Did you know that 43 percent of Honolulu home buyers were first-time buyers in 2014, compared to 33 percent nationally? Or that the median household income of Honolulu buyers was $124,500 in 2013? To learn more about Honolulu home buyers and sellers, and how they compare nationally, check out the results of the National Association of REALTORS® 2014 Home Buyers and Sellers Report.

Prepared for: Honolulu Association of REALTORS®

Prepared by: NATIONAL ASSOCIATION OF REALTORS®, Research Division

Introduction

For most home buyers, the purchase of real estate is one of the largest financial transactions they will make. Buyers purchase a home not only for the desire to own a home of their own, but also because of changes in jobs, family situations, and the need for a smaller or larger living area. This annual survey conducted by the NATIONAL ASSOCIATION OF REALTORS® of recent primary residence home buyers and sellers helps to gain insight into detailed information about their experiences with this important transaction. The information provided supplies understanding, from the consumer level, of the trends that are transpiring and the changes seen. The survey covers information on demographics, housing characteristics and the experience of consumers in the housing market. Buyers and sellers also provide valuable information on the role that real estate professionals play in home sales transactions.

Buyers continue to face tighter credit standards than seen in previous years. A notable finding from this year’s report was the drop in first-time home buyers to a share not reported since 1987. Buyers in this year’s report showed incomes of buyers continuing to increase and buyers this year more likely to have the financial capability to own more than one property. Additionally, there is a continuation of trends seen last year of an elevated share of married couples and suppressed levels of single buyers. Married couples who purchased a home have the advantage of more buying power and added financial stability—their typical household incomes are higher than single households.

Tightened inventory is affecting the home search process of buyers and the homes that buyers are purchasing. Due to suppressed inventory levels in many areas of the country, buyers are typically buying more expensive homes as prices increase. The number of weeks a buyer is searching fell in this year’s report. Buyer’s continue to report the most difficult task for them in the home buying process is just finding the right home to purchase.

Buyers need the help of a real estate professional to help them find the rights home for them, negotiate terms of sale, and help with price negotiations. Sellers, as well, turn to professionals to help market their home to potential buyers, sell within a specific timeframe, and price their home competitively. For-sale-by-owner sales remain at historic lows, while the use of the agent to sell the home stays at historic highs. Likewise on the buyer use of the agent is at historic highs as buyers purchasing directly from a previous owner or through a builder falls.

This report provides real estate professionals with insights into the needs and expectations of their clients. What do consumers want when choosing a real estate professional? How do home buyers begin the process of searching for a home? Why do some sellers choose to forego the assistance of an agent? The answers to these questions, along with other findings in this report, will help real estate professionals better understand the housing market and also provide the information necessary to address the needs of America’s real estate consumers.

Characteristics of Home Buyers 

• 43 percent of home buyers were first-time buyers in Honolulu, compared to a national level of 33 percent, which is still at a suppressed level of the historical norm of 40 percent.
• Thirteen percent of buyers nationally purchased a multi-generational home due to children over the age of 18 moving back into the house, cost savings, and health and caretaking of aging parents. In Honolulu this was 16 percent.
• In Honolulu, the typical buyer was 43-years-old, while the typical first-time buyer was 35 and the typical repeat buyer was 52. Nationally the typical buyer was 44-years-old, while the typical first-time buyer was 31 and the typical repeat buyer was 53.
• The 2013 median household income of buyers was $84,500 nationally and $124,500 in Honolulu. The median income was $68,300 among first-time buyers and $95,000 among repeat buyers nationally, and in Honolulu this was $98,600 and $124,500 respectively.
• Sixty-five percent of recent home buyers were married couples. 66 percent of recent home buyers were married couples in Honolulu.
• Nationally, for 24 percent of recent home buyers, the primary reason for the recent home purchase was a desire to own a home. Compared to Honolulu at 36 percent of recent home buyers.

Characteristics of Homes Purchased

• New home purchases continue to drag at a share of 16 percent of all recent home purchases on a national level. In Honolulu, this share is 11 percent.
• The typical home purchased was 1,870 square feet in size, was built in 1993, and had three bedrooms and two bathrooms. In Honolulu, the typical home purchased was 1,350 square feet, built in 1980, and also had three bedrooms and two bathrooms.
• Seventy-nine percent of home buyers purchased a detached single-family home nationally; in Honolulu, that figure was 53 percent.
• Thirteen percent of recent buyers over the age of 50 bought a home in senior-related housing, and 2 percent over the age of 50 made a similar purchase in Honolulu.
• When considering the purchase of a home, heating and cooling costs were at least somewhat important to 86 percent of buyers nationally and 62 percent in Honolulu. Commuting costs were considered at least somewhat important by 70 percent of buyers nationally and 81 percent in Honolulu.

The Home Search Process

• For 43 percent of home buyers nationally, the first step in the home-buying process was looking online for properties and 12 percent of home buyers first looked online for information about the home buying process. In Honolulu this was 44 percent for properties and 12 percent for information.
• Ninety-two percent of buyers used the internet in some way in their home search process and 50 percent of buyers use a mobile website or application in their home search nationally; and 95 percent of buyers used the internet in some way in their home search process and 11 percent of buyers use a mobile website or application in their home search in Honolulu.
• Real estate agents were viewed as a useful information source by 98 percent of buyers who used an agent while searching for a home. In Honolulu this share was 98 percent.
• The typical home buyer searched for 10 weeks and viewed 10 homes nationally; in Honolulu, twelve weeks and 10 homes.
• Approximately nine in 10 recent buyers were at least somewhat satisfied with the home buying process. In Honolulu, 93 percent of buyers were satisfied with the process.

 Home Buying and Real Estate Professionals 

• Nationally, 88 percent of buyers purchased their home through a real estate agent or broker—a share that has steadily increased from 69 percent in 2001. In Honolulu, this share was 90 percent.
• Forty percent of buyers found their agent through a referral from a friend or family member nationally, and 54 percent in Honolulu. Twelve percent used an agent they had used before to buy or sell a home nationally, with that figure 15 percent in Honolulu.
• Two-thirds of recent buyers only interviewed one agent before the found the agent they worked with, a similar trend in Honolulu at 66 percent.
• Eighty-eight percent of buyers nationally would use their agent again or recommend to others. 86 percent of buyers in Honolulu would do the same.

Financing the Home Purchase

• Eighty-eight percent of home buyers financed their recent home purchase on a national level and 94 percent in Honolulu. Among those who financed their home purchase, nationally buyers typically financed 90 percent and in Honolulu it was 89 percent.
• The share of first-time buyers who financed their home purchase was 95 percent compared to 84 percent of repeat buyers; in Honolulu the share was 96 percent of first-time buyers and 92 percent of repeat buyers.
• Forty-six percent of home buyers reported they have made some sacrifices such as reducing spending on luxury items, entertainment or clothing. In Honolulu 47 percent of home buyers reported they have made some sacrifices.
• Twenty-six percent of buyers reported the mortgage application and approval process was somewhat more difficult than expected nationally, and 26 percent of buyers reported the same thing in Honolulu. Eighteen percent reported it was much more difficult than expected on a national level and 19 percent in Honolulu.
• Twelve percent of buyers overall cited saving for a downpayment was the most difficult task in the home buying process. Among those buyers, 48 percent report credit card debt, 44 percent reported student loan debt, and 36 percent car loans delayed them saving from a downpayment. In Honolulu, 13 percent of buyers cited saving for a downpayment was difficult and 50 percent reported student loans, 38 percent credit card debt and 38 percent car loans as getting in the way. 
• Eight in ten buyers believe their home is a good financial investment. In Honolulu 92 percent of buyers believe their home is a good financial investment.

Home Sellers and Their Selling Experience

• The typical seller lived in their home for ten years, up from 2007 when the typical tenure in home was only six years. The median tenure has increased in recent years. In Honolulu, the typical seller lived in their home for eight years.
• Eighty-eight percent of sellers were assisted by a real estate agent when selling their home nationally; in Honolulu, that figure was 82 percent.
• Recent sellers typically sold their homes for 97 percent of the listing price, and 45 percent reported they reduced the initial asking price at least once. In Honolulu, sellers typically sold their homes for 100 percent of the listing price and 38 percent reduced the asking price at least once.
• Seventeen percent of recent sellers had to delay or stall selling their home because the value of their home was worth less than their mortgage on a national level. This share was 9 percent in Honolulu.
• Thirty-six percent of sellers offered incentives to attract buyers, most often assistance with home warranty policies and closing costs overall. In Honolulu, 15 percent of sellers offered incentives.

 Home Selling and Real Estate Professionals

• Nationally, thirty-eight percent of sellers who used a real estate agent found their agents through a referral by friends or family, and 22 percent used the agent they worked with previously to buy or sell a home. In Honolulu, 44 percent of sellers found their agent through a referral and 33 percent used the agent they had worked with previously.
• Seventy percent of home sellers, nationally, only contacted one agent before selecting the one to assist with their home sale, in Honolulu 58 percent of sellers only contacted one agent.
• Ninety-one percent of sellers reported that their home was listed or advertised on the multiple listing (MLS) website overall and also 93 percent in Honolulu.
• Among recent sellers who used an agent, 83 percent reported they would definitely (68 percent) or probably (15 percent) use that real estate agent again or recommend to others. In Honolulu, 81 percent reported they would definitely (69 percent) or probably (12 percent) use the agent again.

For-Sale-by-Owner (FSBO) Sellers

• The share of home sellers who sold their home without the assistance of a real estate agent was nine percent nationally, and twelve percent in Honolulu. Forty-four percent overall and 100 percent in Honolulu knew the buyer prior to home purchase.

Methodology

In July 2014, NAR mailed out a 127-question survey using a random sample weighted to be representative of sales on a geographic basis to 72,206 recent home buyers. The recent home buyers had to have purchased a home between July of 2013 and June of 2014. A total of 6,572 responses were received from primary residence buyers. After accounting for undeliverable questionnaires, the survey had an adjusted response rate of 9.4 percent. For Honolulu there were 122 responses, accounting for a response rate of 12.6 percent.

Consumer names and addresses were obtained from Experian, a firm that maintains an extensive database of recent home buyers derived from county records. Information about sellers comes from those buyers who also sold a home.

All information in this Profile is characteristic of the 12-month period ending June 2014, with the exception of income data, which are reported for 2013. In some sections comparisons are also given for results obtained in previous surveys. Not all results are directly comparable due to changes in questionnaire design and sample size. Some results are presented for the four U.S. Census regions: Northeast, Midwest, South and West. The median is the primary statistical measure used throughout this report. Due to rounding and omissions for space, percentage distributions may not add to 100 percent.

2014 Profile