Modelry - A Random Walk through Internet Real Estate: 4 Shocking Graphs and 8 Steps to Revising Your Real Estate Marketing Strategy

4 Shocking Graphs and 8 Steps to Revising Your Real Estate Marketing Strategy

8 Key Consumer Changes 4 Shocking Graphs and 8 Steps to Revising Your Real Estate Marketing Strategy

The real estate market is FINALLY improving and it is time to drastically change your real estate marketing strategy. We conducted a survey of 400 consumers who purchased or sold a home in 2004 AND in 2012.  Here are three major trends we uncovered and 8 key strategies to improve your real estate marketing & technologies to take advantage of these changes in the market place:

  • US real estate market went through an unprecedented downturn from 2008-2012, but technology adoption key growing 
  • The Internet and mobile technology adoption continue to accelerate and this is changing how consumers buy and sell real estate
  • The US population is aging.  24% of the US population will be retiring in 20 years. Family formation drives home purchase and fertility rates are declining. One segment of the US population is growing faster than others and that is the Hispanic population.

I am hosting a webinar on on Wednesday April 17th at 1pm EST and 10am PST to go through the results of our study and talk through 8 key changes in your real estate marketing strategy.   Click here to register for the webinar

I know you hear this every other day, but below are four charts that should convince that the real estate market is changing and the way you market to and manage your real estate prospects needs to change as well.  No – I am not talking about social media or mobile marketing, but those are part of the broader challenge. There is a fundamental sea change occurring in how consumers approach real estate, how they research real estate, and how they select a real estate agent.

The Real Estate Roller Coaster

If you don’t have whiplash by now, I applaud you.  We have covered the real estate roller coaster before.  We have gone from real estate euphoria to real estate death spiral and now back to real estate euphoria in 2013.  (Of course, ActiveRain was the first to call a recovery in the real estate market in 2012 and this year, ActiveRain predicted the spike in the real estate market that we are currently experiencing.  More data and insight on the restate recovery on Real Estate is Back on RealEstate.com)

The S&P Case-Shiller Home Price Index shows the major retraction in the market.  A deathly retraction of the market.  You can see that the real estate market dropped like a rock from 2008-2011.  We in the real estate industry thought that the world stopped.  But it didn’t.

Case-Shiller Index 2000-2013

Technology Continues On

Due to the challenges in the real estate market and the banking industry, real estate sales ground to a halt.  The builders stopped.  The real estate agents and real estate brokers battened down the hatches and prepared for a protracted downturn in the market.  Banks stopped lending.  We all felt it.

Technology and changes in consumer media have plowed forward.  Nothing stays the same, even if the real estate industry has suffered challenges.

Three companies continued charging forward as if times could not be better: Google, Apple and Facebook.  Google continued its domination of the overall Internet which it started in 1998.  Apple reinvented the phone with the first true smartphone, the iPhone released in 2007.  FaceBook started a new social media revolution in a college dorm room in 2007.  Coincidence? 

The results have been remarkable.  Now 78% of US  consumers are online with the over 55 population finally catching up with younger populations. 93% of Americans have a mobile phone, 56% of US consumers are surfing the Internet via mobile device and nearly a quarter of consumers are using an iPad or tablet.  Only using a desktop computer to access the Internet is unfathomable to anyone under the age of 30.  Facebook now controls 28% spent on the mobile Internet.

So the question is how has this affected consumers looking for information on real estate on the Internet?  

US Internet and Mobile Phone Usage 2000-2011

The Face of America Is Changing Too

America has kept on changing and evolving as well.  For anyone paying attention to the 2010 US Census or the current US financial challenges, the US population is getting older and we are living longer.  The Baby Boomers are retiring at an astonishing rate.  According to the Pew Research Center, 10,000 Baby Boomers are retiring a day for the next 19 years.  Up to 24% of the US population will be entering retirement over the next 20 years.  The retirement of Baby Boomers will dramatically chang the face of US real estate and the US economy.

Baby Boomers Retiring

From NPR

Simultaneously, the rate of new family formation is declining.  Home purchases are driven by family changes – people getting married and babies being born.  Fertility rates have dropped due to the Great Recession, starting in 2008.  Historically we have seen people have fewer children when there are financial troubles like a recession or depression.  The decline in new family formation can be seen across all ethnicities & races in the US. You can see from the chart below, the rate of new family formation among Hispanic families is significantly higher than all other ethnicities.  Correspondingly NAHREP is predicting that Hispanic home buyers will account for 50% of new home purchases by 2020.  The Hispanic population is going to be a MAJOR driver of the real estate industry 7 years from now.

Fertility Rate By Race

So let me summarize the big changes happening:

  • US real estate market went through an unprecedented downturn from 2008-2012
  • The Internet and mobile technology continue to accelerate
  • The US population is aging with only one segment growing, which is the Hispanic population

Have you changed your real estate marketing strategy to account for these changes?

We conducted a phone based consumer survey in 2004 and then recently repeated in 2012 asking consumers who have had purchased or sold a home in the past 12 months.  We asked them when they started thinking about buying or selling and why.  What sources did they use for research?  How did they select a real estate agent?

I am speaking on Wednesday April 17th at 1pm EST and 10am PST talking about the results of our survey and 8 key changes that you need to make to your real estate marketing strategy.  

REGISTER FOR MY WEBINAR HERE.

I will post the 8 tips and presentation here on April 18th so that you can download them and share them with you friends.

Check it out.  I look forward to seeing you on April 17th.

Nikesh Parekh

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Comment balloon 32 commentsNikesh Parekh • April 07 2013 06:41AM

Comments

And the American fertility rate cannot sustain our culture.  I wonder if anyone is planning on that?  So, right now we are between panic and hope?  To me, the panic brings the most hope as that is where my changes were made.  And I'm still in business!

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 4 years ago

Hi Jay, That is a very astute comment.  The replacement rate is 2.2 meaning that every family must have 2.2 children on average to keep the population flat (two kids to replace the parents and the 0.2 kids to replace untimely deaths of children before they reach adulthood).

SO, if you play out the demographic trends of the US population for the 20 years, you will see that 24% of the US population is retiring and living longer AND, America is not producing enough children or young people who will be able to support our aging population.  

Changes & challenges!  I can't think of time when we did not have both.

Posted by Nikesh Parekh, Technology Entrepreneur, Executive, & Investor (Trulia) over 4 years ago

And we (I should say "they") have set those kids up with crushing debt that will never be paid.  Do you think I will get back what I have put in?  Thinking now...

 

Still thinking.

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 4 years ago

I think that is the wrong question.  I think the question is whether Social Security & Medicare alone will be able to support you and/or the majoirty of Americans.  Without a doubt, I can say no.  The costs of health care alone are growing too quickly.  Combine that with the increasing life expectancy of Americans and you have a real financial pickle.

Whoever thought demographics would be so important? ;)

In order to solve this pickle, we need more young people and more young workers paying taxes and paying Social Security.  Yes, we need entitlement reform to control costs on the back-end, but we also need more revenue on the front end.  Either we will end up with less people paying more or we need to figure out how to get more people paying a lilttle bit more.

Posted by Nikesh Parekh, Technology Entrepreneur, Executive, & Investor (Trulia) over 4 years ago

Yes, to all of that, my friend.  What we need are leaders with the cajones to eliminate such radical spending.

Taxes don't grow a society.

You might like my free enterprise quote today!

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 4 years ago

This is brilliant. When we think about how we do business, we should also think about what the adoption of technology in the age of expensive oil and a graying population is going to do to regional and local economies and housing demands.

Posted by Brad MacKenzie, Turning Houses into Homes on the South Shore (Brad MacKenzie) over 4 years ago

A natural move for me to account for all  the business to come from the Hispanic Market. . 

Based on my personal information and beliefs, as a native Hispanic that prefers communication in English. .  I also recognize that others prefer communication in their native languages. 

 

and as you know. .  communication is key in any business. 

 

As I learned in our  ActiveRain community, it does not sit well for some agents seeing Spanish posts

see my problems here. .. sorry for the link . .but this is important

 

It is as shocking as these charts

 

In my opinion and to be helpful to others. 

, the future of doing business with Hispanics is that you DO NOT  have to speak SPANISH. .

It is as simple as being helpful and respectful of their needs. ..

Just like any other business transaction

I do that myself all the time. .Spanish or English. .

I rate any services based on quality not just because they speak another language. . 

A language I know. .

 

I don't expect to EARN Hispanic business just because I speak their language.. no one should. .

I intend to do that with compassionate service, understanding of their needs and with the utmost respect

Anyone should and can do that. .

Hispanics are here to stay. . whether some people like it or not. . .

I know they will be the movers and shakers of our economy . .

 as such

You may benefit by putting attention to this. .

As the chart says. .

"Hispanic home buyers will account for 50% of new home purchases by 2020"

Posted by Fernando Herboso - Broker for Maxus Realty Group, 301-246-0001 Serving Maryland, DC and Northern VA (Maxus Realty Group - Broker 301-246-0001) over 4 years ago

I guess it's a good thing I loaded the mobile conversion plugin on my WP site with those stats.

Posted by Liz and Bill Spear, RE/MAX Elite Warren County OH (Cincinnati/Dayton) (RE/MAX Elite 513.520.5305 www.LizTour.com) over 4 years ago

Hi Fernando, Thanks for your comment and highlighting a key issue that exists in ALL of real estate.  

I was just at a Real Estate CEO summit in New York City.  The CEO's of Century 21 and Better Homes & Gardens called out a VERY insightful point that the current real estate industry DOES NOT actually represent the changing demographics of America.  The leadership of the real estate industry is not representative of the real estate industry either.

At the most senior levels of the real estate industry (franchise and large multi-state brokerage CEO's) recognize that the Hispanic and Asian markets are critical to long-term success.  Additionally, attracting younger people into real estate as a career is critical.

At a leadership level, there are actually very few women at the C-level in real estate.

Keep fighting the good fight, especially when it comes to the importance of diversity in real estate.

You will be laughing all the way to the bank in a few years time - I am sure.

Posted by Nikesh Parekh, Technology Entrepreneur, Executive, & Investor (Trulia) over 4 years ago

Hi Nikesh - That's certainly a lot to think about - I'm looking forward to the webinar.

Posted by Dick Greenberg, Northern Colorado Residential Real Estate (New Paradigm Partners LLC) over 4 years ago

Great charts Niki. Looking forward to the webinar next week.

Posted by Connie Harvey, Realtor - Nashville TN Real Estate (Pilkerton Realtors) over 4 years ago

Wow, this post was an eye opener for me.  It's not that we don't know most of the points that you bring up - that the older population is growing faster that the youth and that the fastest growing segment are hipanics and that the birth rate and number of traditional families is declining, but I never thought of all of this in terms of how to direct my marketing for the long term.

Looking forward to the webinar.

Posted by Lora "Leah" Stern 914-772-4528, Real Estate Salesperson (Coldwell Banker, 170 N Main Street, New City NY 10956) over 4 years ago

Thanks Leah and Connie!

Posted by Nikesh Parekh, Technology Entrepreneur, Executive, & Investor (Trulia) over 4 years ago

With all the boomers, keep the reverse mortgage purchase loan in your tool box!

Posted by Maggie O'Connell, Reverse Mortgage Purchase Specialist over 4 years ago

Good idea Maggie!  Especially at today's interest rates.

Posted by Nikesh Parekh, Technology Entrepreneur, Executive, & Investor (Trulia) over 4 years ago

Great charts and even better information, Nikesh!  Thanks!

Posted by Dagny Eason, Fairfield County CT, CDPE Homes For Sale and Condo (Dagny's Real Estate) over 4 years ago

Wow, Nikesh, who knew when we started in real estate 22 years ago that we would be worrying about fertility rates at some point. Makes sense that it will drive the market (or not) in the future.

Posted by Toni Weidman, 26 Years Selling Homes in New Port Richey, FL (Sailwinds Realty) over 4 years ago

Interesting illustrations and comments, however, using the term entitlements with Medicare and Social Security benefits and integrating them with other social justice entitlements is irresponsible.

Americans have a right to those benefits of Social Security and Medicare because they paid into them. If the federal government managed this program effectively and prudently, these challenges, Social Security and Medicare, wouldn't be a challenge, don't you agree?

Other entitlements that amount to hundreds of billions of dollars annually that are received by millions of illegal immigrants and others are gifts from our politicians funded by American taxpayers. 

If discussing challenges and solutions, let's define some terms or words that are used in our discussion, please and not generalize the challenge. 

Posted by Kimo Jarrett, Pro Lifestyle Solutions (WikiWiki Realty) over 4 years ago

Good Stuff! Craft your Marketing accordingly!

Posted by Ben Yost - 303-587-4297, FHA, VA, Conventional - Mortgage Loans in De (First Time Home Buyer, Mortgage Rates, Pre-Approval) over 4 years ago

Great charts and analysis and a most scary time in our country.

Posted by Mickey Hayward, Farms - Land - Homes - Commercial Real Estate (Hayward Realty (in Virginia), Sunset Properties (Maryland & Delaware) - Farms, Land, Homes, Commercial Real Estate) over 4 years ago
Thanks for the info. Will sign up for the webinar.
Posted by Mahesh Mike Patel, Call Me And Consider It Done! (First Team Real Estate) over 4 years ago

possibly good information for the average Realtor but the consumer does not care

Posted by Ron Aguilar, Mortgage & Real Estate Advisor since 1995 (Continental Mortgage) over 4 years ago

Love those graphs - especially the fertility rates.

On the "Home Price Index"  I'm just barely past hope!

Posted by John Dotson, The experience to get you to the other side! (Preferred Properties of Highlands, Inc. - Highlands, NC) over 4 years ago

Great graphs and backgroud inf Nikki.  Looking forward to the webinar.  Hope it is recorded as well.

Posted by Bob Miller, The Ocala Dream Team (Keller Williams Cornerstone Realty) over 4 years ago

Hi Kimo, The point of my blog was not to discuss Social Security or Medicare, but to talk about how demographics affect the real estate market.  That being said, I am happy to discuss Social Security or Medicare at any time.

Everyone else, thanks for the feedback.

Posted by Nikesh Parekh, Technology Entrepreneur, Executive, & Investor (Trulia) over 4 years ago

Why would someone think that a comment about social security is appropriate here? They must have ADHD & can't read your post.  See you there!

Posted by Lyn Sims, Schaumburg IL Area Real Estate (RE/MAX Suburban) over 4 years ago

UGH! I have an appointment at that time. I hope you'll make it available at AR University!

Posted by Thom Abbott, Midtown Atlanta GA Condos For Sale (MyMidtownMojo.com |770.713.1505 | Intown Atlanta GA Condo Living) over 4 years ago

working on rewamping everything .. .the real idea is to always change and prepare for what is ahead .... 

Posted by Lehel Szucs, REALTOR of choice (All Seasons Real Estate, Inc.) over 4 years ago

I am always fascinated by research that depicts trends and forecasts market futures. I am re-blogging this data, even though it is largely geared to Realtors.  Thanks!  Joy

Posted by Joy Carter & Jeff Booker Brother and Sister Team, Trust Your Family's Move To Our Expertise! (Keller Williams Parkland/Coral Springs Realty-GreatFloridaHomes Team) over 4 years ago

This is a great article with usefull information. Thanks.

Posted by Morten Pedersen over 4 years ago

I like the way that you've presented this information.  One aspect that would be hard to graph is the comparison of where "you" stand in comparison to your competition.  Not that other's shortcoming should be the source of your own success but there is a real difference in the relative strengths of companies local to each other as opposed to the "aboslute" data you presented.

Posted by Mark Delgado, Benicia and Vallejo, Property Management, rental h (houses for rent, Solano County & Glen Cove) over 4 years ago

There's something poetic about the notion that we are currently between Panic and Euphoria. Thanks for the great charts - they really illustrate the grand changes we've gone through.

Posted by Mortgage Capital Associates (Mortgage Capital Associates) over 4 years ago

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