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November 24, 2014

Regional Trends: What Buyers Want Most—and Get

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Regional Trends: What Buyers Want Most—and Get

Median-price purchasers don't expect kitchens fit for food stars, trickling waterfalls, or fire pits. But they dream, too, and here's what's on their wish lists.

Sales are robust again in many markets across the country, with the national median existing-home price topping $196,300 in November, up 9.4 percent from a year earlier, according to the National Association of REALTORS®. But a single bold-faced dollar amount has only limited usefulness for real estate practitioners and consumers given the wide variation in job markets, housing inventory, and sales trends.

Also varying by market is what buyers tend to seek in square footage, room types, and outdoor living space. Specific tastes in room features and layouts are affected greatly by region, climate, lifestyle, and architectural traditions.

To better understand these localized trends, we asked REALTORS® from four markets across the country to share a recent median-priced listing and describe how it reflects local buyer preferences.

Des Moines, Wash.

Median price: $245,000 (Seattle-Tacoma-Bellevue market, $354,700 median, +15.9% from 2012)

Desired features: Good condition, two-story or ranch plan, about 1,700 square feet, updated bathrooms, deck, natural gas for barbecue.

Buyer turnoffs: Fixer-uppers, overpricing.

Best marketing tools: A listing launch with an open house preview for neighbors to bring in as many as possible in initial blitz; professional photos appeal to all buyers; listing’s own website to measure traffic online.

For $100,000 more: Partial view of Puget Sound or Olympic mountains, fourth bedroom, updated kitchen, basement, bigger footprint.

Prices in Des Moines (population: 29,000) saw double-digit gains in 2013 but are still well below the $354,700 median for the Seattle-Tacoma-Bellevue area. Des Moines has seen a housing shortage for the last year and a half. The prime reasons, says Tony Hettler, crb, broker-owner with John L. Scott Real Estate’s Des Moines office, are sellers who are waiting for prices to rise further before they list and pent-up demand from young couples seeking affordable homes near the water or mountains.

This listing: This bank-owned 1,890-square-foot house, built in 1990, sold in less than three weeks last July for $13,100 more than its $207,900 listing price. Hettler credits the realistic price, prime condition, new appliances, gas furnace, roof, three bedrooms, and convenient location between Seattle and Tacoma, the state’s biggest cities.

Jacksonville, Fla.

Median price: $170,600 (+29.3% from 2012)

Desired features: Hardwood floors, high ceilings, walk-in closets in master bedroom, a pool.

Buyer turnoffs: No second bathroom, either no garage or just a single-car garage.

Best marketing tools: Listing sites, social media, and YouTube, since many home shoppers in this price range (from ages 20 to 60) use smartphones to pull up images and information. Providing educational information is particularly helpful for explaining prequalification guidelines to first-time buyers, says Karen Wentz, GRI, with Prudential Network Realty Wentz—and for getting the word out that owning can cost less than renting.

For $100,000 more: Updated kitchen and bathrooms, fourth bedroom, three-car garage, bonus room, outdoor living space with kitchen.

Sales are heading up, along with prices, in northern Florida where the median price was $145,500 in 2012. The inventory is shrinking due to first-time home buyers landing jobs at three local military bases. Investors are also scooping up “anything under $200,000,” says Wentz. In fact, most comparably priced houses sell within 30 days. But she urges a dose of realism: “Many first-timers may have to accept some outdated features, and sellers may need to pay all or part of closing costs. Buyers remain cash poor.”

This listing: This 1993 brick and HardiPlank-sided, two-story, 1,734-square-foot home with three bedrooms and two-and-a-half bathrooms was listed in August and went under contract six days later. Although its kitchen had dated cabinets and appliances, Wentz thinks the $195,000 price provided the magic bullet.

Minneapolis-St. Paul

Median price: $208,000 (+14.5% from 2012)

Desired features: Updated kitchen, three good-sized bedrooms, two bathrooms, basement, central air.

Buyer turnoffs: Smaller living room, no dining room, no attached garage.

Best marketing tools: Jason Walgrave, GRI, of RE/MAX Advantage Plus, hosts a weekly AM radio show, “Minnesota Home Talk.” He has found radio advertising successful, and it’s no wonder: According to Minnesota Public Radio, Minnesota 
has the largest radio-listening audiences in the country.

For $100,000 more: More upgrades, bigger closets, larger foundation.

Prices climbed 15 percent in 2013 as inventory dwindled in the Twin Cities, particularly among foreclosures. Yet, prices remain down from the 2007 peak. One of the most eager groups of -buyers is twenty-something singles who like city living, says Walgrave.

This listing: This one-and-a-half-story, 1951 house on a typical small city lot was listed in July at $200,000 and went under active contract quickly despite having only one bathroom. Walgrave thinks its three bedrooms, two-car garage, central air conditioning, hardwood floors, and two fireplaces more than compensated, as did his explanation that a second bathroom could be added affordably on the lower level.

Warwick, R.I.

Median price: $241,400 (median is for Providence, R.I New Bedford-Fall River, Mass., +10.3% from 2012)

Desired features: Good kitchen, less than one-quarter-acre lot, modest taxes.

Buyer turnoffs: Airport noise, small yards.

Best marketing tools: Full-motion video tours for first-time buyers so they can confirm their online findings. Bill Fooks, CRB, of Coldwell Banker also says rapidly responding to calls and e-mails is important. If buyers can’t see a listing “in a timely fashion”—24 hours or less—they’ll go after another house, he says.

For $100,000 more: Newer house (built after 1980), 1,700 square feet, two full bathrooms.

The Warwick area, near Providence, has seen prices remain level of late, after an upward tick last spring, a slow start in September and October, and a little improvement in November, says Bill Fooks, crb, of Coldwell Banker. But the overall climate is tough with the state’s unemployment rate the second highest in the country, affected by a loss of population and high taxes, he says. Most buyers are people under age 50 who are finding employment at area colleges and universities, tech start-ups, and service industries such as banks.

This listing: This listing reflects the difficulty of the market: It’s described as in top condition—a 10 on a scale of 1 to 10—and priced fairly, yet hasn’t generated offers. Built in 1955, the single-level house was listed in September at $164,900 with three bedrooms, one full bathroom, hardwood and ceramic floors, a full basement, central air, a dining area, a “great kitchen,” a neat yard, and close proximity to public transportation and shopping. ”It’s had numerous showings. Its drawback is that it is a narrow lot, and the house was built with the gable end toward the road,” Fooks says. To compensate, he priced it under $170,000, rather than in the mid-$170,000s, which a different yard and orientation might have commanded.

Editor’s note: Median home prices are based on NAR’s third-quarter 2013 data.

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