Many professionals in the real estate industry have been in survival mode for the last few years. The challenges in the economy and their effect on the housing industry have caused many to bunker-down and restrict their business planning to the short term. However, with sales increasing and prices beginning to stabilize, we believe a good business practice would be to again concentrate on mid-range and long term plans as we move forward.
To that goal, starting today and for each of the next four days, we will introduce one of the five mid-to-long-term opportunities we believe will be the key areas for business growth over the next few years. We will explain why we choose each segment and also give some suggestions on how to maximize the opportunity it presents.
The five key areas for business growth we will be discussing are:
- The six million 25-34 year-olds still living at home
- The ‘green’ initiative in both new construction and in existing home sales
- The ever increasing Latino population and their belief in homeownership
- The baby boomers rapidly approaching retirement with special housing needs
- The NEW opportunity in short sales (which will be with us for several years)
#1 – The Six Million 25-34 Year-Olds Still Living at Home
There is a tremendous opportunity in this demographic and we believe that this opportunity will make itself available in the near future.
John Burns Consulting, in their newsletter this past December reported that there are nearly six million young adults between the ages of 25-34 living at home with their parents. This number represents almost a 50% increase from the four million living at home in 2003. Also Morgan Stanley, in their June edition of Housing Market Insights , explain that the biggest fall-off in homeownership rates occurs in the age group under 35 years old. This is an anomaly that we believe will correct itself over the next few years.
Why Act Now?
Contrary to some press asserting the opposite, we believe that this segment of the population still has a strong belief in homeownership and are intending to act on their feeling. For example, a recent study by TD Bank reported 84% of today’s younger renting generation-ages 18-34-intend to buy a home. Also Eric S. Belsky, managing director at the Joint Center for Housing Studies of Harvard University two months ago stated:
“Surveys consistently find that the overwhelming majority of young adults plan to own a home in the future.”
Belsky went on to say:
“Many would-be buyers have stayed on the sidelines waiting for the job outlook to improve and house prices to stop falling. But as markets tighten, these fence-sitters may begin to take advantage of today’s lower home prices and unusually low mortgage rates. With rents up, home prices sharply down, and mortgage interest rates at record lows, monthly mortgage costs relative to monthly rents haven’t been this favorable since the early 1970s.”
The 5 Things You Must Do to work this demographic.
- Reach out to this segment in your marketplace by offering free 1st Time Buyer seminars/webinars in which you can explain why now is the time to buy (for help doing this, you can check out a recent webinar we did for buyers)
- Populate your social media with articles and visuals on the subject
- Be able to intelligently discuss renting vs. buying in today’s market
- Be able to easily discuss the non-financial advantages of homeownership
- Be well versed on all mortgage programs aimed at a first time buyer (FHA for example)