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As overall homebuyer demand wanes amid rising mortgage rates and inflation, there’s one segment of buyers who are still eager to secure their next home — adults with school-aged children.
According to Philadelphia-based predictive analytics firm TKI, homebuyers with school-aged children will account for nearly a fourth of all home sales (22.5 percent) in the nation’s top 364 metropolitan statistical areas (MSAs) over the next 10 months. Families with children over 18 (14.6 percent) and empty nesters (10.8 percent) are also expected to be active while single buyers (9.6 percent) and retirees (7.8 percent) are least likely to make a purchase.
On a regional basis, homebuyers of all segments are poised to have the most luck purchasing a new home in the South and Midwest.
Rome, Ga. led the pack with less than 100,000 residents with TKI predicting homesellers will list 4,323 properties in the northwestern Georgia town by June 2023. Corvallis, Ore. (4,027), Midland, Mich. (3,998), Columbus, Ind. (3,879), Kokomo, Ind. (3,395) rounded out the top five list for the nation’s smallest MSAs, with at least 3,000 listings expected to come to the market.
On the other end of the spectrum, New York City led the pack for the nation’s largest MSAs. Homesellers in the Big Apple are expected to list 280,999 properties, with sellers in Dallas (235,338), Chicago (225,742), Los Angeles (214,522) and Washington D.C. (213,012) also likely to enter the market in droves.
TKI co-founder and CEO Thomas Gamble said his firm’s predictions are based on proprietary artificial intelligence-powered algorithms that “identify patterns and correlations” from more than 300 data sources, which help real estate agents identify areas of opportunity for farming, marketing and other business activities.
“The application of predictive analytics has come a long way and should begin to play an even greater role in the marketing efforts of real estate brokerages and large teams,” Gamble said in a statement. “The cost of targeted marketing continuously increases and much of that effort is wasted reaching those who are not candidates to list their home.”
“Our work helps shrink the target pool and showcases which properties may come on the market and why these address and potential clients should be targeted,” he added.
Gamble said his first-ever quarterly predictive report published in March yielded impressive results, with the firm securing an overall success rate of 8.2 percent. The firm was able to most accurately predict inventory growth in smaller MSAs, such as Jackson, Michigan, where the firm reported a success rate of 17.37 percent.
In a brief phone call with Inman, Gamble said real estate agents often waste precious time and resources on chasing cold leads or losing potential clients with one-size-fits-all lukewarm marketing. Through predictive analytics, he said agents can gain a specific understanding of who’s buying and selling in their market and craft a tactically sharp lead generation funnel that results in sales.
“Let’s be honest, the real estate space for the last two years has been just very crazy, right?” he said. “We hope it doesn’t change dramatically, but it is going to shift a little bit. People are going to have to work a little bit smarter and a little bit harder and that includes using big data to get ahead, right?”
Gamble said the results of those targeted campaigns might take months to see; however, consistent and highly personalized marketing will put agents ahead of people who try to swoop in at the last moment.
“You may not move for eight or 12 months from now, but I’m gonna get you in my pipeline now,” he said. “I’m going to start farming you now as opposed to those folks that are coming in at the last minute.”
“The more educated you are about them, and who they are and how they work and what their interests are, and then who may, in fact, purchase their home,” he added. “Boy, I feel comfortable, right? That going to push me more to list with you.”
Looking forward to the fourth quarter of this year and Q1 2023, Gamble said his team is keeping an eye on mortgage rates, inflation, and how hybrid work trends could impact homesellers’ and homebuyers’ decisions to wait or enter the market.
“We all are just coming out of this last few years and obviously [there] was lots of bad, but some interesting things have happened that probably won’t change. We aren’t going back,” he said. “Now is the time to fill that pipeline because there might be some ups and downs to the economic market. But what you plant today is what you’re going to sow tomorrow.”