The wish list of today’s home buyer is long, but flexible—and includes both home features and neighborhood characteristics. Neighborhood safety and finding a home within their initial price range are the two features that buyers most frequently require, at 71 percent and 67 percent, respectively.
Beyond price, buyers are most concerned with finding a home that fits the daily needs of their household. Most buyers require that their home have air conditioning (62 percent of buyers), their preferred number of bedrooms (62 percent), and their preferred number of bathrooms (53 percent).
Kitchens, Energy Efficiency Most Desirable Home Features
Nice-to-have features—those deemed not a requirement, but highly desirable—highlight increasing trends toward sustainability and customization. Topping the list, close to 1 in 2 buyers (48 percent) list energy efficiency and preferred style of kitchen (also 48 percent of buyers) as desired home characteristics. Preferred finishes (e.g., flooring, countertops and appliances) follow closely at 47 percent.
Safety, Parking Top Neighborhood Requirements
Home features are not the only factors that influence home buyers’ decision-making; neighborhood characteristics are important, too. In addition to requiring that the home is in a safe neighborhood, a sizeable share of buyers require that the home has ample parking (40 percent) and is located in their preferred neighborhood (39 percent).
Air Conditioning More Important Than Decks, Patios and Yards
Staying cool indoors is clearly more important to buyers than enjoying the perks of outdoor space, with air conditioning among buyers’ four most essential home features. In fact, a larger share (62 percent) of buyers list air conditioning as an important feature in their new home than those who view private outdoor space, like a patio, deck or yard, as essential (48 percent of buyers place importance on outdoor space).
Luckily, air conditioning is an amenity already common in most American homes; today, about 65 percent of all homes in the United States have central air conditioning, and an additional 27 percent of homes have individual air-conditioning units.20 But for markets where air conditioning isn’t as prevalent in homes, such as in the West, air conditioning is an increasingly sought-after feature for home buyers of all demographics and generations. This is due, in part, to the rising number of days with temperatures over 65F, particularly in California, Nevada and New Mexico, according to the Environmental Protection Agency.21
In warm climates, rising incomes are another factor; one recent study conducted by researchers from UC-Berkeley and the National Bureau of Economic Research22 found that for every additional $1,000 of household income, air conditioner adoption increases 3 percentage points. This is not surprising, given that air conditioning is a luxury often associated with additional utility and maintenance costs.
The Suburban Dream Is All About Bathrooms
Bathrooms play a fundamental role in the home-buying process for suburban buyers. More than half (58 percent) of suburban buyers say it is a requirement that a home has their preferred number of bathrooms (compared with 52 percent of rural and 47 percent of urban buyers). The explanation for this trend is pretty simple: Generation X households (those aged 38-52) are more likely to live in the suburbs and to have children under the age of 18 at home (62 percent of Generation X buyers have young children, compared with 53 percent of Millennial and 16 percent of Baby Boomer buyers). As their children grow from toddlers to teenagers, having an extra bathroom or two quickly goes from a “nice-to-have” to a “necessity.”
Likely for many of the same reasons, Generation X buyers place more requirements around the size of their home in general than the average buyer. Generation X buyers require that their home have their preferred number of bathrooms (59 percent vs. 53 percent for all buyers), preferred number of bedrooms (70 percent vs. 62 percent for all buyers), and preferred home size or square footage (52 percent vs. 47 percent of all buyers).
Location, Location, Location
Location has always been a primary factor in the home-buying process, and it’s no different for today’s buyer. Buyers are craving an optimal spot when searching for the perfect home, whether it be in their preferred neighborhood (80 percent list this as a requirement or desired characteristic); a location close to family and friends (68 percent list as a requirement or desire); near shopping, services and other leisure activities (78 percent list as a requirement or desire); or close to work (69 percent list as a requirement or desire).
For Millennial and Generation X buyers, the location of the home must check all the boxes. This includes requiring or desiring a home that is close to work (81 percent of Millennial and 75 percent of Generation X, compared with 50 percent of Baby Boomer and 31 percent of Silent Generation buyers), and close to family and friends (72 percent of Millennial and 66 percent of Generation X, compared with 63 percent of Baby Boomer and 59 percent of Silent Generation buyers).
Living Close to Family, Friends Is a Requirement for Some
Looking for a home close to family and friends is also more of a requirement for different ethnic groups: Hispanic/Latino (29 percent) and Caucasian/white (28 percent) buyers are more likely to require being close to family and friends (compared with 17 percent of African-American/black and 18 percent of Asian/Pacific Islander buyers).
Proximity to Work a Requirement for Many
Nearly half (45 percent) of buyers want to be close to public transportation, and almost 7 in 10 (69 percent) require or desire proximity to work. This is especially true among younger generations and those living in larger cities, where traffic is likely heavier and public transportation is a key part of a commute. Specifically, 33 percent of urban buyers require their home to be close to work (compared with 28 percent of suburban and 21 percent of rural buyers), and 31 percent look for a home close to public transportation (in contrast to 13 percent of suburban and 10 percent of rural buyers).
“Nearly half (45 percent) of buyers want to be close to public transportation…”
Because many Millennials buy in urban areas, it follows that they are also the most likely to not only desire easy access to public transportation, but to list it as a requirement (24 percent, compared with 18 percent of total buyers).
Being close to mass transit is seen as a requirement more often by Hispanic/Latino (26 percent) and African-American/black (25 percent) buyers than Asian/Pacific Islander (17 percent) or Caucasian/white (16 percent) buyers. This could be due to these two groups’ increased likelihood to buy in urban areas, where transit is prevalent. Hispanic/Latino buyers purchase in urban areas at 47 percent, African-American/black buyers at 43 percent, and Asian/Pacific Islander buyers at 38 percent, compared with just 28 percent of Caucasian/white buyers.
Younger Buyers Seek Out Schools
It’s no surprise that more than a third of Generation X and Millennial buyers require that their home be in their preferred school district (36 percent and 34 percent, respectively), since these two groups are the most likely to have children in the household. Fifty-seven percent of buyers under the age of 53 have children under the age of 18 at home, compared with 13 percent of buyers over the age of 53. For comparison, just 16 percent of Baby Boomer and 6 percent of Silent Generation buyers require that their home is located in their preferred school district.
Safety Is Key for Suburbanites
Being in a safe neighborhood is a priority for almost all buyers, regardless of whether they live in an urban, suburban or rural area. Suburban buyers, however, are more concerned with safety than their urban and rural counterparts (78 percent, compared with 59 percent of urban buyers and 70 percent of rural buyers).
Unsurprisingly, a safe neighborhood becomes even more critical when children are involved. Seventy-four percent of households with children indicate safety as a requirement, versus 68 percent of households without kids.
Over Half Consider New Construction Homes
Over half (52 percent) of buyers consider new construction homes. Buyers are drawn to new homes because of their desirable location (43 percent), appealing features (39 percent), and the fact that everything in the home is new (35 percent). Higher-income buyers are most likely to consider purchasing newly built homes (65 percent of buyers earning $100,000 or more annually consider them, vs. 45 percent of buyers earning less than $100,000 a year).
Many Consider Distressed, Non-Traditional Homes
As buyers attempt to balance their desires against their budget, some look outside traditional for-sale homes and consider distressed or non-traditional home purchases as another option. Thirty-six percent of buyers consider a foreclosure, 34 percent consider a short-sale home, 22 percent consider buying a home at an auction and 27 percent look at buying a lot/land with no existing home on-site.
Buyers in the Northeast and West are significantly more likely to consider buying a home at auction (27 percent in each region, compared with 22 percent of total buyers). This is likely due to low for-sale inventory in Northeastern and Western urban areas. Buyers in these highly competitive areas are understandably looking at alternative methods for finding something they can afford in the area where they want to live.
Buyers drawn to non-traditional home sales for the short-term savings on list price often end up spending more on repairs. While fixer-upper homes generally list for 8 percent less than market value, the money saved on the home purchase doesn’t go far. That 8 percent—or roughly $11,000 saved—generally won’t be enough to make the repairs needed on the home, especially if they’re anything more than cosmetic.23
Read more in the Zillow Group Consumer Housing Trends Report 2017
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