Current Trends in Real Estate: Online Home Buying
Some of the most interesting research undertaken by the National Association of Realtors (NAR) in the US is its annual survey of home buyers and sellers, which reveals the biggest current trends in real estate, and especially how buyers go about finding their new homes.
“Similar research results are not available for the SA market, but our own observations suggest that this is pretty much how local buyers are behaving too, and that sellers increasingly need to ensure that their agents are using the best online and mobile-friendly marketing platforms - and using them well,” says Davel.
This is according to Jan Davel, MD of the RealNet estate agency group, who says for example, the recently-released 2015 Profile of Home Buyers and Sellers shows that in the US, first-time home buyers now make up just 32% of the market - despite the fact that interest rates in the US have been at record lows for several years, and that this percentage is still on a declining trend.
By contrast, first-time buyers still make up between 40% and 50% of the market in South Africa - depending on whose statistics you read - in spite of slow economic growth, high unemployment, higher interest rates than in the US and the tight lending criteria that have prevailed for the last few years.
Davel says this discrepancy is probably largely due to the fact that such a large percentage of the SA population is under-35, and that so many of these young people still aspire to buy a home of their own.
“This is a major positive for our market because it means that we still have a relatively large number of fresh entrants to our market every year and it continues to grow in numbers of home sales - even if price growth is sometimes slow.”
Davel says meanwhile, when it comes to the home search process, the NAR survey shows that:
- 77% of buyers now use the internet frequently during the search process, compared to only 42% in 2003, and 42% go there first when they start looking for a home.
- Even though mobile and independent web searches are growing, 68% of buyers still seek information and help from estate agents, although only 14% consulted an agent as their first step in the home search process.
- More buyers are using apps and accessing online listings via a smart device, mostly phone or tablets, with 41% of buyers stating they used this method in 2015.
- 13% of those who eventually buy spend a lot of time online researching the actual home purchase process before even looking at listings.
“Similar research results are not available for the SA market, but our own observations suggest that this is pretty much how local buyers are behaving too, and that sellers increasingly need to ensure that their agents are using the best online and mobile-friendly marketing platforms - and using them well,” says Davel.
In this regard, he says it is interesting to note that 44% of buyers in the NAR survey said they first saw the home that they ultimately bought online, while only 33% found the home they bought through an agent.
“This is absolutely not to say that most buyers bought their homes through the internet, or that we can expect that to start happening,” he says.
“The typical scenario would be that a prospective buyer sees the home on the internet, and then contacts the agent to arrange to see it and possibly buy it.
In fact, the NAR survey also showed that 88% of those who used the internet to search for listings they liked eventually purchased their home through an agent.
“It does, however, underline the rapidly increasing importance of online marketing and the agent’s ability to respond to online enquiries,” says Davel.