing to pay top of the market for home that specifically suits my needs
Strategy when…
Selling a Home Buying a Home
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Real estate agents seen as “helpful”; today’s market presents prime opportunity to prove “vital”
24%
60%
15%I could not navigate today’s real estate market without agent
A good agent is very important in helping me successfully buy/sell home
Agent is helpful, but not imperative