Key Market Trends Future Shock Don’t Let Tomorrow Sneak Up on You.
Changes are coming and consumers are demanding you change too. Here are some trends to watch.
For real estate professionals preparing for the future, trainer Matthew Ferrara has a few words of advice. “Learn everything about the consumer,” says the CEO of Matthew Ferrara & Co., Methuen, Mass. “Master their habits, demographics, preferences and desires. When you master the consumer, the rest of your business plan gets easier.”
Like other industry experts, Ferrara believes changes in consumer behaviors and demographics, along with advances in technology and the evolution of the broker-agent model, will shape the real estate industry in the next five years. Here’s a closer look at these key trends. Consumers
New consumer tools. Buyers and sellers will have increasing access to online data about housing markets, such as mapping and comparative home values. And the tools available to consumers to accomplish their own analysis will only get better and better. “This does not mean traditional real estate services will go away,” says Steve Murray, editor of REALTrends in Denver. “But they will get pushed harder than ever to show why they should retain their share of the market.”
Greater customer intimacy. “As consumers feel more empowered by market data, they’ll demand that real estate professionals really try to understand them personally,” says Mike Staver, real estate coach and speaker with The Staver Group in Fernandina Beach. “Knowing the psychological dynamics of the customer will become even more important.”
Rise of generations X and Y. While baby boomers in their 40s to 60s currently dominate the Florida market, the balance will shift to Generation Xers, now in their 30s and 40s, and Generation Yers, “millennials,” now in their teens and 20s. “Most sales associates treat younger buyers like they treat the boomers, and it’s costing them sales,” Ferrara says. “Why run newspaper ads, when Gen Yers want to get text messages about their first home purchase?”
Going green. With higher fuel prices and continuing coverage of global climate change, Florida buyers will become far more conscious of a home’s energy systems and water-conservation features. Sales associates will need to understand things from a green perspective.
Rise of social networking. For younger consumers, online social networks like Facebook, MySpace and LinkedIn have become primary vehicles for communication. “If a sales associate wants to reach [younger consumers], he or she must become part of that world,” says Mike Pappas, CEO of The Keyes Co./Realtors® in Miami. Brokers
Consolidation. In five years, there will be far fewer brokerage firms—mostly quite large or quite small—predicts Murray. “The economics of owning and operating a brokerage firm have been moving this way for years,” he says. “We’ll see that those brokers able to invest substantially in technology will gain the largest slice of the market.”
A consumer-centric brokerage model. Ferrara expects brokers to realign their company missions to be more consumer focused rather than agent friendly. He says, “Finding the right services, products and price points is a piece of cake when you look at the customer, not the agent, commission splits and recruiting problems.”
The virtual office. As more sales associates work productively from a home office, personal vehicle or coffee shop, brokers have less need for a traditional office. “Our company is looking at several models for the office of the future,” says Clark W. Toole III, president and COO of Coldwell Banker Residential Real Estate Florida in Sarasota. “That includes a smaller ‘footprint,’ faster connection speeds, lots of plug-ins for laptops, client conference rooms and flexible walls so we can change an office configuration quickly.”
One-stop shopping. Companies that can offer mortgage loans, title insurance and other ancillary services in a consumer-oriented package will have a significant advantage, says Murray. Sales Associates
Instant response. Today, consumers want sales associates to respond instantly to their requests via phone, e-mail or text message. “Successful associates get back to the buyer or seller in seconds, using a PDA or smartphone [with e-mail and other data features],” says Toole. “In a service and information business, speed counts.”
Electronic marketing. The move to online and data communications is accelerating. For sales associates, that means using online tools to market listings—especially when reaching buyers in their 20s and 30s. For instance, an associate’s personal blog may become a foundation for an electronic marketing campaign or for educating younger consumers about mortgages, title insurance and the buying process.
Contact management. As the real estate business evolves, the associates of the future need a great contact management system, according to Toole. “You need that data in order to determine how best to ‘touch’ people,” he says. “It’s the foundation for providing personal attention and service.” Commercial Real Estate
In the next decade, the field of commercial real estate may look a little more like the residential sector, according to several Florida experts, who note three ongoing trends:
Greater cooperation. Sharing property information will become more important in a global investment marketplace, according to Pappas. He’s seen a greater flow of information on transactions and leases in recent years, although the commercial market is still fragmented compared with the residential MLS system.
More participants. With slow conditions in many residential markets, more sales associates are already moving to the commercial sector, says Cynthia C. Shelton, director of investment sales for Colliers Arnold in Orlando. “There are a lot of associates out there taking commercial training programs and courses.”
Increased online marketing. Like the residential market, commercial brokers and associates need to master online marketing strategies to be successful. Shelton says, “Now, you can post to thousands of Web sites, reaching buyers, sellers and investors around the world. This is the future.”
Of course, some things about the real estate industry won’t change in the nextfive years.
As Toole says, “Sales associates will always need good people and sales skills to be successful. You have to understand what’s happening in your market to help a buyer or seller make a good decision.” Richard Westlund is a Miami-based freelance writer.