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What’s the Key Age Demographic for Real Estate in This Decade?

January 29, 2010 by Brian Summerfield · 4 Comments
Filed under: Marketing & Prospecting, Selling 

By Brian Summerfield, Online Editor, REALTOR® Magazine

A recent report from the Urban Land Institute outlines a few important demographic groups in real estate going into the new decade. (The Teens? The Tens? Are we going to have another debate about decade labels after we failed to definitively resolve the last one?) 

Anyway, according to ULI, the following three generational groups will shape the fortunes of the housing market over the next 10 years:

1. Aging baby boomers (ages 55 to 64 years old): They will keep working, and many will be forced to stay in their suburban homes until values recover. Those who are able to move will choose mixed-age living environments that cater to active lifestyles. Walkable suburban town centers also will appeal to this group.

2. Younger baby boomers (46 to 54 years old): They are now entering their prime earning years but they will lack home equity and unlike the older members of their generation, they won’t be able to purchase second homes. This will likely curb the prospects for the second-home market.

3. Generation Y: They are larger than the baby boom generation (with a population of about 86 million). As they enter the housing market, they are less interested in homeownership than their parents were when they were young adults. “They will be renters by necessity or choice for years ahead,” says John K. McIlwain, author of the report.

(Note: The fourth demographic was not broken out by age, but rather by country of origin. ULI says the approximately 40 million legal and illegal immigrants will also factor into the fortunes of real estate in a big way.)

When reviewing ULI’s generational list, one major question comes to mind: Where are the buyers going to come from? If the characterizations above prove accurate, then many of the boomers are going to remain fairly stationary due to financial and employment insecurities, while members of Generation Y, the oldest of whom are now in their twenties, won’t be interested in the commitments involved with homeownership due to their age and income.

The answer may lie in a group ULI left off the list: the Gen Xers. This group, which numbers somewhere between 40-50 million, will be entering their peak earning years during this decade. Also, as they’re currently between their early thirties and mid forties, many of them are just beginning to consider homeownership—undoubtedly due in part to the fact that many of them have just started or will soon start families.

Sure, there will be some Generation Y and boomer buyers in the mix during the next decade, and not all Generation Xers will be anxious to purchase homes. But I wouldn’t be surprised if Generation X plays a bigger role in housing than any of these other groups. Plan your marketing and sales strategies accordingly.

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Tags: baby boomers, demographics, Generation X, Generation Y, housing market, immigration, ULI

5 real estate tech time-savers

Simplify day with e-sign, passwords, screen sharing

 

Are you looking for some simple new Web tools that will definitely help your business and won’t break the bank? Here are some great suggestions.

Evernote and Dropbox are the two relatively new tools that I use constantly. Evernote allows me to take notes anywhere on my smart phone or iPad. It then syncs those notes so they appear on all my devices, including my laptop.

I have complete accessibility to my notes at all times. Best of all, I can quickly search my notes to locate keywords. Evernote aggregates each document containing those keywords as well as highlighting the position of the keywords within the document.

Dropbox saves me tremendous amounts of time by avoiding the hassle of downloading and uploading files. Normally it would take three to five minutes to upload a 6MB video. I recently moved my presentations folder, which occupied 672MB of disk space, using Dropbox.

I dragged and dropped the file in my Dropbox folder. It took three minutes for the entire file to reach my assistant. For agents uploading videos and other large files, this system is terrific time-saver.

Here are five other tools that you may want to add to your toolbox.

1. Join.me
How many times have you wished that there were a simple way to share your screen with someone else? Until recently, the best option was to sign up for a service such as GoToMeeting or WebEx. Both systems take time to load and also require the user to upload the application.

Join.me is fast and simple. The first time you use the system, it will take a few seconds to upload the application to your computer. After that, all you have to do is to click on the icon that says, “Share my screen with others.” The system then generates a code that appears at the top of your screen.

Give the code to the person with whom you would like to share your screen. When they visit Join.me and enter the code in the appropriate box, the system automatically shares your screen.

Another great feature of Join.me is that you can also hand off control to the person with whom you are sharing. For example, assume that you have a new software program and you’re having issues with it. Your assistant has figured out how to use it, but you also need to know. Your assistant can screen-share with you. You can give her control and she could actually install the program and demo it for you. This can be a huge time-saver that eliminates a considerable amount of frustration as well.

2. Zosh.com — sign with your finger
If you own an iPhone, iPod touch or an iPad, you can save yourself and your clients time with a great little tool from Zosh.com. Suppose that your clients forgot to initial one of the pages of a disclosure statement and the lender can’t fund their loan without a signature. If they have Zosh, all you have to do is send them the document. They then initial it using the Zosh application and send it back. You can even sign documents using your finger. This is a great application that can save you a long trip across town to get a signature.

3. Never wait on hold again
Let’s face it. Most agents are busy and don’t have time to sit around on hold. If you have ever called customer service and waited forever to be connected somewhere overseas, LucyPhone.com is a free service that makes the wait disappear. With LucyPhone.com you enter the number you want to call. The company completes the call and rings you back once the other party is off hold.

Best of all, the company that made you wait actually has to wait a few seconds for you to connect, rather than vice versa.

4. Make your website mobile-phone friendly
Even if you own the latest smart phone, website and blog, load times can be extremely slow. If you want to make your blog site load super fast and fit perfectly to the screen size of mobile devices, you need WPtouch Pro. At $29, WPtouch Pro automatically makes your blog fit the small screens of mobile devices and also speeds up the load time by up to 500 percent. This is a great way to keep mobile visitors to your blog happy and coming back.

5. 1Password and Last Pass
Are you tired of trying to remember all those passwords for all the sites you visit? Have you taken to storing them on a sheet of paper or in your address book? If so, 1Password.com provides a great way to manage all your passwords if you’re running an iPhone, iPad, Android or Mac platform. The price is $39.95. 1Password works with file sharing systems such as Dropbox.

If you’re running a PC, another great product is LastPass.com. This stores your passwords on their secure servers. LastPass.com is only $12 per year and has received some rave reviews.

Each of these applications is relatively inexpensive, makes it a lot easier to conduct your business, and will save you plenty of time.

Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of the National Association of Realtors’ No. 1 best-seller, “Real Estate Dough: Your Recipe for Real Estate Success.” Hear Bernice’s five-minute daily real estate show, just named “new and notable” by iTunes, at www.RealEstateCoachRadio.com. You can contact her at Bernice@RealEstateCoach.com or @BRoss on Twitter.

 

 

Real estate price declines overshooting fundamentals?

PMI: Income growth has outstripped home-price growth in most states

 Home prices have fallen below fundamental values in more than half of U.S. states, overcorrecting from bubbles in some markets and dragged down by the recession in others.

That’s the conclusion of analysts at mortgage insurer PMI Mortgage Insurance Co., who warn home prices during the next few years will vary “far more by location than usual.”

PMI’s monthly analysis of economic, housing and mortgage market conditions attempts to tackle the question, “Have house prices fallen by enough to be affordable again?” The answer to that question depends on where you live, PMI analysts said.

PMI looked at home prices relative to income at the state level, using 1995 as a baseline. Because of home-price declines during the bust, growth in per capita income has outstripped home prices in 35 states over that time frame. Home prices are trailing income growth by double-digit rates in 30 states, PMI said.

States that saw significant price appreciation during the boom but which have now seen prices overcorrect include Alabama, Georgia, Idaho, Illinois, Michigan, Missouri, Montana, Nevada, New Mexico and West Virginia, PMI said.

States that were largely immune to speculative bubbles but which have seen home prices dragged down below fundamentals by the recession include Arkansas, Kentucky, Kansas, Indiana, Iowa, Mississippi, Nebraska, Ohio, Oklahoma, South Dakota, Texas and Wyoming.

States where home prices still appear elevated relative to income include Alaska, California, Hawaii, Massachusetts, New Jersey, New Hampshire, New York, Oregon, South Carolina and Washington, D.C.

PMI’s analysis showed prices have returned to historical norms relative to income in Arizona, Connecticut, Colorado, Delaware, Florida, Louisiana, Maine, Maryland, Minnesota, North Carolina, North Dakota, Tennessee, Pennsylvania, Rhode Island, Utah, Vermont, Virginia, Washington and Wisconsin.

There are many ways to measure affordability, but PMI chose to compare home prices to income because over time they should grow at similar rates.

In states where home prices have outstripped income growth, it’s possible that those prices can be supported if there are space constraints that preclude building more homes in desirable areas, the report noted.

In other cases, prices will have to fall further to bring house prices and incomes back into line. Because incomes are expected to rise over time, future price drops may be less than suggested by PMI’s analysis.

“House prices will likely fall in some areas in the near term, while rising in others as the recovery gains traction in different markets at different times,” the report concluded. “Each area’s recovery will depend on local supply and demand fundamentals such as economic growth, the amount of distressed sales, and household formations — likely augmented by how far above, or below, prices vary from incomes.”

The report forecasts that home sales will pick up in 2011, especially in the second half of the year, thanks to an expected rise in job growth, increasing numbers of households, and low mortgage rates.

PMI economists project existing sales will grow by 8.7 percent in 2011, to 5.36 million units, while sales of new homes will climb 19.9 percent to 385,000 units. Home prices are likely to continue a seasonal decline for a few months before edging upward as sales increase, the report said.

 

February housing starts near record low

Builders face financing constraints, compete with foreclosures

 Housing starts dropped 22.5 percent from January to February, to a seasonally adjusted annual rate of 479,000 — the second-lowest rate ever in U.S. Census Bureau records dating to 1959.

Monthly housing starts have fallen below an annual rate of 500,000 only three times since the government began collecting data more than 50 years ago.

The first time they crossed that threshold was in January 2009, when the pace of new housing starts slowed to 488,000 a year. In April 2009, housing starts set a new record low rate of 477,000 per year.

That compares to the all-time high seen in January 2006, when builders were starting construction on new homes at an annual rate of 2.27 million per year.

Because construction and the jobs it creates typically leads the nation out of recessions, economists keep a close eye on housing starts.

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Are we in real estate sales or customer service?

Know the creed

 

 

There is a lot of talk about real estate agents being in customer service. Certainly those talking don’t mean this to be news. We get paid to provide very important and very difficult services.

I am a commission salesperson and have been for 35 years. Should I apologize for this?

I think of transaction management companies and title companies being in customer service, because they build their business on relationships with third-party referrals (from real estate agents, for example).

Real estate sellers and buyers need a solution, not a towel. We don’t provide real estate services for tips based on guests’ whims.

I will believe I am in the customer service business when I get paid a fee or hourly rate for services rendered to a real estate homebuyer or seller.

We are dealing with large purchases on behalf of families and individuals who need our help. My guess: This is one reason they don’t Google “customer service” when they want to buy or sell real estate.

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