The Internet and technology are rapidly changing the real estate industry. A new study by the National Association of Realtors underscores just how much things are changing.
The real estate study, one of the largest of its kind ever conducted, shows that use of the Internet to search for a home has increased dramatically, from 2 percent of buyers a decade ago to 77% in 2005. That’s up from 74% in 2004.
When asked where they learned about the home they ultimately purchased, 24% of buyers in the study pointed to the Internet, an increase from 15% a year ago and 2% in 1997.
The study revealed a number of other interesting findings, such as:
1. While a growing number of people first hear about their homes on the Internet, 36% still learn about their home from an agent and 15% from a yard sign.
2. For-sale-by-owner transactions continue to decline with just 13 percent of sellers conducting transactions in 2005 without the help of a real estate professional. Nearly half of those were private sales between two parties who knew each other.
3. The median sale price nationwide for sellers who used an agent was 16 percent higher than the price for a home sold directly by the owner.
4. Typical buyers walked through nine properties and searched eight weeks before buying. They also moved at least 12 miles away from their previous residence.
5. Typical sellers listed their home for four weeks, had lived in it for six years and moved at least 15 miles to their new residence.
6. Married couples accounted for 61 percent of transactions, and single women outpaced single men as homebuyers, 21 percent to 9 percent.
7. Four out of ten buyers surveyed were first-timers, and the median age of entry-level buyers was 32, with household income of $57,200. Such buyers made an average down payment of 2 percent, but 43 percent purchased with no money down.
·8. Typical repeat buyers were age 46 and had a household income of $83,200. They placed a down payment of 21 percent, but 11 percent paid cash for their home.
The study provides a glimpse into the behavior of today’s buyers and sellers and underscores the growing trend of Internet use. What does this mean for professional real estate agents?
Not too long ago, some industry observers believed that the growth of the Internet would put real estate agents out of business. Reports demonstrate just the opposite. Membership in the National Association of Realtors has grown sharply, and use of the Internet appears to have encouraged more, not fewer, consumers to turn to real estate agents. A recent study by the California Association of Realtors reported that there is now one licensed real estate agent for every seven residents in the state of California!
A whopping 81 percent of buyers who use the Internet end up purchasing through a licensed professional, and nine out of ten homebuyers overall still use an agent in the search process, the association study found.
The real estate industry is evolving as a result of changing technology and consumer expectations. Today’s real estate company and agent bear little resemblance to those of a decade ago.
Investing in the Internet and technology is no longer an option for the real estate professional. In an industry that seems to be moving faster and faster, successful individuals and companies must keep deploying the latest technology. Their consumers should expect nothing less!
Caroline Jensen is a Real Estate Broker with Coldwell Banker in Sacramento, Ca. She is one of a select few REALTORS to earn e-PRO (real estate technology) certification by the National Association of REALTORS. Currently, only 1 percent of the nation’s 1 million REALTORS are e-PRO certified.