Last week, the National Association of Realtors announced that the index of sales agreements on existing homes rose 10.4% in October. Though this represented a significant increase over previous months this year, signings remain at least 20% below October 2009 levels. To boost sales, realtors may have to promote features other than investment to potential buyers.
By region, the sales agreement numbers were as follows:
- Northeast 19.6%
- Midwest 27.3%
- South 7.1%
- West (-0.4%)
National Association of Realtors economist Lawrence Yun attributes the rise in sales to consumer understanding that homes are being priced at an affordable level. However, a more detailed outlook provided by the Third Quarter 2010 Fannie Mae National Housing Survey shows that some consumers have fundamentally changed their attitudes about home ownership. During the housing boom, 83% of consumers believed that housing was a safe investment. More recently, this percentage has dropped to 66%. And of consumers who have fallen behind on mortgage payments, half say that their next housing option will be a rental rather than a purchase.
This survey also revealed that 68% of consumers believe that now is a good time to buy a house. While consumers may be in a buying mood, the marketing of housing must appeal to factors other than investment. Realtors who can establish emotional bonds with buyers on the positive aspects of home ownership that extend beyond financial returns may have the most success. Encouraging prospective buyers to purchase homes in neighborhoods with desired school systems or towns with desired neighborhoods may be one approach. Appealing to owners who are looking for specific features such as yards or private swimming pools and spas may be another way to get consumers once again considering the purchase of home.
[Sources: Strong Rebound in Pending Home Sales. National Association of Realtors. Realtor.org. 2 Dec. 2010. Web. 8 Dec. 2010; Fannie Mae’s Most Recent National Housing Survey Indicates Americans Uncertain Housing Market has Bottomed. Realestatearama.com 24 Nov. 2010. Web. 8 Dec. 2010]