Every year we take a look at the demographics of buyers and sellers from the previous year, and compare it to buyers and sellers from this year. Each year the demographics shift and change. In general, 2016 to 2017 were similar years, with some tweaks in terms of how quickly a home sold, for what percentage of list price, and in the degree of buyer purchasing power. Here are the demographics of buyers and sellers in 2017.
TYPICAL CHARACTERISTICS OF BUYERS IN 2017
- 34% of buyers were first-time buyers. This is a significant decrease from a few years ago, with 45% of the market being first-timers.
- The typical buyer was 45 years old, with a median household income of $88,800.
- 73% of recent home buyers were couples. For singles, 18% were single females, compared to only 7% of single males.
- Buyers moved within a median of 15 miles between homes.
- Buyers expect to stay in their home 15 years. This is drastically up from 2005, when most buyers expected to stay 5-7 years.
TYPICAL CHARACTERISTICS OF THE HOMES PURCHASED IN 2017
- The typical home purchased in Minnesota in 2017 had 1,870 square feet, 3BR, 2BA and was built in 1991.
- New construction made up 15% of buyer’s home sale choices, while existing homes made up 85%.
- 83% of Minnesota buyers purchased a detached, single-family home.
- The most important factor influencing the homebuying decision was heating/cooling costs. This year, commuting time was not listed as a factor, as it often was in past reports.
- 13% of Minnesota buyers purchased a multi-generational home due to children over the age of 18 moving back into the house, or because of the cost savings associated with the care of aging parents.
- Senior-related housing makes up 13 of the market.
THE HOME SEARCH PROCESS and FINANCING A HOME IN 2017
- 42% of Minnesota home buyers began their home search process online.
- The typical home buyer searched for 10 weeks and viewed 10 homes.
- 88% of buyers financed their home purchase. Of those, the amount financed was 90%, with the exception of first time buyers, who financed 95%.
- 13% of home buyers reported saving for a down payment to be the most difficult part of the process, citing student loans, car payments and credit card debt as their biggest obstacles.
- 83% of buyers reported they view purchasing a home as a good financial investment.
TYPCIAL CHARACTERISTICS OF SELLERS IN 2017
- The typical seller was 55 years old and had a median household income of $103,300.
- The most commonly-cited reason for selling their home was that it was too small (16%,) followed by the desire to move closer to family/friends (14%,) and job relocation (11%.)
- Sellers lived in their home for 10 years before selling. This tenure is up from 2007, when the typical seller lived in their home for only 6 years.
- Minnesota sellers sold their homes for 99% of list price.
- 37% of sellers offered incentives to attract buyers, including paying for closing costs and home warranties.
- In Savage, Shakopee and Prior Lake in particular, the fastest-selling market in 2017 was the $250,000 - $375,000 range.
When comparing the 2017 Profile of Home Buyers and Sellers to 2016, sellers are selling their homes in shorter time periods and for a higher percentage of list price (when a home is priced appropriately.) Married and/or dual head-of-household buyers are seeing experiencing more buying power than single buyers, and female buyers are a strong segment of the singles market relative to males. The buyer demographic is aging and downsizing, as we see more Boomers transition into retirement/maintenance-free living.