Jun 24, 2019
FAR 261 We have that
Stats
Opening:
How good is that professional
athlete? Well, let’s take a look at his or her stats. What’s the
batting average? What’s the shooting percentage? From 3-point
range? Free Throws? What’s the yards per carry average. What’s the
yards after contact average? What is the average air-speed velocity
of an unladen swallow? Be the first person to write in or call with
that movie reference and I’ll send you a Starbucks gift card.
What’s your miles per gallon? How long is your average daily
commute? On average, how many hours do you spend watching TV every
day? Statistics are all around us all the time. Today I’m going to
BLOW YOUR MIND with a complete set of real estate
statistics.
Yes I studied statistics in
college AND in graduate school. At the graduate level my statistics
course, FED 790, was one of my favorite courses. Not so much
because of the content, but because the professor was one of the
most delightful persons I have ever met. He managed to make a
drudgery topic into a class I looked forward to each week. That’s
no small feat, because when you are digging deeply into research
summaries looking for statistical significance, errors in math,
illogical assumptions, blah blah blah. I won’t make you go through
any of that pain today. In fact, you don’t even have to do the
research. BUT - if you get a copy of the show notes, you will have
clickable links for every stat I’m about to throw at
you.
First let’s do the
news!
News:
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Announcements:
- Lunch
with me every Wednesday. Baraonda
- My
latest article in Forbes is out. bit.ly/findredeals.
- The
FAN is here!
- Would
you like to invest in the Flipping America projects across the
country? Coming soon you will be able to for as little as $100.
That’s right, Flipping America is partnering with Ground Floor
Funding to create a crowd-funded platform where you can invest in
the deals we are doing here. The fund will pay out an 8% preferred
rate of return and can go as high as 16%. You can make money with
me, the Flipping America Guy.
- Flipping America App is in the app store. You
can listen to the show, read the show notes, and the entire catalog
of shows is now available to you. It’s a free download and there
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listen. Go ahead and give it a try and drop me a line and let me
know what you think.
- Want
a quick analytical tool to tell you how strong a potential fix and
flip deal is? Download the Property Grade app. You answer 10 simple
questions about the property and the app instantly tells you what
you can expect to make, your return on investment, your return on
cash, and then the program gives the project a letter grade using
the proprietary Flipping America Investment Property Grade
algorithm.
Topic: Real Estate Statistics!
Between all of the
different real estate terms, types of real estate, and people that make up
each sector, the industry is pretty complicated. To keep things as
simple as possible, we’ve divided up the following stats into
relevant sections.
Residential real estate statistics
Residential is what most people
think of when they hear the term real estate. It refers to the
types of properties that people live on – those that are not
intended to be used for anything business-related. This includes
single and multi-family homes, as well as condos and
townhouses.
- As of
April 2019, there have been roughly 673,000 houses sold in the US
this year, which is 12.4 percent more than last year
(U.S.
Census Bureau,
2019).
- 5.34
million existing homes were sold in 2018 (down from 5.51 million in
2017).
(NAR, 2018)
- The
Midwest has the highest rates of homeownership in the nation at
68.2%, followed by the South at 66.2 percent (U.S.
Census Bureau,
2019).
- 64.8%
of U.S. citizens were homeowners in the fourth quarter of 2018 (up
from 64.2% in 2017).
(United States Census Bureau, 2019)
- 35.4%of homeowners are under 35 years of age.
The age bracket with the highest rate of home ownership (78.5%) is
65 years and over (U.S.
Census Bureau,
2019).
- Madison, WI and Grand Rapids, MI are the two
most popular cities for millennial movers (National
Association of Realtors,
2019).
- Based
on buyer activity and active inventory, the hottest real estate
markets in the country are in Boston, MA and Lafayette, IN
(Realtor.com,
2019).
- Nationwide, the average sale price of a luxury
home fell 1.6% in 2019 (Redfin,
2019).
- Across the US, the median price of a home is
$267,300 (National Association of
Realtors,
2019).
- Fishers, IN and Carmel, IN top the list of best
cities for families (Apartment
List, 2019).
- 36%
of homeowners listed unexpected maintenance or repairs as their
biggest regret (Zillow,
2019).
- The
least competitive housing markets in the country are Miami, Dallas,
and Houston (Redfin, 2019).
- The
real estate industry will account for 22% of total commercial drone
use by 2020 (Federal
Aviation Administration,
2016).
Homebuyer statistics
Buying a home is no small feat.
Below, you’ll find a few statistics specific to
homebuyers.
- The
average homebuyer took 73 days to close on a property after the
first initial visit to the home (Redfin,
2019).
- 50%of
buyers found their homes through the internet, while 28 percent
found them through their real estate agent (National
Association of Realtors,
2018).
- On
average, buyers are spending 3 fewer days searching for homes in
2019 than the previous year (Redfin,
2019).
- Virtual house tours are most important to
buyers that fall within the 53-71 age range (National
Association of Realtors,
2018).
- Finding the right home tops the list for most
difficult steps in the home buying process (National
Association of Realtors, 2017).
- 33%
of home buyers in 2018 were first-time home buyers.
(NAR Home Buyers and Sellers
Generational Trends Report, 2019)
- 10
weeks was the average amount of time buyers spent searching for a
home in 2018.
(NAR Home Buyers and Sellers
Generational Trends Report, 2019)
- 14%
of buyers purchased brand new homes, while 86% of buyers purchased
previously lived-in homes.
(NAR Home Buyers and Sellers
Generational Trends Report, 2019)
Selling statistics
Selling a home can be just as
big of a hurdle as buying one. From getting a property listed to
setting up the open house, finding qualified buyers is a feat in
and of itself.
- Thursday is the best day to list a home.
Properties listed on Thursday sell for $3,015 more than on Mondays,
which are the worst days to list a home (Redfin,
2019).
- On
average, 98% of final sale prices matched the original asking price
of a property in 2019 (Redfin, 2019).
- This
year, the median number of days that a property was on the market
before an offer was accepted is 40 (Redfin, 2019).
- 73%of
sellers are more likely to list their home with an agent who
leverages video to market their property (National
Association of Realtors, 2018).
- Staged homes sell 25% faster than non-staged
homes (Coldwell
Banker,
2019).
Rental statistics
Not everyone can afford to buy a
home – that’s where renting comes in. Many residential properties
are offered as rental units to tenants for non-commercial
purposes.
- Globally, the most expensive place to rent is
San Francisco where the rent averages out at $3,690
(Zumper, 2019).
- In
2019, Henderson, NV and Phoenix, AZ saw the fastest rent growth in
the country with an increase of 4.5 and 4.1 percent, respectively
(Apartment
List, 2019).
- Across the US, the cost of renting has gone up
66 percent (Realtor.com,
2019).
- Troy,
MI is ranked as the most affordable renting city for families
(Apartment
List, 2019).
- Only
8 percent of homeowners regret purchasing a home instead of renting
(Zillow,
2019).
Real estate demographic statistics
It may seem like millennials are
abandoning home buying in favor of renting, but these stats prove
that that may not be the case.
- 86%
of younger millennials (aged 21–28) and 52% of older millennials
(aged 29–38) were first-time home buyers. Meanwhile, Generation X
(people between the ages of 39–53) consisted of 24% of 2018 home
buyers. 18% of younger baby boomers (people between the ages of
54–63) and 14% of older baby boomers (people between the ages of
64–72) were home buyers in 2018. 7% of home buyers belonged in the
silent generation (people between the ages of 73–93), the smallest
segment of home buyers in 2018.
(NAR Home Buyers and Sellers
Generational Trends Report, 2019)
- 2020
is expected to be the peak year for millennial home buying.
(Realtor.com National Housing Forecast, 2019)
- Millennials will account for 45% of mortgages
in 2019.
(Realtor.com National Housing Forecast, 2019)
- 25%
of Generation X home buyers identified as a race other than
white/Caucasian, making them the most racially and ethnically
diverse population of home buyers in 2018.
(NAR Home Buyers and Sellers
Generational Trends Report, 2019)
- 25%
of home sellers in 2018 belonged in Generation X, making them
the largest segment of sellers.
(NAR Home Buyers and Sellers
Generational Trends Report, 2019)
- In
2018, 63% of home buyers were married. Additionally, 18% were
single females, 9% were single males, and 8% were unmarried
couples.
(NAR Home Buyers and Sellers
Generational Trends Report, 2019)
- In
2018, 37% of home buyers had children under the age of 18 living at
home.
(NAR Home Buyers and Sellers
Generational Trends Report, 2019)
Real estate financing statistics
As student loans continue to
ensnare the population into a collective
$1.7 trillion
debt, real estate financing has
been impacted.
Notably, home values are
increasing while millions of Americans are spending more than 50%
of their earnings on their home purchase.
- As of
February 2019, the median home value in the United States is
$226,300. (Zillow, 2019)
- United States home values have gone up 7.2%
since 2018. (Zillow, 2019)
- The
median rent price in the United States is $1,650. (Zillow, 2019)
- 88%
of home buyers financed their home purchase.
(NAR Home Buyers and Sellers
Generational Trends Report, 2019)
- For
58% of buyers, their down payment came from their savings account.
39% of buyers financed their home using the proceeds gained from
the equity of their previous residence.
(NAR Home Buyers and Sellers
Generational Trends Report, 2019)
- 13%
of all buyers cited that saving for a down payment was the most
difficult step in the home buying process.
(NAR Home Buyers and Sellers
Generational Trends Report, 2019)
- Around 50% of renters are paying more than 30%
of their income on rent.
(PWC Emerging Trends in Real
Estate, 2019)
- 12
million Americans spend more than 50% of their earnings on their
home purchase.
(PWC Emerging Trends in Real
Estate, 2019)
Real estate marketing statistics
Real estate agents understand
the benefits of a good marketing plan. The majority of agents are
using their budget for marketing efforts in 2019 in the hopes of
gaining better leads.
- On
average, 31.5% of brokers and real estate agents plan on spending
more than $400 a month on real estate marketing.
(Placester Real Estate Marketing
Strategy Survey Report, 2018)
- 46.4%
feel their top marketing challenge is generating enough
high-quality leads.
(Placester Real Estate Marketing
Strategy Survey Report, 2018)
- 16.5%
of real estate agents had success with purchased leads.
(OutboundEngine Real Estate
Marketing Benchmarks Report, 2017)
- 53.6%
think adding more locally focused content to their real estate
website will make it more appealing.
(Placester Real Estate Marketing
Strategy Survey Report, 2018)
- 84.6%
of brokers and real estate agents use Facebook for their social
media marketing efforts.
(Placester Real Estate Marketing
Strategy Survey Report, 2018)
- 30%
of brokers and real estate agents want to learn more about the
specific housing interests (e.g., home types) of their
audience.
(Placester Real Estate Marketing
Strategy Survey Report, 2018)
- 49.5%
of brokers and real estate agents want video marketing to be a big
part of their marketing strategy.
(Placester Real Estate Marketing
Strategy Survey Report, 2018)
- 43.8%
of real estate agents would invest in referrals if they had extra
budget for marketing.
(OutboundEngine Real Estate
Marketing Benchmarks Report, 2017)
Real estate agent statistics
A real estate agent or broker is
a professional that is licensed to sell property in their state.
The business of buying and selling properties can be incredibly
lucrative but doesn’t come without its difficulties.
- 49%
of agents report working 40 or more hours per week, while 22%
report working less than 30 hours (Placester, 2019).
- The
largest expense for working real estate agents is transportation at
around $1,370 per year (National
Association of Realtors, 2019).
- Agents earned 17%of their business from
referrals, and only 13% from returning clients (National
Association of Realtors, 2019).
- 62%
of agents spend at least one hour a day on marketing
(Placester, 2019).
Commercial real estate statistics
Commercial real estate refers to
non-residential property that serves to generate income. This
includes shopping malls, hotels, and office spaces.
- In
2019, the average commercial real estate sale was $1.2 million
(National
Association of Realtors,
2019).
- The
total dollar volume of commercial sales in the US has decreased
since 2018. In the large market (sales greater than $2.5M), sales
decreased by 11%. In the small market (sales less than $2.5M), the
decrease was closer to 8 percent (National
Association of Realtors,
2019).
- Toledo, OH and Syracuse, NY have the highest
rental vacancy rates in the country at 18.1% and 17.9%,
respectively (National
Association of Realtors,
2019).
- Based
on annual rent, 5th Avenue in New York City has the most expensive
retail rates in the world (Statista,
2019).
- With
an average cost of $255.50 per square foot, Hong Kong is the most
expensive city in the world for renting office space
(Statista,
2019).
- Nikhil, Atlanta, GA, “Good morning. I was
listening to a recorded show of FlippingAmerica. I am new to this
business and getting organized before I can actively wholesale or
rehab. You mentioned that you have some spreadsheet that you can
share that estimates the cost of rehab. Could you please share the
details?”
Comment Line calls and Questions
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leave your message!
Motivational Thoughts for the day
“The dog that chases 5 rabbits catches
none."
-Gordon
Catts