When it comes to marketing a product or service, the first question a good ad agency will ask is, “who is the target market”? Without knowing who is going to buy the product or utilize the service, marketing campaigns can be expensive and ineffective. A good campaign starts with a solid understanding of the customer. With targeted demographic data, campaigns can be created that meet the customer at the point of need. Knowing when, where and how they like to be contacted, an effective message can be delivered to a lead with a greater chance of creating a sale.
In real estate, this principle remains the same. When selling your home, it is important to have a clear understanding of the buyer, who will ultimately purchase your property. The more you know about the demographics of the person who would want to purchase your home, the better you and your Realtor® can prepare marketing strategies to attract the right buyer. Age, income and lifestyle information will build a picture of the most probable person who would purchase your home.
The Generational Buyers
The National Association of Realtors® released the “Home Buyer & Seller Generational Trends” report in March of 2014. This report covers the generational traits of Gen Y, Gen X, Baby Boomers and Silent Generation. Each generation has specific ways they like to communicate and search for properties and real estate agents. They also have different home purchasing motivations and financial capabilities.
Generation Y, or Gen Y, is a unique set of young people who have never known life without computers or cell phones. Born between 1980 and 1995, they are highly computer savvy. You are more likely to get an instant response from a text message, than from a phone call. They are the largest share of home buyers, with 76% being first time buyers, and the smallest share of home sellers. The Gen Y home buyer starts their property search online, with half of them using a mobile device as part of the search. This demographic is young and ambitious, but early in their careers, so a whopping 97% will finance their first home.
Generation X are the highest income earners and largest share of married couples. Born between 1965 and 1979, Gen X are concerned about neighborhoods, schools for their kids and job-related location of their home. Generation X is also tech savvy, and were the early adopters of computers and high tech gadgets. But, they also remember life without computers (remember the typewriter?) and telephones that were plugged into walls, which would only go as far as the cord would reach. Like Gen Y, Gen X will utilize a computer and mobile device at the beginning of their home search, and plan to live in their new home for 15 years.
Born between 1946 and 1964, Baby Boomers were the product of the post-war, global powerhouse expansion of the United States. In this group we see less online interaction. Although they are capable of using computers and mobile devices, they will sometimes prefer more traditional forms of communication.
The Boomers are where we see more multi-generational home purchases, where a child has moved back in, or they are taking care of an elderly parent. Twenty six percent of this group owns more than one home including investment properties and vacation homes.
The Silent Generation
The group who lived through the great depression and fought in World War II, the Silent Generation, is typically downsizing, moving closer to family and friends and focusing on retirement. This is the smallest group of home buyers at 9%, and the most likely to be a repeat buyer at 98%. Although in general they are the least tech savvy, 35% of home buyers still started their search online, however this group also is the first to contact a real estate agent for assistance.
Know Thy Customer
Selling a small, affordable first home to a Gen Y will be done through phone apps and social media, while a Baby Boomer will spend more time talking to family and friends to find a real estate agent who can assist them. Understanding who the buyer is for a property will help define the marketing strategy, and potentially speed up the sales process. In the end, it is still marketing. Whether marketing widgets or homes for sale, the process is the same.
“Home Buyer & Seller Generational Trends”, provided by The National Association of Realtors®, is packed with detailed information about home buyers and sellers, segmented into their different generational groups. You can read the summary on the Colorado Association of Realtors web site, or download the full 111 page report for more detailed information.