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The Reggie Cowart Team
RE/MAX Austin
Advantage
Each Office
Individually Owned
and Operated
Serving:
Austin - Westlake - Round Rock - Lakeway - Pflugerville - Cedar Park
12444 Research Blvd.
Austin, TX 78759
512-219-3013
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Singles Home Buying
The singles scene: Growing number of solo buyers
by Bridget McCrea
To help single homebuyers narrow down their choices during the home-selection process, Reggie Cowart of RE/MAX Austin Advantage sometimes makes an unorthodox suggestion: He tells these buyers to bring their moms along. “My male friends turned-clients have a hard time making their housing decisions alone, so I just tell them to bring Mom—or a trusted friend,” says Cowart. “Even when they do find their dream home, I find that they hold back a bit and need that extra assurance.”
Cowart, who sold over $5 million in properties in 2003, 40% of which involved single buyers, has discovered that single clients sometimes make him work a little harder in the early stages of the selling game. “Instead of picking a certain location or price range,” he says, “singles usually want to see everything in the whole city.”
Once the home-selection process is over and the transaction kicks into gear, Cowart spends the next few weeks walking his single buyers through the process. To help move the transaction along, Cowart hands out a buyer’s checklist and a purchase contract to clients prior to any deal-making, to make sure they understand the process completely.
Most importantly, Cowart says that once Mom gives her opinion on the home, he steps up to serve as a trusted advisor for his single clients, since they don’t have a significant other to bounce ideas off of. “You go just a bit beyond the regular REALTOR® duties and participate in the conversation kind of like a spouse would,” says Cowart, who is 29 and single himself.
Growing solo
The number of single homebuyers is on the rise, thanks to changing lifestyles, low interest rates, and more attainable mortgage financing. According to the 2003 National Association of REALTORS® Profile of Home Buyers and Sellers, as recently as 1995, 70% of buyers were married couples. Last year, just 59% of buyers were married. NAR reports that the number of single women homebuyers is on the rise. One in five homes last year was purchased by such buyers, while just one in 10 was bought by single men. The biggest change in the past decade appears to have happened between 2001 and 2003, when the number of single buyers jumped from 22% of all buyers to 32%.
A March 2004 study from Hackettstown, New Jersey-based SMR Research Corp shows that single buyers may soon make up the majority of homebuyers who finance a home with a mortgage. The company based its predictions on more than 150 million loan applications reported in Home Mortgage Disclosure Act filings of mortgage lenders over the last 14 years.
According to SMR, single borrowers have grown steadily as a portion of all homebuyers who use mortgage financing since 1990, when they were only 26.7% of the home purchasing market. That number reached 43.2% by 2000, and 46.7% in 2002 (the last year for which hard counts are currently available). According to SMR, the statistical trend line suggests that this will be the year when the percentage of single borrowers reaches over 50%.
“The rise of single homebuyers is one of the biggest demographic changes in recent American history,” says SMR President Stuart A. Feldstein. “But this change has gone almost unnoticed by demographers, economists, and marketing executives.” Because of this, Feldstein says typical advertising for homes continues to show happy young couples with their happy children scampering about the yard. “In reality, such homebuyers are becoming a minority group.”
Single buyers have different needs and goals
Jack Harris, research economist with the Real Estate Center at Texas A&M University, has also noticed a pickup in the number of single homebuyers, and says such buyers tend to take an investment approach to the market. “They know they can buy a home for less than they would rent for, so they’re out there buying,” says Harris. “They like condominiums, they’re not concerned about traditional buyer issues like schools or having extra space, and they’re putting money into housing instead of the stock market.”
Cowart says the fact that people are waiting longer to get married and start families, compounded by a high national divorce rate, is pushing more single buyers his way. “They want to put their money somewhere, and they need tax write-offs,” says Cowart, who reaches out to single buyers through several means, including a comparison sheet that outlines the advantages of owning versus renting. Throw in the tax breaks associated with homeownership, he says, and it makes a compelling case for any single person.
“We talk a lot about building assets,” says Cowart, who recently worked with a single woman who had received a $10,000 cash gift from her grandmother. The money was to be allocated for her future wedding, but when Cowart explained the benefits of putting the money into a home, the woman used it instead as a downpayment on a condo. “She’s living in the condo for less than what she was renting for,” Cowart says. And he believes it is likely her equity will grow more in the condo than had the money been invested in a CD or put in a money-market account.
Singles are move-up buyers, too
At Ebby Halliday’s In-Town office in Dallas, REALTORS® Judy Hillier and Jane Ann Nelson have also been working with more singles lately. In the business for 25 years, Hillier estimates that more than half of their 25 transactions, which totaled $15.5 million in sales in 2003, involved single homebuyers. She says the trend is being driven by the low-interest-rate environment and by singles from metropolitan areas like Boston, New York, San Francisco, and Washington, D.C., who are relocating to the Dallas area for jobs.
Hillier says she reaches the singles market through local-media advertising that highlights the convenience of an in-town location, flexible lending programs, and her college degree in interior design. She says such buyers are looking for lifestyle, convenience, security, and location above all else, and that they gravitate to her design expertise to help them shape their purchases to fit their own lifestyle needs.
“It really is a package deal,” says Hillier. “I’m working on three penthouses right now.” Not all of Hillier’s single buyers are at the penthouse level. Some need more help with financing, particularly those who are recently divorced and trying to get their financial picture into shape. “We have affiliations with many different lenders who can do all types of financing, which really helps,” she adds.
In exchange for their efforts, Hillier says she and Nelson have developed long-time relationships with customers who call on them when it’s time to move up. Single clients don’t move up only when they get married. Recently, for example, they sold a 2,300-square-foot condo for a single homeowner who then turned around and purchased a 4,600-square-foot condo. “He wanted more space,” says Hillier.
In Lewisville, Scott Smith, broker-associate with RE/MAX Advantage, says about 30% of his business comes from single buyers, who respond to his sign riders and newspaper ads touting “Zero Down Financing.” He works with a number of lenders
who offer such programs and says they work like a charm with single buyers who may not have cash readily available for a downpayment.
Smith says his biggest challenge with singles is getting them qualified for their desired home on a single income or with a financial history that involves an ex-spouse who didn’t manage his or her finances adequately. “Sometimes a couple will split up and one of the pair will have a car repossessed, with the other person not even knowing that he or she was listed on the loan until a lender pulls their credit report,” says Smith. “That’s the kind of stuff we run into.”
Singles not too interested in schools and neighborhood associations
In real estate for 11 years, Peter Dennison has worked with a large number of both single and married homebuyers. A sales associate with Keller Williams Realty in Austin, Dennison has closed about $4 million in transactions so far this year, and estimates that 30% of those closings involved single buyers. When working with them, Dennison says he often has to shift gears, knowing that their hot buttons are much different than their married counterparts.
Dennison says lifestyle and close proximity to the workplace are by far the most important considerations for singles. Not having a yard to cut or house to paint is also key, says Dennison, as are nearby entertainment and leisure activities like parks and lakes. Like Smith, Dennison has found financing to be the primary challenge, particularly if the buyer wants to factor a roommate into the picture. Other challenges include the buyer not having established credit or a high enough income to qualify for a conventional mortgage.
To work through it, Dennison says he sits down with buyers to discuss their current needs, as well as where they think they’ll be three to five years down the road. “We look at whether they’re going to buy for short-term or long-term, then we find a property that fits their needs,” says Dennison, who does his part by researching the various amenities available at certain condos, then matching his buyers up with them according to their individual wants and needs.
“It’s very different with families, who are more interested in schools, neighborhoods, and homeowners associations,” says Dennison. “Singles tend to accommodate their lifestyles around extracurricular activities, sports, and entertainment. The differences are subtle, but they’re definitely there.”
Looking ahead, Cowart sees the single homebuyer market growing steadily, but says the average real estate agent has to go the extra mile if he wants to work with clients who are purchasing a home on their own. An agent must educate himself on the market, its needs, and the various lending programs that work best for single buyers.
“I see a lot more singles educating each other, watching one another buy homes and wanting to do it themselves, so it’s definitely catching on,” says Cowart.
With a little effort, agents can play a role in that education, too.
Bridget McCrea is a writer and former real estate agent in Dunedin, Florida. Her book, The Real Estate Agent’s Field Guide—Essential Insider Advice for Surviving in a Competitive Market, was published this year by AMACOM Books. |
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