Home Buyer Demographics: 5 primary groups:

Local Home Owners:The number of local homeowners that are able to sell their current homes at a price that will enable them to trade-up or trade-down given the leverage they have amassed on their homes is small. This is almost an absentee buyer group in the current market. However-- the ones that have liquidity know what they want (aka: emotion) and will pay up for a home that fits the bill.

Relocating Buyers:Are a key buyer demographic for current local real estate trends as the number of relocating families are a function of the local economy and job market—which drive home prices. If this group is missing, then the location has experienced greater price declines. These are the best buyers in today’s market as they have urgency: their children need decent schools & the bread winner must hit the ground running to assimilate into their new career roles.

Renters turned Buyers:Generally these folks were priced out during the exuberance at the top of the market and have waited years to buy a home. They drive a very hard bargain; think more like investors than home buyers; and will grind sellers down on price all the way until the home closes. Their biggest mistake is often purchasing the wrong home for the right price. Their primary source of data is lowest comps they can find, and always use distressed sales as comps.

First Time Buyers:There aren’t many first time buyers in the current market. A major change in our real estate markets are demographic variations  in the buyer pool: we are in-between home buying generations with GEN ‘Y’ reaching maturity as home buyers in 5-7 years.  These buyers usually start in the low end of the market and slowly trade-up as incomes rise.

Investors:Are looking for the best deal they can get: scouting for cash flow or capital appreciation thru additions and/or remodel. There is no emotional pull for these buyers; they often buy with cash using other kinds of leverage, and look for distressed opportunities.

The “Job Creators”, aka “The 1%”: Typically buy homes at the high end with cash. Interestingly even this group’s buying patterns change with the economy even though their purchasing power is not materially affected-- which is why the high end of the market is so slow right now. These buyers are absolutely value-minded and act more like investors (which they are) unless the home is a MUST-HAVE addition to the family real estate portfolio, in which case they move very fast with conviction.