(This is Part 1 of a two-part series. See Part 2.)
The NAR Profile of Home Buyers and Sellers for 2008 reveals some important secrets Realtors can’t afford to ignore. Here’s the inside scoop.
1. Gen X and Gen Y Rule the Buyer Market
If you’re working with buyers, you can no longer ignore the fact that 60 percent of today’s buyers were born after 1964 (i.e. are members of Gen X and Gen Y). In fact, 54 percent of first-time buyers are in the 25-to-34 age group. For Gen X and Gen Y, the primary motivations for buying was their desire to own a home, a job-related relocation or move, the desire for a larger home, or a change in their family situation.
Opportunity: As 75 percent of all first-time buyers are currently renting an apartment, consider marketing to tenants in high-end rentals. For buyers ages 18-24, 62 percent used social networking sites several times per week. That number drops to only 33 percent for buyers ages 25 to 44. To earn the right to do business with this growing group of young buyers, become an active part of the online conversation. This does not mean promoting your services. Instead, consider sites such as Facebook and Twitter to be similar to a social gathering where you meet others who share common interests. Gen X and Gen Y want to get to know you in a social environment prior to doing business with you. Dump the vanity marketing that focuses on you and your accomplishments. Instead, show up as an interesting, fun person who also happens to be a competent and likeable real estate professional.
2. Empty nests
Sixty-two percent of all buyers have no children living at home. Among this group, nearly twice as many single females (24 percent) purchased homes as compared to single males (12 percent). Married couples overwhelmingly preferred single-family residences (86 percent), compared with 63 percent of single females and 65 percent of single males. In terms of preferring townhouse or apartment-style condominiums, only 10 percent of married couples preferred this type of property, compared with 31 percent of single females and 30 percent of single males.
Opportunity: Niche your marketing efforts to fit the type of property you are selling. For example, Gen X (born 1965 to 1976) appears to be putting off marriage and having a family as opposed to Gen Y moms (born 1977 to 1994) who have an average of 2.3 children. Thus, Gen X buyers may be better candidates for condominiums or townhouses, while Gen Y couples may be better candidates for single-family homes. In terms of marketing to Gen X and Gen Y, these two groups dislike newspapers. They do read magazines, especially those focused on lifestyle. When marketing to both Gen X and Gen Y, show pictures of their age group enjoying the good things about living in your area, especially pictures of singles and/or families who are having fun. For older buyers, focus on couples downsizing or buying second homes.
3. "Location, location, location" is still true
While people may debate what really matters most to homeowners, NAR’s research shows that the number one concern for all buyers (62 percent) is quality of the neighborhood. Convenience to work was second (51 percent), while overall affordability of homes, convenience to friends and family, and quality of the school district rounded out the top five. Given the high price of gas during the time the survey was conducted, it’s not surprising that 41 percent of all buyers said commuting costs were very important and another 39 percent said they were somewhat important.
Opportunity: When working with buyers, be sure to explore what constitutes a "quality" neighborhood as well as potential commute times. Gen X and Gen Y place more emphasis on time spent with family and friends. Be sure to discuss these important issues prior to showing them property.
4. Age influences how long the buyer will live in their home
The median time that buyers between the ages of 18 to 24 expected to stay in their homes was six years, compared with 10 years for those 25 to 44 and 15 years for those over the age of 45.
Opportunity: Younger homeowners who have been in their homes four to five years are more than three times more likely to put their property on the market compared to older homeowners. While 21 percent of the 18- to 24-year-olds plan to sell in four to five years, only 17 percent of those between the ages of 25 and 44 planned to sell. For those 45 to 64, only 6 percent planned to sell that quickly and only 3 percent for those 65 and older. On the other hand, the prime time for buyers to purchase a second or retirement home is between the ages of 50 and 60.
Do you need more help with today’s buyers and sellers? If so, look for more tips in Part 2.
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of "Real Estate Dough: Your Recipe for Real Estate Success" and other books. You can reach her at Bernice@RealEstateCoach.com.
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