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, 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, 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. For more information visit www.realestatetrendsreport.com. |
