(This is Part 2 of a three-part series. Read Part 1, "Get rich in a niche.")
Have you adjusted your business to fit the changing demographics of today’s buyers and sellers? If not, 2008 is a great time to start.
In November 2007, NAR released its "Profile of Home Buyers and Sellers for 2007," which contains a wealth of data that aims to help you have a more successful business in the upcoming year.
1. The Generation Gap
At the NAR conference in November, John Tuccillo said, "Real estate was invented by boomers for boomers." The median age of Realtors is 52 and yet the median age of all buyers is 39. What is particularly striking is that first-timers accounted for 39 percent of the home purchases in 2007 and 68 percent of these buyers were under the age of 35. Eighty-nine percent were under the age of 45.
Opportunity: Older agents who intend to stay in the business will have to make substantial adjustments in how they conduct business. Gen X buyers and sellers are not particularly interested in having a friendship with their agent. They want what they want now with no strings attached. In contrast, Gen Y wants data, but they also want to work collaboratively with their friends and their agent to find the home they want. By the way, don’t expect Gen X or Gen Y to miss a date or some other recreational activity to go look at property. Unlike their boomer parents, they work to live, not live to work.
2. Single Women and Empty-Nesters Rule
In 2007, 40 percent of the households had children under the age of 18. In other words, 60 percent of all U.S. household are empty-nesters. Sixty-two percent of people who purchased homes in 2007 were married. Twenty percent were single women, and 9 percent were single males. In terms of first-time buyers, 25 percent were single females.
Opportunity: You can capitalize on these trends in several different ways. First, check how long couples in your area have owned their home. If they have been in a single location for a long period of time and have a large home, they may be considering downsizing or relocating. To take advantage of the high number of single female buyers, consider holding first-time-buyer seminars for local women’s groups. You can also work with a financial planner or tax attorney to hold investment seminars for professional women. Each of these can be a great niche that will feed your business for many years to come.
3. Younger and First-Time Buyers Are More Ethnically Diverse
While 87 percent of repeat buyers said that they were white, only 76 percent of the first-time buyers reported that they belonged to this group. In terms of being foreign born, 8 percent of the repeat buyers were born outside the U.S. compared with 12 percent of first-time buyers.
Opportunity: With the weakening dollar making U.S. properties more attractive than ever, the number of sales to those born outside the U.S. will likely increase. Now is an excellent time to begin marketing your listings internationally and/or in other languages. If you are fluent in another language, add a button on the front page of your Web site that says, "I speak your language." Provide a link to key pages that you have had translated into another language. Also, you can do podcasts or videos in other languages. Use your print advertising to drive consumers who speak your language to your Web site and/or blog.
4. Age Determines Purchasing Motivation
For buyers under the age of 65, the primary reason reported for purchasing a home is their desire to own their own home or to establish a new household. For those ages 18 to 24, an overwhelming 74 percent reported this as their primary reason to purchase. In contrast, those age 65 and older reported that their primary reason for purchasing was to downsize to a smaller home, purchase for retirement, and/or to be nearer family, friends and relatives.
Opportunity: Examine the demographics of the areas where you work. What percentage of the population falls into these different age groups? The key is to adjust your marketing campaigns to fit the specific needs of these various groups. For example, if you are marketing to first-time home buyers, focus on marketing the American dream of owning your first home. If you have a large number of people who are over the age of 65 in your area, consider a marketing campaign describing the advantages of condo living where they can lock the door and travel without having to worry about house maintenance. If there is a large retirement community in your area, you can market the fun and active lifestyle.
If you want more of NAR’s business tips for 2008, don’t miss next week’s article.
Bernice Ross, national speaker and CEO of Realestatecoach.com, is the author of "Waging War on Real Estate’s Discounters" and "Who’s the Best Person to Sell My House?" Both are available online. She can be reached at bernice@realestatecoach.com or visit her blog at www.LuxuryClues.com.
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