Washblog

Homebuyers' attitudes vary in statewide research study
From the September (October?) 2008 newsletter of the Building Industry Association of Washington State

In response to Washington's struggling housing market and in an effort to assist builders, BlAW hired Hebert Research to conduct a study of consumer attitudes in the current economy. Hebert Research is a well respected research and polling firm specializing in providing guidance to businesses in today's tough economic climate.

Hebert Research recently completed four regional focus groups around the state to measure consumer opinions on the housing market and economy. Each focus group included 12 potential homebuyers and concentrated on determining consumer attitudes and any apprehension about future home purchases.

Not surprisingly, a majority of focus group participants expressed uncertainty whether the state's economy would improve, decline, or stay the same over the next one to three years and many expressed insecurity about their employment or the employment of family and friends. Many focus group participants believe the unemployment rate is higher than what is reported.

Consumer Perception
When asked about the current condition of Washington's real estate market, focus group members believe they have personally seen evidence of a slowdown in the housing market. These opinions were based on their observations in their local communities regarding the number of houses for sale and the length of time "for sale" signs remained in the front yard. Clearly there is unease and a perception of instability in housing prices.

Some of the responses clearly express this sentiment and mood of home buyers:

• "A lot of houses in my neighborhood have been for sale for months. I can't think about buying something else unless 1 know I can sell my house."
• "I could move now, but in this market I think I'd lose a lot of money. I'd rather wait until the market firms UP some."
• "I can't think about buying real estate unless I feel sure I'll have a job."

On the positive side, focus group participants understand housing and real estate in the long-term are good investments that appreciate over time. Additionally, focus group participants broadly agreed the timing of their decisions to purchase real estate are, and will continue to be, based primarily on life-cycle events such as marriage, starting a family, employment relocation, growing family, children growing up and leaving home and retirement.

Media's Role
Our state's market slowdown was initially fueled, and subsequently compounded, by media coverage of the housing doom and gloom plaguing other states. When Washington's housing market was still performing respectably well, our media was reporting on the housing crisis in other states without making the distinction our state was, at the time, the exception. The more media talked about a slowdown, the more apprehensive consumers became about buying a home, which in turn prompted a slowdown-thus, a self-perpetuating cycle.

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The best tonic for an ailing housing market and economy is the election of Dino Rossi as our next Governor.

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So how much influence does media really have on consumers' perception of our state's housing market? The Hebert Research report indicates an interesting conflict in consumers' opinion of the media. Focus group participants have a high degree of skepticism regarding mass media and newspapers. Despite this negative opinion, participants paradoxically said they obtain information on the economy and the real estate market from a mix of radio, television, local newspapers, and websites. So clearly consumers are influenced by what they hear from the media.
Brian Minnich Political Affairs Director

Helping Builders
Much blame has been laid at the feet of the subprime mess, bad decisions by banks and the consumers who took on too much debt. What the media and public ignore is why this happened. Quite simply, houses in this state and many parts of the country have become unaffordable for the middle class. Is it any wonder financial institutions and even the government were getting "creative" in an attempt to put families in homes? Is it any surprise homebuyers were willing to take risks in order to buy a home?

Unfortunately, there are no "silver bullets" to changing consumer perception about the housing market in Washington State and the nation. But, the consumer focus groups did provide useful information on how to effectively market homes and capture existing buyers in this grim housing market. BIAW will be developing and disseminating this information to members in the upcoming weeks. (See pg. 9 for seminar information.)

Secondly, and in the long-term, BIAW is working on a housing legislative package for the 2009 Legislative Session to provide a stimulus to re-energize Washington's housing market. A large part of this legislative effort will simply focus on reducing government regulatory costs that have put housing out of reach for the average buyer. A recent University of Washington study found that current land use regulations add roughly $200,000 to the cost of a home in Seattle and the Puget Sound region.

Finally, the best tonic for an ailing housing market and economy is the election of Dino Rossi as our next Governor.