First-time buyer survey: Family features, ample storage most desired amenities in a home

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First-time buyer survey: Family features, ample storage most desired amenities in a home

First-time buyers are one of the most important buyer groups in the home building market. Between July 2009 and June 2010, first-time buyers represented half of all new-home sales in the U.S. — up from an average of around 40 percent during the last decade, according to the National Association of Realtors.

So, what does this vital buyer group prefer when it comes to new homes and communities?

Not surprisingly, family-friendly features such as neighborhood schools, walking/biking paths, and parks rank highest among community features (see charts below), according to a January 2011 survey of Professional Builder readers. When it comes to home features, ample garage space, walk-in closets, and a family room ranked highest among respondents. Other desirable home features include an open-plan design, walk-in shower, master bathroom with dual vanities and separate tub and shower, and energy-efficient systems, including HVAC/furnace, appliances, and high-performance windows.

Proximity to community amenities such as mass transit, major highways, employment corridors, and entertainment/restaurants is more important to first-time buyers versus other buyer segments, such as move-up buyers. Nearly 54 percent of respondents said location to key amenities is either somewhat more important or much more important for first-time buyers than other buyer groups.

More than half of builder respondents (55.9 percent) said their first-time buyers would prefer to have a smaller home with a higher level of finish than a larger home with just the basics. To that point, one builder respondent said: “The key is designing smaller, more-efficient homes with better use of space, green features, nice kitchens and master suites, and open plans.” Another said: “Start small, stay traditional, and build quality with energy efficiency.”

The biggest obstacle to selling to first-time buyers is being able to offer competitive pricing. Half of respondents said competitive pricing was among their biggest challenges, while nearly a third (30.7 percent) said securing buyer financing was a major obstacle. Other challenges include having the right mix of home features (28.2 percent), educating buyers on the home-buying process (23.7 percent), and selling buyers on the benefits of home ownership (9.6 percent).

“We’re constantly stressing the importance and benefits of owning versus renting, despite recent negative press,” said one builder. “The Time magazine article did not help the new-home industry.”

The threat of the mortgage-interest deduction going away is not helping either, said one builder. “Buyers are scared to death that they will not be able to maintain their mortgage if the deduction goes away like other deductions have done. It’s crucial that we ensure home mortgage interest remains a deduction.”

Rate the importance of the following home features to your first-time home buyer clients.

Extremely important; Somewhat important; Neither important nor unimportant; Somewhat unimportant; Not at all important

• Two-car garage 52.7%; 34.9%; 5.5%; 2.7%; 4.1%           
• Walk-in closet  46.9%; 41.4%; 9.0%; 1.4%; 1.4%
• Energy-efficient HVAC/furnace 42.8%; 39.3%; 11.7%; 5.5%; 0.7%
• Family room 42.7%;  36.6%; 13.1%; 4.4%; 4.1%
• Open-plan design 42.0%; 39.2%; 16.1%; 1.4%; 1.4%
• Energy-efficient appliances 31.9%; 40.4%; 21.3%; 5.7%; 0.7%           
• Green/high-performance design (e.g., insulated windows, air sealing package) 26.1%; 35.2%; 23.9%; 8.5%; 6.3%
• Walk-in shower 25.7%; 41.0%; 16.0%; 9.7%; 7.6%
• Master bathroom with dual vanities and separate tub and shower 24.7%; 43.7%; 18.3%; 6.3%; 7.0%           
• Gourmet or island kitchen 23.8%; 37.8%; 30.1%; 3.5%; 4.9%
• Pantry 21.3%; 46.8%; 19.2%; 8.5%; 4.3%
• Outdoor living areas 18.9%; 39.6%; 23.8%; 7.7%; 10.5%           
• Living room 18.8%; 31.3%; 25.0%; 15.3%;  9.7%
• Fireplace 17.4%; 31.9%; 28.5%; 11.8%; 10.4%
• Front porch 13.2%;  31.9%; 37.5%;  8.3%;  9.0%           
• Home office 11.1%; 22.9%; 39.6%; 14.6%; 11.8%           
• Bonus/flex spaces 9.8%;  31.5%; 39.9%; 12.6%;  6.3%           
• Separate formal dining room  9.1%; 26.6%; 30.1%; 18.2%; 16.1%           
• Whirlpool or air-jet bathtub 7.0%; 18.9%; 38.5%; 15.4%;  20.3%           

Base: 141; Professional Builder, January 2011

Rate the importance of the following community amenities to your first-time home buyer clients.

Extremely important; Somewhat important; Neither important nor unimportant; Somewhat unimportant; Not at all important

• Neighborhood school 31.9%; 39.7%; 15.6%;  7.8%; 5.0%
• Walking/biking paths 9.8%; 41.3%; 37.1%; 6.3%; 5.6%           
• Parks 6.4%; 49.3%; 34.5%; 4.2%; 5.6%
• Fitness center 6.4%; 20.6%; 41.1%; 12.8%; 19.2%           
• Restaurants/retail within walking distance  5.7%; 23.4%; 36.9%; 19.2%; 14.9%
• Community pool  3.5%; 16.9%; 36.6%; 18.3%; 24.7%           
• Clubhouse 2.8%; 11.4%; 43.3%; 14.2%; 28.4%           
• Water features (e.g., retention pond, stream, fountain) 2.1%; 9.3%; 45.0%; 22.9%; 20.7%           

Base: 141; Professional Builder, January 2011

Approximately what percentage of your first-time buyers are single?

• Less than 10 percent            74.2%           
• 11-25 percent            12.8%           
• 26-50 percent            8.3%           
• 51-75 percent            4.7%           
• More than 75 percent            0.0%           

Base: 147; Professional Builder, January 2011

Does your company offer financial assistance to first-time home buyers (e.g., help with loan paperwork, finding a lender, interest rate buy down, help with closing costs, etc.)?

• Yes            40.5%           
• No            59.5%           

Base: 148; Professional Builder, January 2011

From where does your average first-time buyer get their down payment?

• Savings            53.4%           
• Gift/loan from relatives            22.6%           
• First-time home buyer tax credit            6.2%           
• Incentive program (from home builder or other source)            8.2%           
• Other            9.6%           

Base: 146; Professional Builder, January 2011

How important is the location of the community (e.g., near mass transit, major highways, employment corridors, shopping, services, entertainment) for first-time home buyers compared with other buyer segments, such as move-up buyers?

• Much more important                        16.7%           
• Somewhat more important            36.8%           
• Neither more nor less important            31.3%           
• Somewhat less important            10.4%           
• Much less important            4.8%           

Base: 144; Professional Builder, January 2011

In general, would your first-time home buyers rather have a smaller home with a higher level of finish or a larger home with just the basics?

• Smaller home with higher level of finish 55.9%           
• Larger home with just the basics            44.1%           

Base: 143; Professional Builder, January 2011

What are your biggest challenges when it comes to marketing and selling to first-time home buyers?

• Competitive pricing            50.0%
• Helping buyers secure financing             30.7%
• Having the right mix of home features            28.2%           
• Educating buyers on the home-buying process (e.g., setting realistic expectations)            23.7%
• Having the right mix of community features and location            10.3%
• Selling buyers on the benefits of home ownership            9.6%
• Offering green/high-performance features at a competitive price            7.7%
• Other            3.8%

Base: 156; Professional Builder, January 2011

Please indicate the extent to which you agree or disagree with this statement: “The expiration of the first-time home buyer tax credit has had a severe impact on our bottom line.”

• Strongly disagree            11.6%           
• Somewhat disagree            10.9%           
• Neither agree nor disagree            27.2%           
• Somewhat agree            31.2%           
• Strongly agree            19.1%           

Base: 156; Professional Builder, January 2011

Please indicate your company’s primary business.

• Diversified builder/remodeler            26.3%           
• Custom home builder            25.0%           
• Production first-time buyer            13.5%           
• Other            13.5%
• Architect engaged in home building            7.7%           
• Production move-up buyer            7.1%           
• Luxury production            3.2%
• Manufactured, modular, log home, or systems builder            3.2%           
• Multi-family builder            0.5%           

Base: 156; Professional Builder, January 2011

How many homes did your company build in 2010?

• 1-5 homes            58.1%           
• 5-10 homes            11.5%           
• 10-15 homes            7.4%           
• 15-25 homes            3.4%           
• 25-50 homes            7.4%           
• More than 50 homes            12.2%           

Base: 148; Professional Builder, January 2011

Approximately what percent of your new-home sales in the past 12 months came from first-time home buyers?

• Less than 10 percent            53.3%           
• 11-25 percent            13.3%           
• 26-50 percent            14.7%           
• 51-75 percent            6.7%           
• More than 75 percent            12.0%           

Base: 150; Professional Builder, January 2011