RISMEDIA, Feb. 8, 2007-Following the announcement by Ron Peltier during Edina's Annual conference last week, RISMedia spoke to Stefan Swanepoel, author of the new 2007 Swanepoel TRENDS Report, regarding the importance of tapping into the younger market.
While the exact dates for categorizing each generation are often in debate, Swanepoel says there is no debate about their existence and the fact that each has very different characteristics, resulting from the events that shaped them.
According to Swanepoel as the Boomers make way for Generations X and Y, the world is gradually dealing with the change – real estate is no exception. Each new generation reacts and seeks to change what the previous generations have done, leaving their own footprint on society and business. Although there is no agreement on the exact dates, the following is the generally accepted rule of thumb.
G.I. Generation (1901 – 1924)
Silent Generation (1925 – 1945)
Baby Boomers (1946 – 1964)
Gen X or Baby Busters (1965 – 1976)
Gen Y/Millenials/Echo Boomers (1977 – 1994)
The first Echo Boomers (Generation Y) are turning 30 next year, which puts the majority of them in their 20s today. They are a determined, daring and smart group that grew up in a period in which the Internet already existed. As a result, they are very comfortable with every aspect of the medium. They have surfed, watched, recorded, listened and downloaded just about everything they can and are now beginning to effect significant change in the real estate industry.
Even as homeowners Echo Boomers approach matters very differently. They are more likely to buy a home at a younger age than previous generations. They are also not like their Boomer parents that waited for marriage or even a long-term relationship before becoming homeowners. Their thoughts, desires and perspectives are going to change the way the industry conducts itself – like it or not.
The real estate industry is facing a large, escalating change in customer demographics. The Internet is maturing and the door is opening for entry into the industry by newer business models that are heavily focused on fulfilling consumer needs rather than just completing a sales transaction. In 2005, 40% of home buyers were first time buyers and 50% of them were between the ages of 25 and 34 (Gen X and Echo Boomers). Even more telling – 38% of all home buyers in that period were under the age of 35.
According to numerous studies undertaken by NAR and the California Association of Realtors® (CAR), approximately 70% of all home buyers start their search on the Internet. In 2003 the percentage of Internet Buyers and Traditional Buyers was equal. In 2000 Internet buyers represented only 30%.
These new savvy online consumers are looking to the Internet as a tool to fulfill their home buying experience. What they use the Internet for and the extent and quality of service available are starting to shape the real estate process.
"Home buyers and sellers are a generational melting pot and understanding each generation will soon become paramount for all brokers and agents," Swanepoel says. "It is quickly becoming a necessity for agents to become a generational expert in order to effectively serve all their home buying and selling customers."
Learning to work effectively with each different generation is as much about improving one's personal skill set as it is re-engineering the real estate professional. That said, according to Tom Stevens, immediate past president of NAR, the next generation of homeowners is already beginning to exert its influence on the housing market so there is no time to lose.
Between 2001 and 2005, NAR reported that the number of first time home buyers under the age of 25 increased from 11% to14%. When you increase that age to 35 the percentage jumps to 64%. Add to that the fact that the median age of buyers who used the Internet to search for homes in 2005 was 38 and the picture becomes very clear. In 2005, 40% were Generation X and 39% were Echo Boomers … that's eight out of every 10 new homebuyers.
Gen X and the Echo Boomers represent the push for newer approaches and processes that are integrated into the "technology" platforms they are not only familiar with but the very ones they helped develop. Companies like Edina and others that are re-engineering their businesses to understand, market to and focus on this growing younger market are smart and wise.
For the others, don't wait too long or you may find your business eclipsed as fast as new concepts like MySpace, YouTube and Facebook became mainstream. If you are looking for more information on how to restructure your company, look no further than the 159-page Swanepoel TRENDS Report. This methodical Report covers change like no other Report and provides countless suggestions, strategies and tactics. The Report was researched by best-selling author Stefan Swanepoel and published annually by RIS Media and RealSure Publishing.
Copies are available at www.RealEstateTrendsReport.com.