Advances in technology are changing the way traditional industries market to—and interact with—customers. Taxis are being replaced by Uber and Lyft. The medical industry is starting to embrace telemedicine. Car dealerships are being challenged by CarMax. And similar innovations are disrupting the real estate market. Real estate agents are facing fierce competition from for-sale-by-owner (FSBO) listings, as well as larger companies offering no-hassle/no-barter options for both purchasing and buying property. Car dealerships survived. The medical industry is still thriving. Will real estate agents become relics of the industry… or is it (yawn) business as usual? One thing’s for sure… those Realtors with smart branding and marketing plans should easily survive the storm.
The Changing Real Estate Customer
The education of today’s real estate buyer and seller is the single largest factor affecting real estate transactions. To revisit our automobile example… Prior to the internet, the only way to obtain information about a car was to either look at the Blue Book or visit several dealers in your local area. Automobile dealers had a monopoly on access to the information and used this to their advantage when closing the deal.
Well… except for that one customer who is prepared and knows to reject the TruCoat!
The real estate market is undergoing a similar transformation. Before Zillow, Redfin and Realtor.com, real estate agents enjoyed the upper hand in real estate transactions. Only they had immediate access to data concerning recent sales, crime rates or school performance. But those days are fading. Much of the relevant market information is available online… And there are a growing number of individuals who question whether they need a real estate agent at all, trying FSBO before even considering a traditional listing. Not too surprisingly, younger Millennials tend to use real estate agents at the highest rate (92%)—most likely because they are first-time home buyers. (See below.)
The 2019 National Association of Realtors Report
Let’s look at some current real estate trends based upon the 2019 National Association of Realtors Report:
- Younger Millennials (1990-99) make up 11% of home purchases
- Older Millennials (1980-89) make up 26% of home purchases
- Gen X (1965-79) make up 24% of home purchases
- Younger Boomers (1955-64) make up 18% of home purchases
- Older Boomers (1946-54) make up 14% of home purchases
- Silent Generation (1925-45) make up 7% of home purchases
Other Real Estate Market Factors
Let’s face it, most Baby Boomers have lived in their home for decades and have no intention of moving. This is nothing new. Home ownership in America was based upon the practice of having several generations of family members under one roof. The practical effect that this had on the real estate agents was powerful. Because, if you, as a real estate agent, engaged with a young boomer in the 1970s, you probably wouldn’t see them again in your working lifetime. It was hit and run. You did a good job, but that was really your one shot. But, the housing bubble changed this dynamic for the generations following Baby Boomers. People are buying houses, flipping them, upgrading and downgrading at increasing rates.
At 11 %, Millennials are now a larger home buyers group than the Silent Generation (7%) and the overall largest generation of buyers.
One in four Younger Boomer and Silent Gen buyers are single females.
Older Millennials are most likely to have children under the age of 18 in the home (69%).
Gen Xers are now most likely to buy a multi-generational home at 16%.
Younger Millennials purchase homes through agents, with the highest share of any generation, at 92%.
The Changing Market Demographics
Most Baby Boomers are not going sell or buy real estate using an online service. But there are a lot of them, and the stats show that some may be looking to downsize. Boomers are passing the baton to their Gen X offspring (who are quite often looking up upgrade their houses, along with Older Millennials.) But, one advantage of working with Baby Boomer customers is they have a larger network of individuals with whom they have a close relationship. Do an outstanding job for a Boomer, and you might be working with their Gen X and Millennial offspring. But these two groups are more willing to take an online interactive approach. Therefore every real estate agent or company must be able to combine a touch of yesteryear with the technology of today.
Real Estate Smart Branding
But let’s be honest. If, as a real estate agent, all you’re going to do by way of comps is conduct an online search and compare average square foot prices in a desired location… you really have to ask: Are you providing any added value? The question is not whether people need an agent… Rather it’s what value will a real estate agent bring to a customer? Remember, most people can “internet” anything these days. And once someone has gone through the selling process once or twice, they may question whether they can DIY successfully.
Therefore, real estate agents may have to up their game to make sure potential clients are aware of what else they can bring to the table. Smart branding in this competitive market is knowing about the hidden gems, neighborhood gossip, housing history, new developments and recent public policies such as whether Airbnb will be allowed to operate in an area.
Real Estate Smart Branding Is Creating Experiences
Buying and selling real estate is usually one of the biggest transactions people will make in their lifetime.
So, you’ve done your homework and are the most knowledgeable real estate agent in the Triangle area…
You are able to provide your customers with details about a property that the current reigning champ on Jeopardy would not know…
You know the memories associated with a property, the history. Maybe someone had their first child there. The previous owner was a prolific gardener who planted purple lilies. The couple next door are famous writers. And a Carolina Hurricanes player owns the penthouse property….
To put icing on the cake, you may consider whether you are creating an “Instagramable” moment at the closing.
Let’s face it, most real estate agents are still referred by past clients much the way a good book gets passed around. Creating an experience is something that technology and artificial intelligence simply can’t provide. And one thing is certain: Creating a home buying experience goes far beyond merely circulating electronic files through DocuSign… And it feels good, too!
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