Real Estate professionals know that today’s market is challenging, but as the market shifts the best thing to do is to learn from the most recent industry data, and focus your marketing on those prospects that will become tomorrow’s clients. But how do you locate those prospects? Recently, Campbell Communications released survey results of data collected this past spring that tells us how the market is moving.
Purchases by Homebuyer Type
The above graph shows that 43% of those buying homes today are first-time home buyers – slightly ahead of the percentage cited by NAR’s 2008 Profile of Homebuyers and Sellers, which reported only 41%. So, if investors and current homeowners are more skittish about buying property today, it gives us a good occasion to focus in on marketing to first-time home buyers, as the stats show that segment is growing this year. Knowing the “type” of buyer may help you gear your collateral and creative a bit, but it doesn’t help you target your demographics & direct marketing toward this buyer.
For this, we have to dig into the characteristics of buyers. NAR makes a point of identifying two interesting stats that we can correlate to actionable demographics:
- About 25% of first-time buyers identify themselves as non-white
- 20% of recent buyers are single women
While it’s true that the converse statistics are larger (75% identify themselves as white; 80% are not single women), NAR includes these as main summary points because they represent a growing shift in the demographics of today’s home buyer. A post on the National Association of Homebuilders website backs up this view saying “virtually every analysis of the demographics shows that in coming years, half or more of first-time home buyers will be from minority or immigrant groups.” In addition, they cite a Harvard study which found that “unmarried women accounted for 30 percent of the growth in homeowners” in past years. All these reports indicate that historical ways of marketing directly to home buyers need to be revised (or at least adjusted by the above referenced proportions) – from the message & offer down to the targeted demographics.
Unmarried women
This is the simplest group to market to, just based on the fact that gender & marital status are basic demographic points that most list companies gather fairly well. So choosing your demographic list selects on a direct mailing is pretty straightforward. What will require more work is thinking through your message. What are the true needs of single women with regard to a home purchase? What are their main drivers? Thinking through these questions will clarify your message and also bring up topics for you or your staff to consider when marketing & communicating with these clients.
Minorities & Immigrants
Though often thought of in the same breadth, to truly tailor your marketing to these distinct groups, we need to dig a bit deeper. While it’s true that immigrants are positively affected when companies market to their minority group, in most cases you can segment immigrants vs. American-born minorities and market to each group more successfully. If you do not have the resources to segment your marketing this far down, then focusing your marketing to a dominant ethnic group makes the most sense. Notice that I say a “dominant ethnic group.” This will be different in every part of the country, so it requires some research on your part.
If you have access to a special market-centric report provided by your broker, that may be your best resource. However, as for the freely available information on a market-by-market basis, some people like to use Wikipedia, but I find more comfort in relying on data provided by the U.S. Census. They have a great FactFinder website that gives a high level overview of the demographics of major cities in the U.S. I’d recommend doing your search by the city, and not the zip code to better understand your area’s demographics as a whole. If your market is a metroplex, like the Dallas-Fort Worth area, then doing several searches is probably necessary. Here’s one example breakdown using the city of Dallas as an example:
From the U.S. Census Bureau, 2005-07 Survey
In this example, it seems that African-Americans and Hispanics are the two larger minority groups. There is also the category “some other race” that is 16%, enough to warrant more investigation. Clicking on “show more” will get you that detail.
Whichever minority groups are large enough to focus on, the main point is that these percentages can serve as a good way to accurately allocate marketing dollars to attract first-time home buyers. By using your own city’s demographic breakdowns, it will take much of the guesswork out of figuring out the right targeted demographics for your own marketing.
