Destination Florida: Strategies for Developing a Feeder Market
There appears to be no end in sight for out-of-town buyers hoping to make their new home in Florida. How can you reach them?
Like many Chicago residents, Dawn McKenna enjoyed spending family time at her second home in Naples. So, after serving buyers and sellers in her local market for 14 years at Coldwell Banker, she got her Florida license in 2017 and opened an office in downtown Naples.
“I had been referring business to my contemporaries who wanted my advice because I knew the Naples lifestyle,” says McKenna. “I was asked to sell five cottage homes, because of my connections in the Midwest. My team put signs in the ground, and we sold $38 million in listings the first day.”
Now, McKenna and her 32-person, multi-state team—The Dawn McKenna Group of Coldwell Banker Realty—draw on that strong connection with the Midwest feeder markets to bring buyers to the Naples area. “We advise them before they get on a plane, rather than wait to take orders once they arrive,” McKenna says. “Our clients include a growing number of young families coming to Naples from California, Arizona and Texas, as well as the Midwest.”
Today, it seems like almost everyone wants to move to Florida. So, it makes sense to take a proactive approach to building those long-distance relationships. But to spend your marketing dollars wisely, you need to identify the most promising feeder markets for your region. (See sidebar.)
Because Florida is such a diverse state, look at regional migration trends, which are often covered by local real estate associations and news organizations. You could also dig into U.S. Census data or other economic reports if they are available for your community.
Many businesses are also moving to Florida, leading to relocations of their executives and employees. For instance, Palm Beach County has been successful in attracting financial services firms from the Northeast U.S. and California.
“Our first step in developing a feeder market is to identify the locations and reasons that people are moving to our area,” says Crista Ryan, president of Tina Fanjul Associates in Palm Beach. “We have always seen clients from the New York area buying or renting in Palm Beach for the season, but there has been an influx in the past year.”
You should also look carefully at your local demographics. If your area has many French-speaking Canadians, for instance, Quebec could be a potential feeder market. If there’s a Major League Baseball (MLB) spring training stadium in your area, consider marketing to the team’s geographic fan base. For example, Lakeland has been home to the Detroit Tigers since 1934, earning the nickname “TigerTown.”
Once you’ve found a promising feeder market, develop an effective strategy for generating business either directly with buyers or through referrals from sales associates. Here are 10 suggestions for developing a feeder market.
1. Learn about your feeder market.
McKenna says one reason for her success is understanding the issues facing prospects in her Midwest market. “We know all about taxes and demographics, as well as the winter weather,” she says. “That knowledge helps us strengthen that connection between clients in Chicagoland and Naples.”
2. Travel to your feeder market.
After Hurricane Irma in 2017 affected his business in Florida, Lee Goldberg opened an office in Las Vegas, Nevada, and now serves the Reno market as well. “Hospitality is a key driver for both Orlando and Las
Vegas,” says Goldberg, a sales associate with Coldwell Banker Realty in Winter Park. “Another plus is that both markets draw buyers from Los Angeles and New York City.”
3. Get licensed in another state.
Both McKenna and Goldberg are licensed in their feeder market states as well as Florida. “It’s not a big deal to get that second license,” says Goldberg, adding that it can open the door to building a professional network in the feeder market. Holding a second license can also help you serve Florida buyers considering moving to a different state.
4. Form a bi-state team.
If you plan to spend time in a feeder market, having an assistant or a team in your Florida office is essential, says Goldberg. “You really have to look at your schedule and have good support in both locations, because you can’t be in two places at once.” Of course, video conferencing is an effective way to stay in touch when traveling isn’t possible.
5. Build a referral base.
Cultivating referral business has paid off for Vivianne Swietelsky, who leads the VS Miami Properties Group at Charter Realty Partners in Miami. “Nothing beats those personal relationships,” says Swietelsky, who has been actively involved in FIABCI–the International Real Estate Federation for more than six years and is a past president of the Greater Miami Council.
“I have friends across the U.S. and international markets, and we refer business to each other,” she says. “In the past year, I’ve gotten buyer referrals from colleagues in Baltimore, New York, California, Illinois and Florida.”
6. Determine your message.
If you live in a vacation market, showcase the warm-weather Florida lifestyle. If you seek to attract buyers to an urban area, you could highlight the state’s business infrastructure and work-from-anywhere features.
“We create email blasts, ads and social media content that appeal to the reasons people may be coming to Palm Beach area,” says Ryan. “Once we get in the forefront of their minds, it’s up to our agents to network and build trust with potential clients.”
7. Market your expertise.
Use a variety of channels to convey your messages to your target feeder markets. McKenna says she uses digital, print and social tools to reach Midwest prospects. For example, she posts news items about Naples on social media, reaches out to Illinois clients via phone, email and print, telling them about the Naples lifestyle, and last year, she gave out key lime pies to Chicago-area clients. “Be sure you highlight those connections on your website as well,” she says.
8. Use social media.
Swietelsky uses Facebook and Instagram to target prospects in her feeder markets. For instance, she hosts “FIABCI Fridays,” a bi-weekly show livestreamed worldwide on Facebook. “I’m also getting more contacts from LinkedIn, especially from real estate professionals from other states and countries whose clients are interested South Florida,” she says.
9. Create lifestyle videos.
Goldberg says video plays a large part in his success in feeder markets. “I highlight what makes Orlando or the Space Coast a great place to live, rather than simply as a vacation destination,” he says. “That might mean playing golf, dining at a great restaurant or going kayaking in one of the Florida springs. I want to keep things interesting for prospective clients without a hard sell. “
10. Cultivate relationships with recent arrivals.
Reach out to residents who may have moved from your feeder markets. After all, they may have family or friends who also want to relocate to the same community. “Our biggest success has been in repeat business, referrals from clients, friends and fellow real estate agents,” says Ryan.
While focusing on feeder markets is a great way to generate business from inbound buyers, remember that you may also uncover opportunities to serve local sellers interested in moving out of Florida. “Put your knowledge of feeder markets to work and cultivate those outbound clients,” Swietelsky says. “It’s a great way to build and strengthen your referral relationships in the U.S. and around the world.”
A changing pattern of migration trends
For decades, Florida has been a favored destination for U.S. and international buyers seeking vacation homes or primary residences. The COVID-19 pandemic shifted some, but not all, of those inbound migration trends.
“Despite a lot of predictions, COVID didn’t change the underlying U.S. migration flows that were in place before the pandemic,” says Sean Snaith, Ph.D., director of the University of Central Florida’s Institute for Economic Forecasting in Orlando. “New York and New Jersey continue to be big feeder markets for South Florida, while the Gulf Coast and Central Florida attract buyers from the Midwest states.”
Snaith added that people who move to Florida from the Rust Belt states, or the Northeast are looking for a change in the weather as well as the tax climate. “Other high-tax states, like California and Illinois, are potentially good feeder markets for Florida’s real estate professionals,” he says.
While inbound U.S. migration is up, COVID 19-related travel restrictions have shut down the flow of buyers from Canada, Europe and Latin America—the state’s three primary international feeder markets.
“South Florida is getting fewer buyers from the Caribbean, Central and South America,” says Ken H. Johnson, Ph.D., a real estate economist at Florida Atlantic University’s College of Business in Boca Raton. “But COVID isn’t the only reason. Many of the South American economies—except for Venezuela—are doing relatively well this year, and that reduces the motivation to buy in the U.S.”
On the domestic side, Johnson says Florida’s indoor-outdoor lifestyle and work-from-home convenience has helped widen the range of feeder markets beyond the Northeast and Midwest. Now, buyers are coming from Western states like California, Oregon and Washington, as well as nearby states in the Southeast. The Panhandle markets, for instance, appeal to second-home buyers in Georgia, Tennessee, Alabama and Mississippi.
Drawing on FAU’s proprietary research, Johnson said population growth in the Orlando, Fort Myers and Lakeland metropolitan areas is likely to exceed 20% in the next 10 years, surpassing Miami, Tampa-St. Petersburg, Jacksonville, Palm Beach County and Tallahassee. While much of that growth will come from U.S. states, Johnson expects international migration to pick up as well. “We expect an influx of buyers from Canada and Europe in the next few years,” he says. “That will spark growth in Orlando as well as the state’s coastal markets.”