Annual report weighs in on several trends that may cause brokers to rethink their marketing plans
RISMEDIA, April 9, 2007-It's hard to go anywhere or do anything without being exposed to marketing and the myriad of methods used to attract consumers.
Yet, despite all this, our desire to be bombarded with marketing and advertising has not increased; quite the contrary-we don't want it. Just think of the "Do Not Call" list and the legislation that has been enacted to reduce spamming. Even our new love for TIVO and DVRs is the result of a strong desire to zap out unwanted commercials.
According to the Swanepoel Trends Report for 2007, the Internet-while it continues to be a great solution-has provided its fair share of complications. For example, type in "Homes for Sale" on Google or Yahoo!, and you will get results numbering in the multiple millions. Yet, according to Realtor.com, there are currently only approximately 3 million properties for sale.
The reason lies in the fact that the real estate industry is still marketing all over the board and really doesn't understand the online marketing channel, says the report's author and trend expert Stefan Swanepoel. In many cases, the industry is complacent in its approach to marketing and the methods it employs; it still holds onto old, "trusted" methods while jumping onto anything new. According to Swanepoel, the industry must solidify its strategies before outsiders and Internet companies dominate the market with solutions that will circumvent the need for consumers to utilize agents to market their properties.
Following in Part I of this special report is a synopsis of key trends affecting today's consumers. To order a copy of the Swanepoel Trends Report, please visit rismedia.com.
The Foreign-Born Opportunity
Recent government studies project that the non-Caucasian U.S. population, which now stands at 33%, will grow to 50% by 2050-half of the entire U.S. population. While minorities and immigrants share many of the same characteristics as other buyers and sellers, they also have characteristics that require special attention if the industry is to effectively include them.
In the years ahead, as the immigrant and minority segments become an increasingly larger part of the real estate market, the industry is going to be forced to make a much larger commitment to diversity, according to the Swanepoel TRENDS Report. Brokers and agents that fail to respond will be turning away a rapidly growing market in which over 50% of the customers want an agent to help them find the right property.
Still, in many places across the country, one is greeted at most Realtor events by a predominantly Caucasian audience. Cultural diversity is a growing phenomena; the successful industry of tomorrow and its professionals will need to adopt different strategies to effectively interact with people of varying ethnic backgrounds and cultures, according to the report.
The residential real estate brokerage industry-along with other industries and professions-is currently dominated by Baby Boomers. As the Boomers make way for Generations X and Y, the world is gradually being forced to deal with the change, and real estate is no exception.
While the exact dates for categorizing each generation are often in debate, there is no doubt about their existence and the fact that each has varying characteristics, attributed to the events that have shaped them.
In fact, change in the real estate industry may actually occur faster because the industry itself is simultaneously being impacted by three additional revolutions: technology and the Internet; democratization of information/MLS; and the involvement of corporate America. The result is an accelerated change in agent makeup and skill level. If Boomers fail to adapt to these changes, Gen Xers and Yers will pass them by much sooner than anticipated.
What's more, the first Echo Boomers (Generation Y) are turning 30 next year, which puts a 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.
Contrary to the older Boomers, most of them have a page on MySpace and have viewed countless video clips on YouTube. They have surfed, watched, recorded, listened and downloaded just about everything available, and are now beginning to affect 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 far 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, says Swanepoel. Their thoughts, desires and perspectives are going to change the way the industry conducts itself-like it or not. To that end, it is quickly becoming necessary for agents to become generational experts in order to effectively serve all their home-buying and -selling customers.
Generational Changes in Home Buyers and Sellers
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. Bearing that in mind, 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.
Understanding customers' needs and wants has always been the industry's prime directive, but in today's marketplace, it definitely has gone one step further. To understand why a customer has those needs and wants makes servicing them much more effective and rewarding. The key to keeping up with this trend is re-engineering one's mindset and adapting to a generationally faceted market through the use of the tools, techniques and strategies geared toward the specific target market, the report says. One size no longer fits all-the market is looking for the re-engineered professional: the generational specialist.
The trend is not just about "specializing" in a generational niche. It relates to everyone in the industry understanding that these generational groups are going to respond, according to who they are.
Responding to these trends will require a certain amount or re-engineering on the part of real estate professionals, especially in light of the increasing role of technology in the industry. New models, new approaches and new methods are all being overlaid on an industry that has a history of rejecting change.
Home buyers and sellers are increasingly becoming a Gen X, foreign-born, online-dominated melting pot. Understanding all these different types of consumers is paramount to the success of all brokers and agents. RE
The 2007 edition of the Swanepoel TRENDS Report was released earlier this year by RealSure and RISMedia. For more information, visit www.retrends.com.