Price is the number one factor for home buyers, according to the annual Profile of Home Buyers and Sellers recently released by the National Association of Realtors (NAR).
No surprise there—except total purchase price isn’t the overriding factor; more important to buyers is how that price breaks down into monthly carrying costs.
In 2012, buyers’ top five factors were:
• 61% – quality of neighborhood
• 43% – job commute
• 39% – overall affordability
• 35% – convenient to friends/family
• 26% – design of neighborhood
Commuting expenses are “very important” for 37% of this year’s buyers and “somewhat important” for another 29%. In fact, buyers are 50% more likely to compromise on price than on a home’s distance from the office.
That commuting time is nearly as important as overall affordability speaks to buyers’ concerns over carrying costs. Mortgage rates are low and likely to stay that way, but other costs of homeownership are escalating or volatile, so today’s buyers are focusing on those variables.
The NAR’s breakdown of core monthly homeownership expenses found that buyers cited as “very important”:
• 39% – heating and cooling cost
• 24% – energy-efficient appliances
• 24% – energy-efficient lighting
• 11% – landscaping for energy conservation
• 11% – environmentally friendly community features
By way of contrast, the least important factors are:
• 6% – access to public transit (though that was important to 21% of urban buyers)
• 5% – convenient to airport (though that was important to 14% of resort area buyers)
• 5% – ‘green’ features
The bottom line on overall affordability: Document the core budget items for owning the house and when selling, emphasize the cost-efficiency of upgrades.