As the Great Recession took its toll, home buyers disappeared in droves, many of them under water on their mortgages, unemployed, or both. The trauma of that time still resonates in sales centers today. Click here for related story.
“If someone lost a home during that time, they won’t ever forget that feeling. How could you?” asks Corey Barton of CBH Homes in Boise, Idaho.
Even consumers not directly affected were alarmed by the crisis, says Dennis Webb of Fulton Homes. “Buyers became more cautious in the home-buying process,” he says. “If they were not directly affected, then they certainly know someone who was.”
Now, more than eight years into the economic recovery, builders are seeing a new breed of home buyer—more cautious, prepared, and savvy than pre-crash.
“The majority of today’s buyers are not so much spooked by their recession experience as they are simply much more budget-conscious and interested in finding a home that is both practical and manageable within their work-life balance,” says Tommy Owings, president of Atlanta-area firm Silverstone Residential. The company revamped its product line during the recession to better appeal to value-minded customers seeking efficient use of space.
David Weekley sales teams report that the recession changed buyers’ priorities, starting with the size of a home.
“Instead of looking for the biggest home they can afford, they’re shopping for a home that fits their needs at the right price. They are conscientious about the total costs to operate the home—energy bills, insurance, reserves, maintenance, and so on—which was not the case directly prior to the downturn,” says president and CEO John Johnson.
2018 buyers are more educated about the home-buying and mortgage processes, too, he says. “The majority of today’s buyers are not ‘stretching’ like they did in the early 2000s; both in regard to purchase price of the home and the mortgage financing structure.”
And perhaps most noteworthy, the downturn reshaped the way that consumers view the American dream, says Owings. “Prior to the recession, many buyers looked at homeownership predominantly as an extension of their total net worth,” he says. “A large swath of the market in general has since taken a more practical approach, in realizing that they do not all need to have mini-mansions but instead appreciate the bottom-line value, maximization of space, and the realization that a home is not just an investment but a place for homeowners and families to live and grow within a healthy means.”