What features make home buyers willing to pay more? Is energy-efficiency important to house hunters? Will living in a gated community attract more buyers or keep them away? Joel Cone of Auction.com looks at the buyer preferences that are shaping the market.
Whether it is a new or existing home, for buyers in the post-Great Recession market, real estate is still first and foremost about location. After that, the buyer’s individual (or family) dynamics kick in when it comes to the home features they prefer. And with the help of modern technology, buyer preferences have definitely changed.
While crime rates, shopping malls and restaurants, local entertainment or places of worship may be part of the equation in determining where a buyer wants to live, the layout and features being offered on the interior are playing a greater role than ever before.
Due to the advent of the internet and cable television, buyers have numerous resources available to help in their home buying decision. From interior design and real estate websites, to real estate-oriented television shows on both major and cable networks such as HGTV, home buyers can do more research on their own before ever beginning their home search.
“Buyers are smarter now because of the internet and all these television shows. They walk into a property after watching shows like Kitchen Crashers last night and see a lot of these things already done,” said Realtor Brandon Carey with Ascent Real Estate in San Diego, Calif. “Now it’s a trigger in their mind that it’s the right property for them. If these homes already have these items taken care of, that’s a no brainer for them.”
The proliferation of these websites and television shows is making buyers smarter about the products that are being used in homes. Because of that information, certain things they like stick out to them. Things like the type of flooring, cabinets and countertops that were used in the kitchen.
In San Diego in particular, Carey and his design people are noticing a trend towards open floorplans, clean lines, and the popularity of the color gray at the moment. Particularly home remodelers and investors who flip homes are using a lot of gray these days in kitchens and in bathrooms, he noted.
Two of the nation’s largest real estate organizations – the National Association of Realtors and the National Association of Home Builders – conducted surveys on buyer preferences that were released last year. Here are some highlights from their respective results.
Based on a survey of homebuyers between 2010 and 2012, the National Association of Realtors’ 2013 Home Features Survey reported:
- The typical home purchased was 1,860 square-feet and was built in 1996
- The average home bought had three bedrooms and two full bathrooms
- Repeat buyers, buyers of new homes, married couples and families with children typically bought larger homes
- First-time buyers and single women tended to buy older homes
- Slightly more than half of the homes purchased were single level
- Single women placed higher importance on single-level homes, while single men wanted finished basements
- More than three-quarters of all buyers purchased a home with a garage
- Among 33 home features surveyed, central air conditioning was the most important feature to most buyers, followed by a walk-in closet in the master bedroom, a home that was cable-, satellite- and/or internet-ready, and an en-suite master bathroom
- New kitchen appliances were more important to single men and married couples than to other buyers
From a regional perspective, the study showed that:
- Southerners tend to buy newer homes and place higher importance on central air conditioning
- Garages were more important to new home buyers, Midwesterners and suburbanites
- Basements were more popular among buyers in the Midwest and Northeast
- Northeastern buyers also valued hardwood floors more than buyers in other regions of the country
- Buyers in the Northeast put more value on homes with a dining room than a living room
A majority of buyers were willing to spend more money on a home in order to have:
- Central air conditioning
- New kitchen appliances
- A walk-in closet
Buyers placed the highest dollar value on:
- Waterfront homes
- Homes that were less than five years old
Rooms that buyers were willing to pay the most for:
- A basement
- An in-law suite
Most important rooms for buyers to have in a home:
- Laundry room
- Den/study/home office/library
Ninety-seven percent of recent buyers were satisfied with their home purchase, the study noted.
“Most satisfied homeowners still said they would like more or larger closets and storage space. In addition, nearly half of recent buyers would prefer a larger kitchen, and two out of five would prefer a larger home overall,” said NAR Vice President of Research Paul Bishop.
Within three months of a home purchase, 53 percent of buyers undertook a home improvement project, the report added.
As for the homebuilders, the NAHB conducted its 2012 survey in two phases: the first phase used screening questions to identify recent home buyers who purchased in the past three years as well as home buyers looking to buy in the next three years. The second phase consisted of a detailed questionnaire given to those two identified groups of home buyers.
Here’s some of the highlights of the NAHB findings reported in 2013:
- Just over half of all home buyers would like to buy a new home
- Buyers expected to pay about $203,900 for their next home
- Buyers want a home with an average 2,226 square-feet
- For 25 percent of the buyers the size of the lot was not important
- Nearly half wanted three bedrooms with 32 percent wanting four
- More than half of the buyers surveyed wanted a single-level home
- Two-thirds of the buyers wanted a full or partial basement
- Nearly half of the buyers who wanted a two-story home wanted the master bedroom on the second floor, and the washer and dryer on the first floor
- Living space and the number of rooms was important to about two-thirds of buyers
- Buyers tended to focus on the quality and appearance of components such as doors, cabinets, countertops
- Quality and brand name was important for appliances
The study showed that when it came to the most desirable features in a home, buyers were most interested in two themes in their homes:
- Energy efficiency – energy star-rated appliances and windows
- Organization and storage – particularly a laundry room and garage storage
Among the most unwanted features were:
- Being located in a gated community
- Being located in a golf community
- A two story family room
- Wet bar and wine cooler
- Ceramic tile countertops
Accessibility features found most desirable by buyers were:
- Full bath on the main floor
- Doorways at least 3 feet wide
- An entrance without steps
- Lower kitchen cabinets
Half of all home buyers want amenities such as electronic systems and technology features included in the base price. As for technology features, few buyers have them but many want them in their next home.
Although the majority of buyers are concerned about the environment, most are not willing to pay more for a “greener” house.
Among the many demographics in the survey race and ethnicity can play a significant role in how a buyer evaluates the features of a particular home.
After controlling for age, income and household type, the survey showed:
- Hispanics and African Americans want more bedrooms
- Among the four ethnic groups studied (White, Hispanic, African American and Asian) all would be satisfied with up to 2½ baths
- Most buyers in all four groups want high ceilings on the first floor
- They also want the washer and dryer on the first floor
- Two car garages are the most popular parking option
“Both the NAR and NAHB survey results point to home buyers looking for homes built after 1995 with three bedrooms and two bathrooms in 1,500 square-feet of space or larger. Thus it comes as no surprise that these are the types of properties real estate investors are seeking in order to either flip or buy and hold as rental properties,” said Rick Sharga, Executive Vice President at auction.com.
Whether it is an existing home or a new home a buyer is interested in purchasing, the availability of newer materials and designs, as well as technology give today’s home buyers more choices than ever before. And they have definite opinions on what features they would prefer to have included in their next home.
What features do you desire most in a new home?
Joel Cone is a freelance writer based in south Orange County, California. For nearly a quarter century Joel’s career — both as a journalist and as a marketing communications specialist — has focused on the residential and commercial real estate industries, as well as the legal community. After a decade as a staff writer for the Daily Journal Corp. group of newspapers, Joel was a regular contributor to California Real Estate magazine for the California Association of Realtors; was the original Orange County reporter for GlobeSt.com; wrote executive profiles for OC Metro magazine; and has been published in a number of real estate-related publications.