The California Association of Realtors has been tracking the behavior of homebuyers online since 2000, when it issued its first ground-breaking report, "Internet VS Traditional Buyers." What's changed? They're using the Internet more than ever.
Realtors should be marketing-alert to the fact that traditional buyers are declining from 72 percent in 2000 to 44 percent in 2004.
More than half (56 percent) of all consumers now use the Internet when buying a home, according to C.A.R's "2004 Internet Versus Traditional Buyer Study," which is up from 28 percent in 2000. It's no surprise, considering the National Association of Realtors is tracking similar Internet adoption rates nationally.
Like previous surveys, the 2004 edition also found that, compared to traditional buyers, Internet buyers spent more than twice as much time gathering information prior to contacting a REALTOR®. However, they moved much more quickly once they began to work with a Realtor, spending significantly less time with their Realtor and previewing far fewer homes than traditional buyers.
With one out of six homes sold in the U.S. located in California, consumer homebuying behavior is important to know.
"The Internet has complemented rather than diminished Realtors' role in the homebuying transaction," said C.A.R. President Ann Pettijohn. "While Internet buyers considered online information to be valuable, they ultimately turned to Realtors both for their interpretation of that information, and for their expertise and judgment throughout the homebuying process. The expertise and professional advice provided by Realtors creates value over and above the market and property information itself, even when the buyers obtain that information on their own.
Internet buyers were more inclined to view Realtors as partners, suggests Pettijohn.
"They looked for speed and efficiency, and they valued timely communications. Traditional buyers, on the other hand, looked for more personal interaction and relied on their Realtors to lead them through the process."
The average number of homes previewed by Internet homebuyers has decreased steadily in the past four years, while that of traditional buyers has changed very little over the same period. The up-front research conducted by Internet buyers has given them a better sense of market conditions compared to traditional buyers, suggests the survey, enabling them to act more quickly to find, bid on, and close escrow on the home of their choice.
Other highlights of the survey include:
- Internet buyers spent an average of 5.9 weeks considering the purchase of a home before contacting a Realtor, compared to 2.1 weeks for traditional buyers.
- Internet buyers spent an average of 4.8 weeks investigating homes and neighborhoods prior to contacting a Realtor, compared to 1.6 weeks for traditional buyers.
- Better researched than their traditional buyer counterparts, Internet buyers spent less time looking for a home once they began working with a Realtor, spending just 1.9 weeks on average, compared to 7.1 weeks for a traditional buyer.
- The typical Internet buyer also visited fewer homes with their Realtor than the typical traditional buyer. Internet buyers visited an average of 6.1 homes with their Realtor, whereas a typical traditional buyer visited 15.4 homes with their Realtor.
- Internet buyers tended to be younger than traditional buyers with a mean age of 38.5 years, compared to 43.5 years for traditional buyers.
- Internet buyers had higher incomes and were better educated than traditional buyers. The median income of an Internet buyer in 2004 was $168,540 while that of a traditional buyer was $142,470. Moreover, while most homebuyers in both groups had at least a four-year college degree, 14 percent of Internet buyers had completed post-graduate work compared to 5 percent of traditional buyers.
- Internet buyers were three times more likely to be first-time buyers than traditional buyers, with 23 percent of Internet respondents reporting that they were first-time buyers compared to 7 percent of traditional buyers.
- Internet buyers often conducted their home searches from afar, with a median distance of 100 miles between the homes they purchased and their previous residences, compared to 12 miles for the traditional buyer. More than four out of five traditional buyers purchased homes within 25 miles of their prior residence.
As pointed out in previous surveys, Realtors who want to reach Internet buyers and are willing to nurture them through their investigative period while they search the Internet for information are more likely to capture the buyer as a client when he or she is ready to buy a home.