Realty Times February 13, 2002

Browsing For Housing Bridges Digital Divide
by Broderick Perkins

Technology may be leveling the playing field when it comes to shopping for a home.

Home buyers using the Internet are younger and wealthier than traditional home buyers, but they are also more ethnically diverse, according to the California Association of Realtors.

CAR's "2002 Internet versus Traditional Buyer Study," found that 30 percent of all Internet buyers were of Asian decent, compared to 19 percent of traditional buyers; 18 percent were of Hispanic/Latin American decent compared to 16 percent of traditional buyers; and African American and Indian ethnic groups made up the remaining 6 percent of Internet buyers compared to 5 percent of traditional buyers.

"I think the diversity aspect ties into the younger aspect. A Harvard study shows how immigrants have a higher propensity to become a home owner faster. There are studies focusing on the Asian population feeling more comfortable using the Internet. The breakdown of people on the Net buying homes is much more representative of the state's population. It's a democratization through the Internet," said Leslie Appleton-Young, CAR's chief economist.

"I don't really know why, but those are some of the things I thought about when I saw the data," she added.

The diversity findings shouldn't come as a surprise. Ethnic groups have enjoyed faster growth rates in both home ownership and technology use in recent years.

Nationwide, ethnic groups accounted for 27 percent of the growth in home ownership in the 1980s compared to 73 percent for whites. By the 1990s ethnic groups accounted for 40 percent of the growth and 60 percent for whites, according to the Fannie Mae Foundation.

While the percent of whites using the Internet more than doubled from 25.3 percent in October 1997 to 59.9 percent in September 2001, blacks' use tripled from 13.2 percent to 39.8 percent, Latinos' use was up nearly as much, from 11 percent to 31.6 percent and, at 60.9 percent, a greater percentage of Asians are online than any group, according to "A Nation Online: How Americans Are Expanding Their Use Of The Internet" from the U.S. Commerce Department.

Buyers of all races in California browsing for housing spent significantly less time looking at homes for sale prior to making a purchase and they looked at far fewer homes prior to making a purchase than traditional buyers.

Internet users surfing listings online also felt that they were more in control of the home buying process than were traditional buyers, according to CAR.

"The Internet is democratizing the home buying process," said CAR president Robert Bailey.

"The Internet also is leveling the playing field for consumers and more accurately reflects the ethnically diverse population of California," Bailey said.

"While the largest ethnic group among Internet buyers was Caucasian (46 percent), they made up 60 percent of traditional buyers," he said.

Earlier this year, CAR randomly surveyed by telephone 300 Internet home buyers and 300 traditional home buyers who had purchased a home in the second half of 2001. The survey's margin of error was plus or minus 5.8 percent at a 95 percent confidence level.

As previous surveys found, the recent survey said home buyers using the Internet devoted more time to researching and investigating their home buying options early in the home buying process than did traditional buyers.

While Internet buyers spent an average of 5.8 weeks contemplating their home purchase before contacting a REALTOR(R), almost four weeks more than the traditional buyer. Internet buyers also spent 4.5 weeks investigating the market before contacting an agent, almost three weeks longer than the average time spent by traditional buyers.

The extra study paid off in terms of honing the search.

"Internet buyers saw significantly fewer homes in their home search than traditional buyers. While traditional buyers went to see an average of 15.2 homes, Internet buyers saw about half as many (7.5 homes)," Bailey said.

Other key CAR findings included:

  • Sixty-five percent of Internet buyers and 67 percent of traditional buyers received a four-year degree. However, 12 percent of Internet buyers received a postgraduate degree, compared to 3 percent of traditional buyers.

  • Sixty-six percent of Internet buyers earned an annual salary of $150,000 or more, compared to 39 percent of traditional buyers.

  • The median age of buyers using the Internet was 37 years, 6 years younger than the median age for traditional buyers.

  • Internet buyers purchased homes at the median price of $452,000, compared to $310,000 for traditional buyers.

  • Seventy-three percent of Internet buyers also surfed the Net for a real estate agent and 79 percent of Internet buyers found their real estate agent online. Most traditional buyers found their agent through traditional farming activities, including brochures, flyers, and mailers (44 percent) and referrals (19 percent).

  • The top three Web site types visited by Internet buyers during the home buying process were real estate companies' Web sites (82 percent), Realtor.com (73 percent), and individual real estate agents' Web sites (67 percent).

  • Most Internet buyers (88 percent) primarily used e-mail to stay in touch with their real estate agent. Traditional buyers primarily used the telephone and in-person contact.

  • A higher proportion of Internet buyers, 11 percent, were first-time home buyers, compared to 6 percent of traditional buyers.


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