This past election was a confirmation once again of the accuracy of political polling. As much as some of us resent the intrusion of strangers surveying our inner feelings, sampling public opinion has become a frequent occurrence on all manner of topics. In the case of the presidential race, the 35 major national pollsters averaged 98 percent accuracy in predicting Obama over Romney. For instance, Google Consumer Survey was showing Obama ahead by 2.3 percent on Election Day. He actually finished up 2.6 percent.
In addition to polling for political candidates, corporations and almost all organizations are continuously taking surveys to discover how folks feel about their services or products. That information, market research, is shared selectively with top management and when it’s favorable, the results are released by the public relations department.
The National Association of Realtors conducts several surveys each year. The most recent (Profile of Home Buyers and Sellers) involved 93,000 consumers who had sold or purchased homes during the last 12 months. Here is a couple of intriguing discoveries.
Last year first-time buyers made up about 39 percent of all sales. That percentage has been consistently declining from 50 percent in 2010. This last October and November the percentage dropped even lower to 35 percent. So why are so many first-time homebuyers missing out on the best opportunity in history to buy a home?
First timers face stiff competition from “all cash” investors who are buying rentals in that entry-level price range. When sellers have a choice between selling to an investor or risking their sale to a buyer that has never qualified for a mortgage and that’s subject to an appraisal, they are going with the investor. The demographic age group of entry-level buyers has also been hit hardest by the recession. Employment opportunities have stiff competition from more experienced workers and those fortunate to find employment are often burdened by debts, including student loans. And while the Fed is aggressively seeking loan modifications for financially troubled existing borrowers, loan qualifications are increasing for new mortgage applicants.
Homebuyers are searching for homes differently than a few years ago. In the 2003 survey, 42 percent of homebuyer said they frequently used the Internet in their home search. That’s jumped to 79 percent. In fact, 47 percent of all buyers found their house on the Internet while only 33 percent said their agent located the home they purchased. The Internet has replaced agents as the primary locators of homes.
Despite all the hoopla about using social networking sites such as Facebook and Twitter, only 1 percent of buyers used them as a source of information about available properties and only 1 percent used video hosting sites such as YouTube.
In addition to polling buyers and sellers, Realtors survey Realtors. There are about 1 million Realtors around the county and about 60,000 responded to the Member Profile Survey.
The typical Realtor is a white female, who attended college, is a homeowner, works 40 hours a week and last year did 10 transactions. That was up from eight deals the year before. The typical income from those 10 deals was $35,000 which calculates out to around $15 to $18 an hour depending upon time off. The median gross income of Realtor households was $94,000, so most Realtor households have at least two-incomes. Only 45 percent of respondents said real estate was their sole source of household income.
Although 60 percent of all Realtors are female, I suspect the sales numbers for California Realtors are a bit different from the respondents nationally. There is no easy way to track the exact numbers but assuming that Realtors in El Dorado County sell most properties in the county, the average number of transactional sides per agent is less than six. However, with the average selling price of a home around $300,000 and after co-operating broker and in-office commission splits, the average agent’s check would be around $6,000 for a yearly income a bit higher than the national respondents.
Naturally, some do better than others. Seventeen percent of Realtors reported incomes greater than $100,000. There is a direct correlation between the number of years in the business and income. Most Realtors have 11 years experience and those with 16 or more years report an income of $50,000 while those with less than two years make less than $10,000.
The L.A. Times recently released the results of a survey not very complimentary to mortgage lenders. Carlisle & Gallagher found that about half of all mortgage applicants had a poor experience when applying for a mortgage loan. More than half said the service was too slow. A third said it was impossible to track the status of their loan application, an equal number said it was difficult to talk with their lender and 25 percent didn’t believe the advice they received. Respondents ranked Internet lenders worse than local community lenders and 34 percent said they would have paid a higher interest rate for better service.
In our “all about me society” we can learn much from asking others questions about how they feel and what’s going on in their lives. We are likely to discover that as President John F. Kennedy said, “What unites us is far greater than what divides us.”
Ken Calhoon is a real estate broker in El Dorado County. He can be reached through his Website at kencalhoon.com.