Lifestory Research Reports: New-Home Shoppers’ Opinions Remain Dark About the Housing Market

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Despite national reports stating the housing market is on the mend, a new survey of prospective home buyers shows consumers believe differently.

With 68 percent of home shoppers seeing the market as unpredictable, we suspect that many consumers will approach the purchase of their home with caution.

A national study of those shopping for a new home reveals consumers remain pessimistic about the condition of the housing market, despite recovery reports from the federal government and residential real estate industry.

Lifestory Research polled 2,470 households actively shopping for a new home to determine how these consumers view the housing market today. Opinions varied based on different factors, but nearly half the survey participants responded negatively to questions about overall market conditions – with 45 percent reporting that they would describe the health of the housing market as being poor or very poor. The poll has a margin of error of plus or minus two percentage points.

“We found that more than a third of home shoppers (37 percent) see the housing market as random and unpredictable and an additional 31 percent view the housing market as being delicately balanced in which small changes in the market could alter the direction it could take – up or down,” said Eric Snider, CEO of Lifestory Research. “With 68 percent of home shoppers seeing the market as unpredictable, we suspect that many consumers will approach the purchase of their home with caution.”

Among those shopping for a home, Lifestory Research found that 27 percent of consumers remain certain that house prices are still in decline. These consumers believe that over the course of the next three months there will be small (21.4 percent) to fast (5.8 percent) declines in house prices. Detailed analysis finds that responses concerning the direction of home pricing are impacted by the current equity position of current homeowners. Those who are under water in their homes have the most pessimistic views of house pricing, with 42 percent of these consumers indicating they believe prices will decline in the next three months.

“The research results beg the question why someone would be shopping for a home if they believe the market outlook is so bleak,” said Snider. “Although we don’t know for a fact, we do know empirically that many people are forced to look for a new home due to positive pull factors, such as new jobs, or due to negative push factors, such as needing to get out of a home they can no longer afford. It is these combinations of push and pull factors that lead people to shop for homes despite any negative perceptions they may hold about the health of the housing market.”

When consumers were asked to describe the housing market as being in a healthy or an unhealthy state, researchers found that most people (44 percent) still see the market as being in a poor state. However, some signs of optimism also emerged from the poll: 42 percent of consumers stated they consider the health of the housing market to be fair, and another 13 percent reported seeing the market as good.

“Real estate, of course, is local, and there are many housing markets that we found in which consumers are optimistic about housing prices,” Snider said. “We found markets such as Washington, D.C., Dallas, Denver and Houston with more than 70 percent of consumers stating that they thought the housing market in their area was healthy.”

About Lifestory Research
Headquartered in Newport Beach, Calif., Lifestory Research is a custom marketing research firm dedicated to helping clients evaluate their brand and strengthen their understanding of their customers. The Lifestory Research team has designed and executed qualitative, quantitative and observational solutions while adhering to a client-focused ethic built on being easy to work with and delivering best-in-class insight. The company’s core competency is measuring attitudes and behaviors to accurately explain and predict bottom line impact of a client's actions. Offerings include market entry studies, segmentation studies, product development studies, branding studies, customer satisfaction and employee satisfaction research, pricing strategy and advertising studies. Lifestory’s client base spans private education, real estate, energy, financial services, medical providers and not-for-profit organizations.

No advertising or other promotional use can be made of the information in this release without the express prior written consent of Lifestory Research.

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