By Margo McKay-Broughton
In the nearly 30 years I’ve been in real estate, I’ve seen the highest highs and lowest lows in the market and everything between. Yet like many who believe homeownership can provide a better life for individuals and families and build stronger communities, I continue to find opportunities in transitioning markets to meet the needs of buyers and sellers and serve my clients.
If you prefer to focus on the opportunities for business growth in an always-changing real estate market rather than bemoan the fact that the practice of real estate is just not like it used to be, keep reading.
Many Choices in Inventory: The National Association of Realtors reported a total housing inventory of 2.4 million homes available for sale at the end of March. A five- to six-month supply indicates a healthy market, according to market intelligence firm Hanley Wood. In 98 of the largest cities in the U.S. it is now cheaper to buy a home than rent one, according to a recent Trulia report. Buying has begun to pick up, with April sales of existing homes increasing by 3.4% over April 2011. Adding to housing choices, the U.S. Census Bureau and the Department of Housing and Urban Development on May 16th announced that privately owned housing starts in April 2012 were 29.9% above the April 2011 level. Online marketplaces that feature existing homes and new construction with the ability to submit and negotiate offers have made it easier for real estate professionals to help their clients find and purchase their next home.
Large Millennial Population: Statistics show that the 79 million Gen Y or “Millennials” (between the ages of 16-34) now outnumber the 76 million Baby Boomers (between the ages of 48-68). With the Millennial population trending upward toward peak household development and spending years and exceeding their parents in spending power, they are an important demographic to target for home purchases. New research from the Boston Consulting Group indicates that within the Millennial population, “about 50% defy the stereotypes most marketers live by.”
Generally described in the media as “sheltered, civic-minded, team-oriented, less consumptive and socially conscious,” there are subgroups within this demographic that savvy real estate professionals should target. You’ll need to reach out to them electronically, as this generation is “impatient and values a fast experience over a lengthy customer service endeavor—born as technology multi-taskers, wired to be constantly in a hurry.” Use online real estate markets and electronic communications to reach this market—and be ready—they are likely to contact you first if you are appropriately positioned with an electronic market presence and provide them a “fast experience” through the advantages of online offer negotiations.
Retirees Making Housing Changes: As the 76 million Baby Boomers progressively approach retirement, new lifestyle and housing arrangements are being embraced. CBS recently reported on the trend of modern day “Golden Girls,” whose decision to house-share mimics the TV show from the late 80s. They are part of a growing trend choosing to live together for economic and social reasons. CBS cites a 15% increase in the number of single women over 45 living with non-relatives. Retirees often find their housing needs have changed and they want an alternative—maybe they no longer need as large a home, prefer a one-story residence, or are eager to give up a large yard and swimming pool for a home that is easier and less costly to maintain.
Nearly 6,000 Americans are turning 65 every day and Baby Boomers will soon increase that number to 9,000 a day as they age. Don’t be surprised if you find retiree homebuyers are just as comfortable with online property searches and e-commerce as the Millennials. A strong indicator of the comfort level of people age 55 and older have with e-commerce is evident in a recent American Bankers Association study. For the first time, older Americans indicated a preference to do their banking online–57% of bank customers age 55 and older choose to bank online, up 20% over the prior year. A marketing plan that includes the growing population of retirees may increase your home sales, particularly if you market your services online.
Cash Buyers and Investors Continue Robust Purchasing: In a CNN Money segment, major kudos were given to cash buyers and investors for the modest housing recovery that is underway. Included in their analysis was information from Capital Economics reporting that almost all of April’s $4.62 million home sales were driven by cash buyers and investors looking to turn properties into rentals. There are several business opportunities with these buyers. You can assist them in finding investment properties and with services they often need such as rental market analysis, screening of tenant applications, rent collection, and management of tenant-related issues and repair and emergency services.
When Oliver Wendell Holmes made the statement, “We are all faced in life with a series of great opportunities, brilliantly disguised as impossible situations” he likely had no idea his thoughtful comment would be so apropos to today’s housing market. There are huge opportunities in real estate for brokers and agents actively seeking to serve specific segments of the market with real-time communication and service.
Margo McKay-Broughton is vice president of program development and broker training for First Preston HT and is a licensed real estate agent in Texas.
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