I had a conversation with a veteran real estate agent yesterday… who shared some interesting insights about the ownership intentions of home buyers. When asked how long they intended to keep their home:
In 2006, prospective buyers answered, “2 to 3 years.”
Buyers in 2007 said, “3 to 5 years.”
2008 shoppers answered, “8 to 10 years.”
And the most common response in 2009: “I’m not sure.”
Implications: Since the advent of the Great Recession back in 2007, people have begun to do something very strange with the houses they buy.
They’re living in them.
My realtor friend explained that fewer buyers are “playing the market,” looking for properties they can “flip” in the short term, or thinking of their house purchase as an investment to be cashed-out in a few years. Instead, they’re looking at their home as a place to live… and a place to enjoy family.
A lot of companies are still focused on price-points as if a discount is the only reason someone might buy. But given this kind of insight, I’m wondering about related purchase priorities.
If we’ll be sticking around for a while, will we be shopping for appliances that will last longer, too? (After all, we won’t be leaving that noisy fridge or washing machine behind as if it is the next owner’s problem!)
Will durability and ease-of-care become a greater priority where furniture purchases are concerned?
Many consumers have been “turning” their homes regularly, trading up and moving on the way people used to buy and sell cars. Will those folks be able to quit “cold turkey?” Perhaps the substitute for home buying will be home improvement… helping consumers who don’t want to (or can’t afford to) sell their home still make their current house “the home of their dreams.”
[Special thanks to friend and former colleague Kevin Sperle for sharing the insights that led to this story.]
Mike Anderson
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