Transcript prudential real estate outlook survey

Global Communications
Second-Annual
PRUDENTIAL REAL ESTATE OUTLOOK SURVEY
March 11, 2012
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Survey Background
Objective:
 Gather insight on the factors impacting buyer/seller real estate decisions in today’s economy.
 Understand the impact of homeownership on communities.
Audiences:
 Respondents are aged 25-64 with a household income of at least $50,000, and either recently
bought/sold a home or are considering buying/selling a home.
 A similar study was conducted in February 2011 and is used as a benchmark periodically throughout
this report.
Total Respondents: 1,251
 Targeted sample of Americans “in the market” for buying or selling a home
– 501 “Recent Transactors” – Bought/sold home within the last year
– 500 “Likely Transactors” – Indicated they are likely to buy/sell home within next year
– 250 “Contemplators” – Considered buying/selling within last year, but did not
 The margin of error is ± 2.8% for all respondents and higher for subgroups.
Methodology:
 Interviews were conducted online by Palisades Media Ventures and Penn Schoen Berland, between
February 10 and February 20, 2012.
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Summary of Findings
 Americans are more optimistic about the housing market
 Homeownership still at the core of the American Dream
 Strong tie between homeownership and community
 Homeowners are looking for help
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AMERICANS ARE MORE OPTIMISTIC
ABOUT THE HOUSING MARKET
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Confidence in a real estate recovery is growing
 70% have some degree of confidence that property values will improve over the next two years
Considering the U.S. economy’s ongoing recovery from the "Great Recession," how confident do you
feel that the real estate market and property values will at least begin to recover in the next year or
two?
All
Recent Transactor
Likely Transactor
Contemplator
5
Optimism about the real estate market is up
significantly from last year
 60% have favorable views towards the real estate market, an increase of 8 points from last year
Based on your personal experience and/or what you know about the process of buying and selling
homes, what is your overall perception of the residential real estate market in the United States?
All
Recent Transactor
Likely Transactor
Contemplator
6
Younger respondents are more favorable toward the
real estate market
 Almost 3 in 4 Gen Y’s have a favorable view; only about half of Boomers are favorable
Based on your personal experience and/or what you know about the process of buying and selling
homes, what is your overall perception of the residential real estate market in the United States?
7
Respondents believe that with interest rates at low
levels now is a good time to buy
 63% believe that real estate is a good investment despite the recent market volatility
– This is up from 52% last year, an 11 point increase
 74% agree that with interest rates at historically low levels, now is a great time to buy a home
I think real estate is a good
investment despite the
market volatility of the past
few years
63% agree
With interest rates at
historically low levels, now
is a great time for me to
buy a home
74% agree
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HOMEOWNERSHIP STILL AT THE
CORE OF THE AMERICAN DREAM
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Homeownership is an important goal
 Almost 8 in 10 respondents say homeownership is very important to them; 97% say it is at least
somewhat important
How important is owning a home to you?
10
Respondents say homeownership is an important part
of the American Dream, is good for the economy
Homeownership is an
important part of the
American Dream
96% agree
Homeownership is good for
the economy
98% agree
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Respondents agree – neighborhoods comprised of
homeowners have a stronger sense of community
 87% believe neighborhoods comprised of homeowners have a stronger sense of community
than neighborhoods made up mainly of renters
Some people say that even though neighborhoods of primarily homeowners tend to be more spread
out, they have a stronger sense of community than neighborhoods of primarily renters, where many
people live in a small area.
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Homeownership improves feeling of community
connectedness
People are normally
not as concerned
about property that
they do not own. – LT
IF OWN: Does owning your home make you feel more connected to your
community?
All (N=1048)
Recent Transactor (N=471)
Yes
Because those people
are planning to stay,
whereas renters could
be gone in a year, or
next month. – LT
Likely Transactor (N=390)
Contemplator (N=188)
No
People have a stake in
what happens. Renters
tend to move
frequently and don't
care about local issues.
– RT
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Less than 1 in 10 strongly agree that they didn’t think
about the community they wanted to live in
 Communities help deliver a feeling of safety, belonging and trust
How strongly do you agree or disagree with the following statements? SHOWING ALL, % STRONGLY AGREE
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2 in 3 respondents say community feelings in
America are declining
 The Recession is consistently more to blame than better communications technology (39% vs
28%)
– About 1 in 3 don’t believe there has been a decline in feelings of community
Which is closer to your view?
15
The housing crisis actually reinforced the importance
of homeownership
 4 in 10 said the Recession made owning a home more important (49% of Gen Y)
– Just 15% said the Recession made owning a home less important
Did the recent housing crisis and economic recession make owning a home more or less
important to you?
16
Finding the right home is crucial for families, but the
housing crisis reminded them to be more careful
Finding the right home and
community is crucial to
helping my family be happy
94% agree
The housing crisis reminded
me that I have to be more
careful about buying or
selling a home
93% agree
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HOMEOWNERS ARE LOOKING FOR
HELP
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The most important reasons to own a home are
emotional
 Only 27% of respondents said the most important reasons for owning a home were financial;
73% cited family and other emotional reasons
Which of the following reasons to own a home would
you consider the most important?
All
It gives me a good place to raise a family
21
It allows me to have more control over my living space
21
It is a good investment
15
It allows me to have more space for my family
9
It gives me a sense of pride or accomplishment
9
It gives me tax benefits
6
It gives me financial security and something I can borrow
against if needed
6
It means I can live in an area with better schools
5
It allows me to live in a more convenient location closer to
family & friends
4
It allows me to live in a community where people share
my values
4
73% Family & Emotional
Reasons
27% Financial Reasons
19
Barriers to ownership are mainly financial
 Top barriers include concerns about the home losing value, affording down /
mortgage payments, inability to sell
All
When thinking about buying a home, how concerned are you /
would you be about the following?
Very Concerned
Concerned / Not
concerned
My home decreasing in value
31
71/28
Having enough savings for a down payment
24
55/46
Being able to afford the monthly payments
22
54/45
Being stuck in a home I can’t afford and am unable to
sell
22
52/48
Losing or having fewer hours at my job and not being able to afford
the monthly payments
19
47/53
Dealing with the financial sacrifices of owning a home
17
57/43
Qualifying for a mortgage
17
43/57
Being foreclosed on and losing my home
15
39/62
Mortgage rates going down even more, meaning I could have saved
money by buying later
14
48/52
20
Given the current climate, it is important to work
with a good realtor
 71% think that a good realtor is more important than ever, an increase of 4 points from last
year
Given the dynamics and challenges of today’s real estate market, I think it is more important than ever
to work with a good realtor for the best success in buying or selling a home.
All
Recent Transactor
Likely Transactor
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