How well does the NAR Home Buyers and Sellers Report reflect OUR market? Our "10 square miles" is reality.

Our “10 square miles” is reality.

By Brent Katzmann, NYS Lic Associate Broker

I imagine most of you have heard the old phrase about Ithaca: 10 Square Miles Surrounded By Reality. While I still believe we live in something of a bubble here on many levels, real estate, however, is not one of them.

Perhaps you seen news reports about rising unaffordability. Or about how Millennials are the first generation to push home ownership off until age 40, on average.

The National Association of REALTORS (NAR), our industry trade association, publishes an annual Profile of Home Buyers and Sellers. The 2025 issue was just released.

Normally this report, frankly, doesn’t really reveal much that we don’t already see in our local market, and the data points seem to move very incrementally. Over the past couple of years, however, a few statistics have begun to jump out and point to an entrenched issue facing homeownership: low inventory, elevated interest rates, and recent gains in home equity among existing homeowners are making this a market that favors high worth, or well funded buyers (especially those with existing home equity or investment gains). That isn’t to say that there is no hope for first time or moderate income buyers, but it does take both planning and a close consideration of priorities.

First, let’s look at home buyers. From the NAR Buyer and Seller Profile report, “First-time buyers now make up just 21% of the market—the lowest share since NAR began tracking in 1981. Before 2008, they consistently accounted for about 40% of home sales. Limited inventory and affordability challenges have pushed many out of the market. “The historically low share of first-time buyers underscores the real-world consequences of a housing market starved for affordable inventory,” Lautz (NAR researcher) says.

Also from the report, “The median age of first-time buyers has climbed to a record 40—up from the late 20s in the 1980s. High rents and student loan debt make saving for a down payment increasingly difficult. “For generations, access to homeownership has been the primary way Americans build wealth and the cornerstone of the American dream,” says Shannon McGahn, NAR executive vice president and chief advocacy officer. “Delayed or denied homeownership until age 40—instead of 30—can mean losing roughly $150,000 in equity on a typical starter home.”

Note in the chart above that the median age of repeat buyers is now up to 62. As noted above this has become a market for well established buyers.

And yet there’s an interesting outcome when the buyers entering the market are older and largely single (46% of buyers are single or unmarried couples): households are getting ever smaller. In fact, 76% of all home buyers do not have children under the age of 18 in the home.

To me, this raises a real issue that is directly impacting the single family housing shortage we’ve been experiencing here for the past several years. We have older housing stock built for households with 3-4 or more people. If households are now 2 or fewer, we would need twice as many homes to satisfy the same population of residents who want to own, or rent, a single family home. And how many are we building? Next to none.

Regarding financing a home purchase, nationally, 26% of all sales were cash purchases in the latest study: “By comparison, between 2003 and 2010, fewer than one in 10 buyers paid all cash on a home sale. Cash buyers may be leveraging the equity from a previous sale, but with rising interest rates and tight lending conditions, they’re finding a distinct advantage in the market by being able to bypass mortgages.”

Locally, we have been well above 30% cash sales for the past several years and are already at 34% this year to date. Note in the chart below the jump in cash sales as the pandemic took off. Urban sellers were cashing out and moving to our lower cost, more rural marketplace (comparatively) and real estate felt like a safer investment than the stock markets so many investment assets were converted to real estate. Similarly, those who are financing are making more sizeable down payments on their purchase for much the same reason. Not surprisingly, use of federally backed mortgages (FHA, VA, USDA) have therefore been largely non-existent as a buyer with little to no down payment struggles to compete with those who have capital to work with. In our market area, only 4% of all sales YTD have utilized one of these three loan products versus 36% nationally for first time buyers and 23% overall.

On the seller side of the market, I found this finding particularly interesting: while one might expect that a low inventory, seller advantaged market would mean sellers could worry less about the condition of the home they are selling, assuming they would see multiple buyers interested anyway, in fact, 2/3 of homes seller (65%) did minor or major improvements to their home before selling it. And we have seen this play out locally. Even when we’ve had lower inventory available to home buyers and strong competition to purchase, our experience with home buyers is that, at the elevated values that we’re experiencing, they are holding property quality to a higher standard, often avoiding homes that feel short of being “move in ready.”

The final point that I think is important to note from this report is that, despite a relatively strong seller market overall, and despite all the industry changes over the past 15 months regarding brokerage fee disclosures, buyer representation agreements, and the proliferation of publicly accessible home sales information, owners choosing to sell on their own (known as “For Sale By Owner”, or FSBO colloquially), have actually decreased to a record low of 5% of all home sales while use of real estate professionals has continued to climb to over 90% of all sales. Why? I believe it is the value and experience that a licensed, engaged agent provides in terms of real time marketplace insight, ability to navigate regulations, contractual obligations, and advise during difficult negotiations or unexpected speed bumps. This helps sellers have confidence that they’re getting fair market value and are more likely to meet their personal and financial objectives with fewer delays or surprises.

How well does the NAR Home Buyers and Sellers Report reflect OUR market? Our “10 square miles” is reality.