Change is one of a few rock-solid constants. We can trust it implicitly,
especially when it comes to our favorite subject: us! People experience dramatic
change during the course of their lives, both internally and externally. We grow
and mature, and often, we move.
Moving means the purchase and sale of real estate – an activity that consumes
the professional lives of an unprecedented 2.4 million licensed real estate
agents in 2006. According to the
Swanepoel TRENDS Report
2006/7, authored by trends expert Stefan Swanepoel, generational differences,
massive immigration and major population shifts are all healthy contributors to
the “chameleon” consumer – an emerging American identity that defies simple
stereotypes by wearing multiple buying hats.
Generations and their key differences have become more clearly defined over the
past few decades. Each successive generation provides distinct niche market
opportunities fro progressive-minded agents. As the real estate market cools,
agents are going to be faced with increasing competition. The prospect of
quickly and accurately defining and meeting the consumer’s needs, wants, and
desires will prove to be a daunting task. Nevertheless, it will remain the key
to maintaining or enhancing market share. A thorough understanding of the
different generations comprising future homeowners and buyers is going to become
vital knowledge in our evolving market.
As a generational demographic, the chameleon consumer right now is the Baby
Boomer. According to the
Swanepoel TRENDS Report
2006/7, Boomers are on the move in a big way. In terms of a major move, it’s
clear that the South and West have recently enjoyed the highest net plus
migration numbers (more move in that move out). Population shifts have
classically impacted the pricing of real estate, and as Boomers approach
retirement and begin to seek warmer climes for a second career or the golden
years, the geographic relocation of millions of potential second home consumers
could redefine urban epicenters all across the U.S.
Remember that although they may lack the technological savvy of their younger
counterparts, Baby Boomers are also empowered by a wealth of online information
at their fingertips, and subsequently they are approaching the home buying
process in new and innovative ways.
Another intriguing population segment that requires attention is the Young,
Single and College-Educated (YSCE) group, currently ages 25-39. They are much
more mobile, as opposed to their Baby Boom parents, since they generally benefit
from a wider range of job opportunities. As a result, they are not only more
willing to move, but are eager to do so in order to meet their economic or
lifestyle goals. This generation exhibits a trait common to Generation X:
distance and the location of existing family members play a much smaller role in
their moving considerations. They are more likely to move farther away from
“home” than any other group.
In addition to population migration, our nation is currently experiencing the
most significant increase in immigrant arrival in the last century. The
likelihood of the chameleon consumer being foreign-born or part of a minority
group is growing like wildfire. According to the
Swanepoel TRENDS Report,
over one million new immigrants entered the U.S. last year – the most
significant increase in arrivals since the beginning of the 20th century. As
these immigrants and their children work, save, and study to achieve the
American dream, so follows the landscape of the real estate industry.
The U.S. Department of Housing and Urban Development (HUD) released data from
the Census Bureau showing that minority homeownership hit an all-time high
during the first quarter of 2005, including a new quarterly record for Hispanic
homeownership. Forty-one million Hispanics currently live in the U.S., and a
recent study estimates that the Hispanic community will account for 31% of the
nation’s housing growth between 2000 and 2010, making it the fastest growing
minority group; increasing at four times the rate of the rest of the population.
The report also shows that 84% of Hispanic renters strongly desire to buy a
home, and 55% plan on buying in the next five years. Needless to say, the impact
of the Hispanic market will be nothing short of a dramatic.
Add to these numbers the estimated 10 million foreign born set to reach their
peak home-buying years in the next decade, and the potential for homeownership
competition is going to skyrocket – even by today’s standards.
According to Swanepoel, “Real estate professionals need to focus on how best to
serve these groups, while opening up a greater market opportunity for
individuals from those groups to become successful as real estate brokers and
agents. It will take not only education, but a concerted effort by the
industry’s national leadership to promote the progress required to overcome
these challenges.”
It would be fair to state that the average agent is not ready to effectively
serve this expanding market segment. Never before have real estate agents been
required to serve such a diverse population. Yet understanding and serving
different generational, foreign-born and minority groups more effectively will
become crucial to the future success of real estate brokers and agents.
SOURCE:
Rismedia.com