New Homes Garner Small Percentage of Sales

IRVINE, CA-Surprisingly, fewer homebuyers than ever are purchasing new homes vs. existing inventory, according to locally based consumer-research company iHave5Questions. The firm reports that new-home sales represent less than 7% of all homes sold this year, a figure significantly below historic levels of 16% to 17% newly built.

The firm also reports that 90% of people visiting new homes today are on a mission to buy, according to a study of 67,000 new-home shoppers surveyed in 150 cities across the nation. This makes the motivators behind their purchase decision all the more important to understand, and it means that now more than ever, homebuilders need to listen to what shoppers are saying, the firm says.

“Our research shows buyers gravitating to builders based on brand loyalty,” says David Harding, chief research office of iHave5Questions. “This is a surprising primary motivator as it has grown five times since last year's report. Brands that garner this support do not necessarily build the highest-cost homes. Consumers are saying that great brand loyalty is possible at every price of a new home.”

The firm's 2013 Homeshoppers Survey presents aggregated consumer-research results that delve into buying patterns including international buyers, age-qualified and multi-generational housing trends, condo conversion and luxury-rental predictions as well as other basic consumer demands in home function and design. This information is crucial for homebuilders as they look to draw in new buyers and perhaps change their traditional approach of leading with location, neighborhood size and amenities.

In age-targeted communities especially, the firm reports, more than 20% are motivated to purchase because of a builder's brand and reputation, but are told more about the pools and the views. According to the firm, consumers seldom care about these elements, so builders can use this information to focus their efforts into areas considered important by their consumers.

As GlobeSt.com reported in June, the best cities for buying fixer-upper bargain homes in this country are not in the West, but are mostly located in the Midwest, according to a report from to RealtyTrac, a locally based online provider of real estate and foreclosure data. Detroit leads the pack with 3,773 bank-owned properties built before 1960 and valued under $100,000.