With 2015 here, it’s the perfect time to take a look at some of the top buyer trends on the rise — those that we think are sure to play a big role in agent success in the coming year.
We’ve polled industry insiders along with some of our top-producing customers to learn what’s on their mind as we launch into 2015. The agents we spoke with are focused on three top buyer trends in the new year: millennials, international buyers and mobile-first clients.
1. Millennial buyers are driving the market.
The millennials are an even larger cohort than their parents — the baby boomers. Born between 1981 and 2000, this group is made up of approximately 90 million people and encompasses nearly 40 percent of the real estate market. 2015 may be the year millennials become a major force in the market, according to Realtor.com’s chief economist, Jonathan Smoke. Savvy real estate agents are already positioning themselves for success with these new buyers, as their sheer numbers will drive activity in the housing market for decades.
According to the Urban Land Institute, a number of cities have already seen increased economic activity in the real estate sector led by this generation, particularly Austin, Seattle, Portland and Minneapolis/St. Paul. But these aren’t your typical buyers. The millennials aren’t forming new households, and they’re not buying as many homes as their parents’ generation was at the same age.
Outcast by high unemployment, student loan debt and tight credit, millennials have a different outlook on home ownership and long-term investment than previous generations, according to the National Association of Realtors. Even so, the Joint Center for Housing Studies of Harvard University found that “the number of households in the 30s should increase by 2.7 million over the coming decade, which should boost the demand for new housing.”
“With mounting school loan debt for millennial buyers, it will take them a bit to ramp up and enter the real estate market,” says Meredith Peterson, a Bay Area native and a Realtor with Pacific Union. “To get them into the market quicker, we need to see the banks making adjustments to their guidelines to allow for smaller down payments and higher back-end ratios.”
Besides their geographical and home buying preferences, millennials have different expectations than their predecessors when it comes to communication and decision-making. This next generation values transparency, on-demand information and service, and a collaborative process.
Millennials, for example, switch their attention between media platforms like laptops, smartphones, tablets and television 27 times per hour on average. Agents who bolster their technology and communication plan to include text messaging, mobile-friendly home searches and collaborative tools will appeal to millennials, making their search experience easier and more tailored to their specific wants and needs.
2. More international buyers are coming to the market looking for urban properties.
According to the 2014 Profile of International Home Buying Activity, more and more buyers are coming from outside the United States. Favorable exchange rates, affordable home prices and rising affluence abroad continue to drive international buyers to the U.S. to purchase properties and make investments. In fact, foreign buyers accounted for $92.2 billion in real estate sales in the twelve months ending March 2014. Canada, China, Mexico, India and the U.K. accounted for more than 54 percent of foreign sales.
Catering to international buyers, however, is a stilla rather niche market; just 28 percent of Realtors reported having international clients. What’s more, only 4 percent of Realtors report having more than 10 international clients in a given year — meaning a relatively few agents handle the majority of the transactions.
These international buyers also favor urban locations that offer low-maintenance condominiums, green living, luxurious appointments and easy access to lifestyle amenities like work, school and shopping. They tend to be in the luxury class, with a mean purchase price of $396,000 compared with $247,000 paid by domestic buyers.
“We’re seeing that international buyers prefer the urban areas like San Francisco or Los Angeles; suburban areas are not their preferred choice,” says Rama Mehrea, an East Bay real estate specialist ranked among the top 1 percent of Keller Williams Realty agents internationally. “A lot of international buyers also look for income-producing properties, which make great long-term investments.”
As international buyers continue to make a mark in our real estate market, how are you marketing to and capturing these buyers in 2015? Does your website offer the lifestyle search capabilities that are needed to help international buyers understand the locale of the property they’re interested in? Can your website easily be translated into another language? Are you prepared to facilitate a transaction online with platforms like DocuSign? These are just a few of the considerations to think about when marketing an international audience.
3. Mobile-first buyers are on the rise.
It’s hard to overstate the impact that smartphones are having on buyer behavior; mobile devices play a key factor in Internet real estate searches today. According to a joint study by Google and the National Association of Realtors, 89 percent of new home shoppers use a mobile search engine at the onset and throughout their research. What’s more, nearly half of homebuyers use their mobile devices to get directions to the home they want to look at, and 45 percent use their mobile devices to request more information about a property they’re interested in.
“A mobile-first approach means so much more than just publishing a mobile-friendly version of your website,” says Tom Flanagan, vice president of technology at Alain Pinel Realtors. “Savvy buyers are seeking a mobile experience that provides real-time location-based data, has the ability to facilitate the entire transaction and, of course, is easy to use.”
If you’re not serving the mobile-first buyer with mobile friendly platforms that offer the robust search capabilities they expect in today’s market, you’re missing out on filling your sales funnel with active buyers.
“The use of mobile devices is creating a faster real estate market and, at the same time, making home searching easier and more enjoyable for my clients,” says Paul “PK” Geislinger, a broker. “Most ‘home elimination’ is immediately done from their smart device. My clients make in-person visits to the homes they buy.”
Take some time to evaluate your technologies in the New Year. Can buyers communicate with you via live chat or text message? Can you scan and send documents to facilitate their purchase via email? Does your website offer a robust search platform that is easy to use on the computer, phone and tablet? These are just a few areas that you may want to consider improving in the coming year.