By Erica Plemmons
Florida Realtors economist: Buyers and sellers need Realtors for their buying and selling journey. Opportunities exist via connections to past clients and new-home buyers.
ORLANDO, Fla. – Relationships are essential for agents and brokers, according to the 2020 Profile of Home Buyers and Sellers in Florida. Some insights from the survey about Florida’s latest buyers, sellers and their experience in the housing market are shared next, and you can also view a synopsis of the results on Florida Realtors®’ website or download the full report.
On your marks, get set, buy!
Florida buyers lean heavily on the internet when they begin the home buying journey, with 44% “looking online for properties for sale” as their first step. This holds true for one-third (32%) of first-time home buyers, but 16% approached family and friends to discuss the process, compared to only 2% of repeat buyers. These generally younger buyers are looking for guidance from their nearest and dearest. Maintaining contact with past clients could put your name on the tips of their tongue when these conversations arise.
Although buyers may reach for the internet initially, they value real estate agents. Nearly nine in 10 buyers (89%) used real estate agents as a source of information in their home search. But you’ll need to be patient. Typically, buyers search for three weeks before contacting an agent.
Unsurprisingly, Florida’s reputation as a retirement destination rings true with its buyers. The national buyer and seller report found that about one-fifth of all buyers were aged 65 or older. In contrast, nearly one-third of Sunshine State buyers belonged to this age category. Nine percent of Florida buyers cited “retirement” as their primary reason for purchasing a home (5% nationwide).
The median age of Florida homebuyers was higher than the national average and regional statistics at 56. With their age skewing older, Florida’s buyers are more likely to be repeat buyers. Less than a quarter (23%) were first-time buyers compared to 31% across the country.
Many headlines shout “millennials” (born between 1980 and 1996) being in their prime homebuying years. They’re the largest homebuying generation nationwide, though this is not the case for Florida. Still, millennials are the dominant force for Florida’s first-time buyers.
Younger adults, age 18 to 24, made up 3% of all Florida homebuyers in 2020. It may seem like such a small figure to highlight, but it represents a new generation, Gen Z, joining the ranks of homeownership.
Single female buyers are a force to be reckoned with in Florida. In 2020, 21% of buyers were single females, the highest percentage in Florida reports going back to 2012. The majority of buyers are married couples (61%), and unmarried couples and single males represent 9% and 8%, respectively.
What they’re buying
The typical (median) Florida home purchased in 2020 was 1,960 sq. ft. and built in 1999. Three-fourths of Floridians purchased an existing home, while nearly one-fourth (24%) purchased a new home. Florida’s 1-unit building permits in 2020 outnumbered every state except Texas. With limited existing home inventory and some relief on the new-construction side, Floridians took advantage of this option, while nationwide, only 15% of buyers purchased a new home.
With this ratio of existing to new purchases in mind, 85% of Florida buyers used an agent, 12% purchased directly through the builder, and 3% purchased from the previous owner.
New construction buyers may have the misconception that hiring a real estate agent or broker would increase their purchase price. That’s simply not true! Realtors® can be an important advocate for buyers of new construction. Considering marketing how you can help – knowledge of the design center process, negotiating add-ons, experience with walk-throughs, and more – to earn a role with new-home buyers.
Well over half (57%) of Florida homes purchased were in the suburbs. But along with retirees, Florida is known for its fun in the sun. Nine percent bought in resort or recreation areas.
Help! Buyers need an agent
Four out of five buyers (79%) believe a real estate agent is very useful. 85% used one for their transaction, and 89% used an agent or broker as a source of information. But what specifically do they find helpful?
Half of Florida buyers (52%) say “finding the right property” was the hardest step, and it ties directly to what buyers want from their agent – “help to find the right home to purchase” (52%). Two of 10 desire help with negotiations, 11% want help negotiating the terms of sale, and 10% need assistance with price negotiations. Another 8% indicate the biggest role they need agents to play is “help with paperwork.”
With your guidance, buyers can feel confident in their purchase decision. One-third (32%) of Florida buyers felt they made no compromises in purchasing their home. Further, 43% believe they will stay in their homes 16 years or more.
The survey was completed in June 2020, so as competition spurred through the end of 2020, we may see different levels of satisfaction revealed in next year’s survey.
Sellers are motivated by relationships. Fifteen percent (both Florida and U.S.) moved to be closer to family and friends; 14% of Florida sellers moved due to retirement. Additional reasons prompting sellers to list their homes include a change in family situation, home size (both too small and too large), and jobs.
Agents and brokers need to weave their own relationships with sellers. Your foot in the door is connections to their friends, neighbors or relatives. Thirty-eight percent of Florida sellers were introduced to their agent through these sources.
Sellers expect Realtors to provide the full package of services but focus on connection to buyers, price and speed of sale when asked about what they want. The areas where they seek help are marketing to potential buyers (24%), pricing the home competitively (20%), finding a buyer for the home (19%) and selling within a specific timeframe (16%).
Once relationships are formed and needs are met, good results enter the picture for all involved. Those who listed saw success in the price their property received and equity gains. The report found the median sales price compared to listing by price was 98% for Florida sellers, mirroring statistics produced by Florida Realtors using Multiple Listings Service (MLS) data feeds. Additionally, Florida sellers gained $69,500 in equity in 2020, and the equity equated to 35% of the sold price.
It’s easy to be happy with those profit numbers and 91% were “very satisfied” or “somewhat satisfied” with the selling process; 74% would “definitely” and 14% would “probably” use a real estate agent again or recommend one to other sellers. After closing, ask for reviews and referrals, which can lead to opportunities with future sellers.
Connections, connections, connections
Florida checks the box for location, location, location, with options for homes in the suburbs, urban cores, rural outskirts, and resort or recreational destinations. Opportunities abound but consumers need you to connect the dots. Buyers and sellers know the importance of agents and brokers. They seek your expertise and are satisfied with the results. Use your connections with past buyers and sellers to find new clients, then make their home process unforgettable and continue the chain reaction.
Erica Plemmons is an economist and Director of Housing Statistics
© 2020 Florida Realtors®