Homebuyer preferences in the post-housing bubble era

Abstract

The limited availability of mortgages since 2008 prompted us to determine what motivates qualified homebuyers to choose the home they do. Segmenting homebuyers according to preferences related to the home, neighborhood, and schools enabled us to develop profiles of homebuyers. This study contributes to the literature by holistically explaining thematic preferences of homebuyers as delineated across four homebuyer segments. Using a web-based survey to gather a representative sample of US households, we ranked homebuyer preferences based on respondents’ most recent home-buying experience. The top-10 items, ranked by mean values, were divided by themes to create homebuyer segments, which enabled us to cross reference common and differentiable homebuyer preferences for each segment. Members in the segment most influenced by Neighborhood Quality were next most impacted by the first impression of the home’s exterior and interior, whereas those in the School Quality segment were next most impacted by the overall value they placed on their home and community. However, those in the Home-Exterior Details segment were much less influenced by the concept of overall value. As expected, those in the Home-Interior Details segment were next most impacted by the attention given to cleanliness, organization, and personal touches.

Keywords:

• mortgage crisis
• homebuyer preferences
• housing bubble

Notes

1. Inclusive of visible energy-efficiency items since presumably utility bill information was not uniformly available to the potential buyer.

2. All reported means are weighted in order to mitigate any potential bias resulting from this disproportionality.

3. The top-50 items were reported because their mean-value scores were all greater than 50 on a 100-point scale.

4. The average of the mean-value scores for all the items comprising each theme was determined for each segment and then ranked accordingly.

Additional information

Notes on contributors

Randall A. Cantrell

Dr Cantrell is an assistant professor and state specialist in Housing & Community Development. As a researcher and educator, his broad goals are to demonstrate the importance of linkages between the family, home, and community. He does so by focusing on: (1) how homeowners make home-upgrade decisions (view the Decision-Ade™ video at https://www.youtube.com/watch?v=WRKTlLpuUGA&feature=youtu.be); (2) building capacity within communities so they can function more effectively; (3) adapting homes for aging-in-place. His diversified background enables him to approach issues from perspectives of engineering, teaching, economics, community development, marketing research, and housing research. He has extensive industry experience working on government contracts funded by the US Departments of Housing and Urban Development, Energy, and Agriculture to improve housing and building products. Dr Cantrell is a Returned Peace Corps Volunteer who taught high-school mathematics in the French Language to students in Niger, West Africa. His secondary project while serving in the Peace Corps was that of a well driller and instructor.

Kathleen N. Beall

Ms Beall is a 2013 BS graduate from the Department of Family, Youth and Community Sciences in the Institute of Food and Agriculture Sciences at the University of Florida, Gainesville.