I know what drove my last two home buying decisions. And I've asked everyone I've met for the past few months about what's driving their decisions. But I wanted to get a broader perspective. So I went out and ordered the National Association of Realtors® Profile of Home Buyers and Sellers 2008. It was well worth the price. I have to say, NAR has some great researchers! I'd highly recommend getting a copy of this if you want to understand who's buying and what motivates them. I'd like to share some excerpts from the research and give some examples of how Onboard Informatics' Lifestyle Listings Engine can be put into action.
I'm going to pause one more time to note that this research was conducted by the National Association of Realtors Research Division. I've tried not to misrepresent the information, misconstrue the results or take credit in any way for their fine work.
Facts and Findings
According to the report, 62% of all home buyers indicated that "quality of the neighborhood" was an important factor in their purchase decision. There are obviously many factors that influence "quality" including both physical characteristics and overall reputation. I'd like to dig a bit deeper into people's heads to turn up how they define "quality." I imagine it means a lot of things to a lot of people. But I am pretty certain that there are lots of variables involved in coming up with the quality judgement.
Sure enough, the NAR research team do drill into many angles and show that criteria vary by age group (young, first-time buyer vs. older, repeat buyer), location type (suburban vs. rural vs. urban), household composition (married couple vs. single female vs. unmarried couple) and other characteristics. We all know that one "size" does not fit all but this report shows the extent to which that statement is true.
Included here are a swath of factors that influence the purchase decision, in rank order. I haven't included all of them in here, just the one that our Lifestyle Listings Engine helps to address (currently). But trust me when I say that this report goes into MUCH greater detail.
- "Convenient to job" was ranked as important by just over half of respondents overall, and nearly 2/3 in urban areas. With Lifestyle Listings Engine, a search can be conducted based on an address (i.e., work address) and a distance (i.e., 30 miles). Coming in the next release will be the ability to enter a desired commute time (i.e. 45 minutes or less) or drive distance (i.e., <30 miles). When gas prices hit $5+ per gallon again, we'll see just HOW important this one is. Oh, and sorry to all my friends around the world who already pay nearly double that :-(
- "Convenient to family and friends" was ranked important by over 1/3 of overall respondents and two in five in small towns. Similar to above, an address or set of addresses may be entered to determine nearby properties. I also know from personally talking to many retirees that this one ranks very high on their list.
- "Convenient to shopping" is important to just over 1/4 of respondents while this inches a bit higher in urban areas. So one of the new capabilities we've put into the Lifestyle Listings Engine is the ability to search for listings based on the distance to shopping. For example, I only want places within 5 miles of a supermarket or pharmacy.
- "Quality of the school district" is, no surprise, a crucial factor for over 1/4 of buyers and nearly 1/3 for those looking in the suburbs. This is directly in line with the fact that roughly 38% of all home buyers have 1 or more child under the age of 18 in the household according to NAR. So we've introduced the ability to search based on school performance using ratings from GreatSchools. "Find me homes where there's a GreatSchools rating of 7 or better."
- "Convenient to schools" was important to just over 20% of home buyers. So just like convenient to shopping, a search can be conducted to find listings within a desired distance to a school.
- "Convenient to entertainment/leisure activities" and "convenient to parks/recreational facilities" rank high. Nearly 1/5 of buyers overall want entertainment nearby while this number jumps to 29% in urban areas and over 1/3 in resort areas. While nearly 1/5 care about parks, especially in urban and resort areas. So we've made it possible to search for listings based on such items as golf courses, swimming pools, parks & playgrounds, cafes, bookstores and libraries. And we'll continue to add more amenities.
- "Convenient to health facilities" ranks quite a bit lower overall but is important to 2/5 of those looking in resort areas. So we've enabled search based on distance to hospitals as well.
- "Convenient to airport" is important to just under 10%, especially in urban areas. So we've also made it possible to find listings within a desired distance to an airport. For the rest, they can make sure they're far way from an airport so there's a double benefit.
There are a number of other crucial factors that go into the search and decision process that we're working out solutions for. But I'll hold off talking about those until the next release.
If you're interested in the mean time, details about the first two releases of Lifestyle Listings Engine and other posts regarding lifestyle search can be found out Lifestyle Listings Engine and property Search - Related Posts.
We've also been doing some of our own research that we'll begin sharing very soon. I will say that our direct focus groups mirror what NAR's research already confirms--there are many factors that influence the home buying decision that have nothing to do with the home itself. But we're also taking it a but further to understand how people go about searching. We got some very interesting insights into how frustrating it is to conduct a home search. And we can't wait to share those insights and come up with solutions where we can.
As always, I appreciate your feedback, comments, criticisms and ideas. Feel free to email me me at email@example.com.
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