Prudential Real Estate Q1 2013 Outlook Survey

Prudential Real Estate
Q1 Consumer Outlook Survey
April 9, 2013

1 © Copyright 2012 Daniel J Edelman Inc.

METHODOLOGY
WHO HOW MANY WHEN WHERE

?
Targeted sample of Americans in the market for Total: n=2,500 Data Collection Occurred Online Custom Survey
buying or selling a home: (Margin of Error = +/-2.0%) February 2013

• 1,000 “Recent Transactors” – Bought/sold Recent Transactors n=1000
home within the last year (Margin of Error = +/-3.1%)

• 1,000 “Likely Transactors” – Indicated they Likely Transactors n=1000
are likely to buy/sell home within the next (Margin of Error = +/-3.1%)
year

• 500 “Contemplators” – Considered but did not Contemplators n=500
buy/sell within the past year (Margin of Error =+/-4.4%)


SEGMENTATIONS
CONTEMPLATORS

AGE

INCOME

GENDER

EDUCATION

EMPLOYMENT

MARITAL STATUS

PARENTS

FAMILY

REGION

3 ETHNICITY TRACKING DATA

KEY FINDINGS
MARKET ON THE MEND SPRING BUYING SEASON: BUYERS CONTEMPLATORS REMAIN
AND SELLERS ARE MOTIVATED IN THE GAME
 77% of consumers feel confident about
market and property value recovery  Rising optimism adds an additional  Contemplator confidence in the real
 A 4% point increase from end-of- dimension to the spring buying season estate market and property values rose
year and 7% points from one year BUYERS: 12 points from mid-2012
ago  are most inspired by a good deal
 will consider alternatives if they  Contemplator favorability of the real
 Owning a home is CONSISTENTLY don’t find the home of their estate market is also up 10 percentage
important to over 96% of Americans dreams this season points from Q2 2012
 Owning a home is especially  Believe home buying will be
important to women as well as easier this spring because  Contemplators are still waiting for the
Generations X and Y homeowners want to sell right opportunity
SELLERS:
 The time to buy is still now, with 87%  are determined to sell this spring
saying Americans should buy homes while season and will continue to try
rates and home prices are low and sell their home if they don’t
sell
 need to find the right home first


Market on the Mend

© Copyright 2012 Daniel J Edelman Inc.

People feel that the real estate market and property
values will recover Younger generations are
more confident that the real
estate market will begin to
77% 80%
recover
79%
75% 73%
72% 73%
70%
25-34 35-44 45-54 55-64

81% 79%
76%
72%

Very Confident/Confident/Somewhat Confident
S W NE MW
Q1 2012 Q2 2012 EOY Q3/4 2012 Q1 2013

Q13. Considering the US 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? Top 3 Box, 5-point scale (Very confident, Confident, Somewhat Confident, Not Very
Confident, Not At All Confident)

Favorability perception of the real estate market has increased
Younger generations have a
Overall Perception of U.S. Real Estate Market more favorable perception of
the real estate market

71% 73%
62%
64% 63% 65% 56%

25-34 35-44 45-54 55-64
37% 37% Favorable + Somewhat Favorable
34%

Favorable Unfavorable
Total Q2 2012 Total EOY Q3/Q4 2012 Total EOY Q1 2013

Q12. 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?

While confident, Americans are also cautious about the
recovery
Younger respondents and
those in the South are less
Thoughts on “projected” housing recovery likely to say that the housing
recovery will be slow
44% 47%
42% 39% 40%

25-34 35-44 45-54 55-64
20%

12%
10% 9% 6%
45% 47%
42%
It will be slow A legitimate There is no Homes bought A bidding war Another Housing 35%
uptick in home housing recovery out by large between buyers Bubble
buying financial and sellers
institutions, like
banks and private S W MW NE
equity companies

Q35w2. What are your thoughts on the projected housing recovery?

Ultimately, owning a home remains important to 96% of Americans
All age groups believe that owning a
home is important. Women are more
Importance of Owning a Home likely than men to say it is Very
Important
78%
75% 74% 97% 98% 96% 95%
96%

25-34 35-44 45-54 55-64
Very Important + Somewhat Important

78%

21% 22% 70%
20%
2% 3% 3% 1% 1% 1%
Women Men
Very Important Somewhat Important Not Very Important Not At All Important
Very Important
Total Q2 2012 Total EOY Q3/4 2012 Total Q1 2013

Q21. How important is owning a home to you? Select one response

And Americans are aware of market opportunities

13%

74%
“With interest rates at historically
low levels, now is a great time for
me to buy a home”
Q25

87%
Q27

Americans should buy homes while mortgage rates and average home prices are low
Rates and prices may decline further so people should wait to buy
Q27. Which of the following is closer to your view?
Q25. How strongly do you agree or disagree with the following statements? NET Agree, Top 2 Box
Strongly Agree, Agree, Somewhat Agree, Somewhat Disagree, Disagree

The Spring Buying Season: Buyers and Sellers
Are Motivated


Buyers want good deals and job stability before purchasing a
home this spring season
Consumers WITHOUT children are
significantly more likely to look for a
Top factors most important for home purchasing this upcoming Spring season good deal compared to those WITH
children

77% 83%
80%

59% 56% WITH Children WITHOUT
Children
40% Want a “GOOD DEAL”
35%
25%
4%

A good deal Job stability An abundance of Wanting to have A good Good weather in other
homes on the a place with Broker/Agent the Spring
market outside living Season
space

Q28W2. Please choose the top three factors you believe to be the most important for home purchasing this upcoming Spring season.


Consumers who feel it will be easier to buy a home this spring
season feel it because homeowners want to sell and a belief that
there is a large inventory
Easier to buy because …

69%
64% 63% 61%

38%

5%

Homeowners want Home prices are Economy is Home prices are Homebuyers will Other
to sell low because of improving lower than be able to spend
large inventory expected less than originally
intended

Q33W2. Why might it be easier to buy a home this Spring season? Base = respondents who chose easier

Consumers are motivated to find a home

If you don’t find the home of your dreams this spring season what are you most
likely to do
48%

26%

10% 7% 9%

I plan to continue to I plan to wait until next No matter what it takes, I I plan to build my own Other
shop around and would season am determined to buy a home
consider alternative home this season
areas in which I wouldn’t
normally

Q36W2. If you don't find the home you dreamed of this Spring, what are you most likely to do?

Sellers are determined to sell this spring season
If you don’t sell your home this spring season, what do you plan to do with
the home?

87%

67%
62%

36%
33%

15%

Continue to try to sell my Consult with my broker/agent Make repairs to or Use my home as a down Rent all or part of my home Other
home on how to better market my redecorate my home payment or leverage for
home another purchase

Q41AW2. If you cannot sell your home this Spring season, please choose the top three options for what you plan to do with your current home?
Base = sellers

In order to sell, sellers want to find the right house to buy,
and to make a profit
Top Reasons for Selling:

23% 22%

What would it actually take to sell your home?
46%
43% Relocation Buy a better
home
30%
27% 25%
20%
17% 15% 14% 13%
8%
I need to find I have to make I need to feel I need to make I need to get at An all cash sale Prices need to I need to know My Other None of the
the right house a profit right about sure I won't least what I go up for me to how prices broker/agent above
to buy first general have any paid for my sell, to cover might increase must make me
economic financing home my mortgage over the next 5 aware of all my
conditions troubles years options

Q39W2. What will it take for you to sell your home this Spring season?
Q38AW2 : What would motivate you to sell your home this Spring season?

Contemplators Remain in the Game


Contemplator confidence is up 12 percentage points from Q2
2012

64% 67% 69%
57%

Very Confident/Confident/Somewhat Confident

Q1 2012 Q2 2012 EOY Q3/4 2012 Q1 2013
Q13. Considering the US 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? Top 3 Box, 5-point scale (Very confident, Confident, Somewhat Confident, Not Very
Confident, Not At All Confident)

Similarly, Contemplator NET favorability jumped 10 percentage
points from Q2 2012

50% 52%
42%

NET Favorable + Somewhat Favorable Perception of Real Estate Market

Total Q2 2012 Total EOY Q4 2012 Total Q1 2013
Q12. 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?

Consistent with end-of-year findings, waiting for the right opportunity
is the reason for Contemplators’ not buying or selling
Reasons for Not Buying/Selling
41%
Waiting for right opportunity 44%

31%
I just haven’t found the home I want yet 32%

29%
Trying to save more money 32%

30% Contemplators EOY Q3/4
Instability of U.S. economy 31%
Contemplators Q1 2013
27%
Not sure about finances 25%

29%
I’m worried I won’t be able to sell my current home 24%

19%
I’m not confident I can set the right price for my home 18%

Q16. Earlier in the survey, you indicated that you’ve been considering buying or selling a home for the past year. For what reasons, if any, have you not yet bought or sold a
home? Select all that apply.
Not Included: I’m worried that home values haven’t stopped dropping, I’m worried about my job/employment, I’m nervous about having a new mortgage, Lack of focus/time,
Lack of knowledge/overwhelmed by process, Attachment/Memories associated with current home, I’m not confident I can bid the right price for a new home, Other

Prudential Real Estate
Q1 Consumer Outlook Survey

Prudential Real Estate Q1 2013 Outlook Survey

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