Prudential Real Estate, an HSF Affiliates LLC company, and Prudential New Jersey Properties today released results of its fourth quarter Consumer Outlook Survey indicating that consumers’ perception of residential real estate is increasingly favorable, and that consumers are more committed to buying and selling homes in 2014 than they were during the previous year.
In fact, favorability toward real estate reached 78% among all respondents, a 5-point jump from the previous quarter and 15 points higher than at year-end 2012. Millennials’ perception of real estate is most favorable, peaking at 87%. Respondents’ growing optimism yields resolve, as 76% of likely transactors and 63% of all survey participants indicated they were more committed to buying/selling homes in 2014.
“Consumers understand that the U.S. economy and residential real estate continue moving in positive directions,” said Earl Lee, CEO of HSF Affiliates LLC. “Accordingly, they’re feeling much better about their personal situations and want to take advantage of attractive home prices in many markets and interest rates that remain low by historical standards.”
Respondents acknowledged that macro-economic events of 2013, such as government sequestration and rising interest rates, impacted their personal finance decisions. However, they look to the new year with anticipation: A full 65% are optimistic about the housing market in 2014 and a nearly 60% believe home sales will increase during the year. Half of all respondents believe that the rate of appreciation in U.S. home values will slow this year after a strong run in 2013.
“Normalcy is returning to residential real estate,” said Lee. “People are seeking homes for all the right reasons – to gain shelter and security, raise a family and generate long-term wealth.”
While financial concerns certainly play a role in the decision to buy or sell, homeownership remains a deeply personal decision. Owning a home is important to 96% of Americans, and 78% agree that homeownership is an important part of the American dream. When asked about their experience buying and selling in today’s economy, 72% of respondents said that finding the right home and community are crucial to their family’s happiness.
In this day and age of internet marketing many buyers have their initial introduction to properties online. A good agent will guide and advise the buyer as to factors that are not apparent online such as location, overall condition, price competiveness and many other factors.
Caution remains in the marketplace. “Decreasing home values” is the No. 1 concern of respondents, followed by “saving enough for a down payment.” Underscoring the stringent lending guidelines that are still in place from the industry downturn, just 39% of respondents believe it will be easier to secure a mortgage loan in 2014. Consumers also acknowledged that tight housing inventory may impact their home-buying decisions this year: 67% expect to face more competition for homes on the market.
These and other hurdles call for advice and guidance from real estate professionals. A full 64% of survey respondents indicated that a good agent can help them make the right choices about the type of home and community they want; 62% said a good agent can help maximize homeownership investment. Among millennials, 70% said a good agent can help them maximize their investment and 62% say now, more than ever, they look to a real estate agent for sound guidance on a real estate transaction.
“Consumers are increasingly sophisticated about real estate and many come to the table armed with impressive research,” said Stephen Phillips, COO of HSF Affiliates. “However, they will always need an experienced agent to pull it all together, assess opportunities, negotiate in good faith and keep everything moving for a successful transaction.”
The full survey details are available upon request. An infographic illustrating survey findings is available here.
Prudential Real Estate Outlook Survey Methodology
Interviews with 2,500 Americans who are “in the market” to buy or sell a home were conducted online by Edelman Berland in December 2013 and January 2014. Respondents are aged 25-64 with a household income of at least $50,000. The margin of error is +/-1.96% for all respondents.
About Prudential New Jersey Properties
Based in Somerset, Prudential New Jersey Properties offers resale, new homes, fine homes and resort and commercial properties as well as relocation, mortgage, title and insurance services. With 19 offices and more than 600 sales associates serving 11 counties -- Essex, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Ocean, Somerset, Sussex, Union and Warren – Prudential New Jersey Properties is the state's largest Prudential Real Estate Affiliate and the second largest independently-owned residential real estate company. For more information, visit http://www.PrudentialNewJersey.com or contact the home office in Somerset at 800-LIVE-IN-NJ (800-548-3466).
About Prudential Real Estate and HSF Affiliates LLC
Prudential Real Estate is a part of the HSF Affiliates LLC real estate brokerage family, which includes Berkshire Hathaway HomeServices and Real Living Real Estate. Most Prudential Real Estate franchisees are independently owned and operated. Visit www.prudentialrealestate.com for details.
HSF Affiliates LLC, based in Irvine, Calif., is a joint venture of which HomeServices of America, Inc., the nation’s second-largest, full-service residential brokerage firm, is a majority owner. HomeServices of America is an affiliate of world-renowned Berkshire Hathaway Inc.
Prudential, the Prudential logo and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities and are used under license with no other affiliation with Prudential.