Demographic trends can redefine real estate needs
By Kim Shindle | Dec. 21, 2010 | 3 min. read
New Census data and surveys reveal that an increasing number of Americans views marriage as obsolete. Real estate coach and expert Matthew Ferrara said that will have an effect on the real estate industry.
“The interesting thing is that this data shows that the recession is only half financial,” said Ferrara, president of Matthew Ferrara and Company in Boston. “Half of the changes we’re seeing in the real estate market started to happen because of the changes in demographics and how people live their lives.”
Ferrara said with Gen Xers delaying marriage and many 20- to 30-year olds living at home longer, it changes the tradition of getting married after high school, starting to have kids and buying their first home early in their lives. Many people are waiting about 20 years to buy their first home and that changes the nature, the size and the frequency of their moves.
“People in their 20s and 30s move faster and further than their parents ever would have dreamed,” he said. “Owning a home means nothing to them because they take their online social network with them. All of these factors attribute to how and why people buy homes.”
Demographic trends are important to REALTORS® because the trends redefine who’s buying homes, where they want them, what they want, what they want to pay and what features are important to them, Ferrara said.
According to the NAR 2009 Profile of the Home Buyer, 60 percent of people buying a home did not have children. “Yet REALTORS® continue to give school reports to their clients,” Ferrara said. “Don’t you think it would be better to hand them a list of all the restaurants in the neighborhood? Or where the closest entertainment is?”
Ferrara said the new “sandwich generation,” people sandwiched between their parents living longer and their kids living at home longer, are a demographic that no one has predicted how it will affect the middle class income. “We may find this will help us absorb some of the larger inventory because they’ll have a need for a bigger house and they just might be able to afford them,” he added.
He said we’ve also seen a deconstruction of “family values” from the days of The Dick Van Dyke Show to today’s Jersey Shore. “Multiple people sleeping in one room is in vogue,” he said. “We used to see that on the Brady Bunch and then people moved to everyone having his own room. Now it’s okay.”
What does this ultimately mean for REALTORS®?
“REALTORS® are going to have to know their customers more than they know housing,” Ferrara advised. “Everyday REALTORS® go online and check the MLS data. What they should be doing is reading some type of demographic information – is the town building more schools, how many kids are graduating? This is the stuff you can predict – not the mortgage rates. REALTORS® need to study people every day; houses don’t buy or sell themselves. By studying people, you study a topic that’s factual and forward thinking. MLS data tells us what houses sold yesterday; it never tells you about tomorrow.
“If you keep one eye on houses and one eye on people, you’ll learn who they are and what they’ll buy. And that will help you make better business decisions,” he added.
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