With TV shows like HGTV’s “Love It or List It,” it’s easy to see that weighing the decision to ‘make do’ with your current home or sell it and upgrade to one that immediately serves your present needs is a growing trend amongst homeowners -- especially as interest rates continue to steadily climb.
Concurrently selling and buying a home is a huge undertaking -- one that can require a considerable investment of time, money, and emotional labor. Additionally, there are more things to consider when deciding to sell and buy at the same time. Decreasing listing prices in your market could make upgrading more financially feasible, but it could also mean not getting as large of a return on investment on the home you’re selling. Available houses might fit your budget but lack features you want (or need) in your new home.
Simply put, the decision to keep or sell a home is not always and easy one and is dependent on a variety of important factors.
In October, Open Listings surveyed more than 500 current homeowners (ages 25-64) to get a better understanding of what these factors might be — and whether more homeowners are choosing to love or leave their homes.
First, we wanted to get a lay of the land and learn a little bit about these homeowners.
Of the homeowners surveyed, over 45% have owned their homes for 10 years or more, 36% have owned their home for 5 years or less, and the remaining 18% have owned their homes for between 6-10 years.
Residing in Their Dream Home or Still Looking?
We then asked homeowners if their current homes were their dream homes, shockingly, 61% said no, with results being evenly split across age groups.
Contrary to what this figure might indicate, most respondents said that they weren’t in a hurry to sell and upgrade. Over 63% of respondents, the majority of whom are 45-54 years old, said they would consider selling their current home to buy a new one in no less than five years. These are who you might call the “as the kids get older” buyers. They realize that their current homes aren’t their forever homes; however, they believe them to be more than suitable during the early stages of child-rearing.
Alternatively, around 23% of homeowners, who were mostly millennials between the ages of 25-34, said they would consider selling their homes to buy a new ones in the next 1 to 5 years. Of this subset, 32% noted they don’t consider their current homes to be their dream home.
Homeowners who indicated that they were looking to sell their homes within the next few months to a year were in the minority. This group of respondents also proved to be more flexible on their selling timetables as they indicated they were more likely to consider selling their current home “as soon as they got a good offer.”
What Makes a Dream Home for Homeowners and Buyers Alike?
For many homeowners, making the decision to buy or sell starts with being unsatisfied with their current homes and ends with finding a home that better meets their needs.
When asked what issues with their current homes would factor most into their decision to sell and buy a new home, 22% of respondents cited noise pollution (both from nearby traffic and neighbors).
For the majority of respondents (67%), their biggest determining factor for selling their homes is upgrading. These homeowners are looking to get newer kitchens (20%), updated bathrooms (15%), less outdated roofing and windows (13%), carpeted floors (12%) and pools (7%).
What’s interesting about this insight is that pools are found on the lists of features many new homebuyers want in their dream homes. However, the required maintenance seems to make those looking to upgrade homes reconsider the luxury.
While issues like noise caused by traffic are generally out of the control of the homeowner, outdated interior and exterior elements like flooring, plumbing, windows, and roofing can not be an eyesore to the homeowner, but also a financial nuisance. Updating old fixtures and systems can come with high price tags and major disruptions to daily living. Of those who cited outdated kitchens and bathrooms as something they’d want to avoid in a new home, 62% and 57% were over 45 years old (respectively).
When asked to consider amenities and features they’d want in their next homes that they do not currently have, many responses focused on aesthetics, convenience, and small luxuries. 19% would like a garage, 18% wanted hardwood floors, 16% wanted central air, 15% wanted quartz or granite countertops, 9% wanted a laundry room, and 6% were hoping to snag stainless steel appliances with their next home purchase.
Loving It or Listing It?
73% of all respondents said they would put it toward current home renovations when asked what they would do if they had $10,000 to allocate towards housing expenses. The remaining 27% said they would put the funds towards a down payment for their next home.
However, that number changes pretty drastically when you look at millennial homeowners. It seems that millennials who bought their starter homes earlier in life are already on the look for their next homes. 41% of this group said that if they would use the $10K as a down payment on their next home in lieu of allocating the money towards current home renovations. That’s 17% higher than all other age groups.
Would changes in the housing market would make a difference? Unsurprisingly, this question was met with a resounding “yes.” 73% of respondents said that a significant drop in local listing prices would deter them from looking for a new home. Despite houses in their market decreasing in price, the fear of losing out on a higher sales price for their current home won out for these homeowners.
So what would make these homeowners actually decide to move? Upsizing and downsizing came out on the top of the list. 29% of respondents said they would want to downsize, and 27% said they would want to upsize. Of those who want to downsize, 48% were 55-64 years old who are experiencing an empty nest for the first time in a while. For those looking to gain more space, 26% were 25-34 years old and 34% were 35-44 years old. These homeowners are likely just starting to build their families or realizing that their growing families need more space.
Other respondents cited relocating for a job (19%), finding a safer/ nicer neighborhood (12%), and shortening commute times (6%) as motivation for selling their homes and buying new ones.
Regardless of the motivating factors at play, it seems that most homeowners aren’t willing to part with their homes unless the situation is just right. As it turns out, most of these homeowners are #TeamStay. Even if it doesn’t have all of the bells and whistles they’d like, they would rather wait out the market, weigh their options, and, even, show their current home some TLC, rather than “leave it.”