With the 2016 Profile, which was released on Halloween and is based on a massive survey of both buyers who have participated in recent residential transactions, NAR celebrated 35 years of annual publication. When the Profile was launched in 1981, Ronald Reagan was inaugurated for his first term, “Raiders of the Lost Ark” opened in theaters and the median value of a home was $55,300. in recent years, the Profile has been the source of information that defines residential real estate today, such as these often-cited findings:
- The percentage of home buyers who used the internet to search for a home increased to 95 percent in 2016 after holding steady at 92 percent for three years in a row.
- Sixty-four percent of sellers found their agent through a referral from a friend, neighbor, or relative or used an agent they had worked with before to buy or sell a home.
- FSBOs typically sell for less than the selling price of other homes; FSBO homes sold at a median of $185,000 last year (down from $210,000 the year prior), and significantly lower than the median of agent-assisted homes at $245,000.
While the venerable NAR Profile set the standard for years as the “go to” source of consumer data, now it has a competitor with some different ideas about what measure and how to present its results. Just a a few weeks before NAR releases its 35th edition, Zillow introduced the first Zillow Group Report on Consumer Housing Trends.
The Zillow report differs in number of ways. It is based on surveys of more than three times as many consumers than the NAR study and includes rentals as sales. Its samples included not just recent but also long-term sellers, buyers, homeowners and renters. Its analysis and discussion of key findings was included a discussion of generational trends.
Here are two interesting findings that give a sense of how the Zillow study takes a generational approach:
- Younger buyers (50 percent of Millennials and 54 percent of Generation X) are significantly more likely than Baby Boomers or the Silent Generation (38 percent and 39 percent, respectively) to consider newly built properties. Nearly half (48 percent) of all buyers are considering new homes.
- The older the buyer, the more likely that buyer is using an agent. Baby Boomers and the Silent Generation rely most heavily on an agent or broker for real estate guidance, with 83 percent and 81 percent respectively citing them as a resource in their home search. Seventy-four percent of Generation X buyers report using an agent, followed by 70 percent of Millennials. When they enlist an agent they do so earlier in the home-search process, shop for a home faster than most older generations, and are more likely to stay in touch with an agent.
Both the NAR and Zillow studies looked at the same issues and came up with different findings, which is to be expect in light of their different methodologies. Some examples of major differences:
- Zillow: Buyers spend 4.2 months on average shopping for a home. NAR: The typical search period took 10 weeks for a buyer to find a home.
- Zillow: Seventy-five percent of buyers hire a real estate agent during the buying process. NAR: Recent home buyers most commonly purchased their homes through a real estate agent or broker at 88 percent.
- Zillow: The average number of agents buyers consider hiring is 2.2. NAR: Nearly seven in 10 buyers interviewed only one real estate agent.
Though using these and other findings from the two studies may complicate life a little for those who like to use simple, definitive numbers, the Zillow study is a valuable and welcome addition the library of quantifiable data available to the residential real estate industry. It’s fresh approach will add depth to our understanding of consumer trends, while the NAR Profile will become even more valuable as a way to track changing behaviors over decades.