2014-06-12 / Business
All the single buyers
It’s tougher for unmarried buyers to get into the market. Here is how to appeal to them.
Single buyers have been one of the biggest casualties of the economic downturn and the housing bust. Rising home prices and stricter lending rules have kept many young professionals out of the market. Those who can afford are refraining from jumping into the home-ownership wagon because of economic uncertainty.
According to the National Association of Realtors, the market share of single buyers nosedived from 32 percent in 2010 to 25 percent in 2013.
“That’s a very significant drop,” says Walter Molony, an NAR spokesman.
As more and more investors are buying up properties and turning them into rentals, young buyers are being forced to take a back seat. They are priced out of the market. And that isn’t the only challenge. Since the downturn, lenders have become wary about loan approvals without close scrutiny. Borrowers today require a squeakyclean credit record and sizeable down payment to qualify for mortgages. In recent months, interest rates also have started climbing upward, adding to the anxiety of single buyers.
“Affordability conditions have been tougher for young professionals,” Molony says. “Dual-income households are more likely to have higher credit ratings.”
But, despite the restrictive lending practices, there still is a sizeable number of young professionals buying homes. Chris Pollinger, senior vice president of sales at First Team Real Estate in Orange County, Calif., says his office caters to many single buyers.
“We find pockets of them,” he says. “But they don’t buy across the marketplace.”
The economy was a huge strain on relationships, and as it began to improve couples parted ways, resulting in higher divorces. Pollinger says many of his single clients are divorced women, a group more likely to buy in this economy compared to their male counterparts, he adds.
“When you look at the millennial crowd, younger men are not as security conscious as women,” Pollinger says. “[Single] women are entering the marketplace faster.”
Part of the reason why the young professional segment of homebuyers is dwindling also is because there aren’t many homes that appeal to them. These buyers have specific needs, and if sellers are targeting this population segment, they ought to have certain things in mind, real estate professionals said.
Security is a major concern for most single buyers. They prefer condominiums with gated access. Unlike couples or families, they want a smaller footprint.
According to the NAR, single women on an average prefer homes with a median square footage of 1,500-square-feet, compared to 1,600 by single men and 1,900 by married couples. These buyers also have strong preferences about the kind of neighborhoods they want to live in. They may stumble upon their dream home easily, but if it’s not in that perfect neighborhood, they probably will walk away from making a deal.
Among single men, 63 percent say the choice of neighborhood is an important determining factor, compared to 64 percent single women.
“These buyers want to be in an urban setting where they can walk to a coffee shop, a sport complex or an art museum,” says Jennifer Fivelsdal, broker owner of JFIVE Home Realty in Redhook, N.Y.
Many young professionals don’t mind a long-distance commute to work, as long as they have the recreational amenities closer to their home, Fivelsdal says.
“And because they commute to work, they like homes [that] are not high maintenance,” she says. “I had one client who even wanted the furniture that was in the home he bought.”
Single buyers prefer homes that are in good condition and are move-in ready. They like frills such as granite countertops in their kitchen, and a relaxation space such as a porch or a balcony. While women worry more about security and school districts, single men like a flashy unit with the latest and greatest appliances, Pollinger says.
“Boys like showing off,” he adds.
© CTW Features