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Key Takeaways From NAR's 2021 Profile of Homebuyers and Sellers
December 31, 2021

Key Takeaways From NAR's 2021 Profile of Homebuyers and Sellers

by The CE Shop Team

NAR’s Annual Report Offers Could Help Real Estate Agents Succeed in 2022

The National Association of REALTORSⓇ (NAR) recently released its 2021 Profile of Homebuyers and Sellers, which is the 40th-anniversary edition. This annual industry report provides valuable insights on categories including the common characteristics of homebuyers, characteristics of homes purchased, the home search process, homebuying and real estate professionals, financing the home purchase, home sellers and their selling experience, home selling and real estate professionals, and For Sale By Owner (FSBO) sellers. 

NAR’s 2021 Profile of Homebuyers and Sellers

The 2021 report details the unique ins and outs of a pandemic-fueled real estate market, from eager first-time buyers to cash offers. Here are some of the key takeaways, so you can step into the new year with the most up-to-date market knowledge. 

First-Time Buyers Reign Supreme

Once again, first-time homebuyers made up the largest portion of buyers in the market. In 2021, 34% of buyers fell into this category, up from 31% the previous year. The average first-timer was roughly 33 years old, and 65% of this demographic cited a desire to own their own home as the primary reason for purchasing. 

When looking at buyers on the whole, 60% were married couples, 19% were single females, 9% were single males, and another 9% were unmarried couples. Of these, 14% were veterans and 3% were active-duty service members.

Further, 82% of buyers self-identified as White/Caucasian, 7% as Hispanic/Latino, 6% as Asian/Pacific Islander, 6% as Black/African American, and 2% as Other. In the same vein, 89% of buyers identified as heterosexual, 4% as gay or lesbian, and 2% as bisexual. Both metrics signal an opportunity for diversity and inclusion in real estate as we head into the new year.

Most Purchases Were Over Asking Price

Amid 2021’s red-hot real estate market, it was hardly a surprise that homes frequently sold well above asking price. In fact, one hopeful Portland buyer reportedly bid $1 million over asking price while others waived home inspections or even pledged to name their first-born child after their seller. NAR’s data backs up these zany anecdotes, with nearly a third of all sellers submitting an offer that went above and beyond asking price. 

Nearly All Buyers Looked Online

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While 41% of all homebuyers took to the web at the outset of their search, all but 5% reported using online tools at some point during the process. When it comes to devices, buyers were equally split, in that 50% favored desktops and laptops for Zillow surfing and 50% opted for smartphones.

Technology can’t replace a great agent, though! A staggering 91% of buyers considered their agent to be a good source of information. With your help, the average buyer searched for eight weeks and viewed eight homes before settling on their new house.

The results? A whopping 95% of 2021 buyers reported feeling satisfied with their home search process. Real estate pros, give yourselves a pat on the back!

Referrals Were King

Speaking of successful agents, 2021’s hyper-competitive market drove home the sentiment that referrals are everything in the social world of real estate. While 87% of total buyers chose to purchase through an agent or brokerage, nearly half (47%) found their agent through a friend, neighbor, or relative referral. This stat, combined with the fact that 90% of buyers would use their agent again or recommend them to others, illustrates how critical these long-term relationships are.

Cash Purchases Were Surprisingly Rare

Despite the headlines, cash purchases were, on the whole, relatively rare. A sizable 87% of buyers opted to finance their purchase, with an average down payment amount of 7% for first-time buyers and 17% among repeat buyers. Savings were the primary driver in 61% of down payments, while proceeds from a previous sale made up 56%, and 28% used gift money or a loan from friends and family. 

So, if your resolution includes making more money, perhaps consider expanding into a related vertical like mortgage loan origination. That 87% of buyers will need to get a mortgage from somewhere. Why not from you?

Sellers Sought Friends and Family

The pandemic-fueled real estate market has fundamentally changed how and why Americans choose to move. From wealthy millennials working remotely from mansions in Aspen to exploding tech jobs across Ohio, it can be difficult to determine where consumer preferences might swing next. From NAR’s research, however, it appears that being closer to friends or family isn’t a bad bet. Most sellers (18%) cited this as their primary reason for listing, followed by the desire for a larger home at 17%. 

FSBOs Missed Out

Most agents understand that a For Sale By Owner (FSBO) could use your level of expertise, but in 2021, they appear to have missed the memo. FSBOs accounted for only 7% of total home sales, a record-low since NAR’s Profile of Homebuyers and Sellers launched in 1981. This figure was higher in rural areas (12%) and slightly lower in urban areas (4%).

Plus, not only did this method likely cost the seller time and energy, their sales margins may have suffered. NAR reports that FSBO homes sold for an average of $260,000 last year, which is significantly lower than the $318,000 fetched by agent-assisted homes. That means that you could offer these lucrative but fiscally conservative sellers nearly $60,000 worth of expertise right out of the gate!

New Year, New Real Estate Market

From Zillow surfing to all-cash purchases, the 2021 real estate market was nothing short of remarkable. Luckily, NAR’s extensive Profile of Homebuyers and Sellers offers insight into critical trends, preferences, and tendencies. Take advantage of their data and, as experts begin placing bets on 2022’s outlook, consider reviewing your own facts and figures for a holistic view of the past and a window into the future.

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