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www.technomine.biz Whitepaper Applied research Emerging Challenges and Opportunities in Real Estate Sales Offices Phone Web India Phone +917940075474 Email : [email protected] UK Website : www.technomine.biz UAE 01 Emerging Challenges and Opportunities in Real Estate Sales Table of contents Whitepaper Blurring boundaries between life and work 12 Emerging technology 14 Need for experiential marketing 16 Expanding real-estate portfolios 17 Integrated marketing and thought leadership 19 New paradigm for marketing 22 Niche real estate marketing 23 Building realtor brands 25 Summary of findings 27 References 28 02 Emerging Challenges and Opportunities in Real Estate Sales Abstract The aim of this whitepaper was to conduct a thorough review of academic, business & popular resources to come up with the latest evidence-based strategies that real estate professionals could apply to accelerate their business growth. 03 Emerging Challenges and Opportunities in Real Estate Sales Executive summary Surprisingly, although modern technology, social platforms and lifestyle changes played a massive role in driving real estate marketing, a human approach was the primary driver for realtor growth even as technology is becoming ubiquitous. 04 Emerging Challenges and Opportunities in Real Estate Sales This whitepaper aims to synthesize evidence based strategies through in-depth literature review of secondary sources such as academic databases, open-access research, online forums, blogs and websites. Ten years ago, the US housing market boomer generation gives way to a bubble collapsed. People started losing largely post-millennial population on their homes as property values both sides - agents as well as crashed and homeowners went buyer-seller markets. In fact, millenials bankrupt. Today, the demand for are the most significant client Executive housing has risen again but new component of the real estate industry summary homes are in short supply. According as they begin buying first homes to a study by the US Department of significantly later than their parents’ Housing and Urban Development, the generation did historically. As per current demand for housing is ten PwC1 forecasts, investable real estate times higher than the number of newly will grow by more than 55% in 2020. constructed homes on the market. The end-goal is to provide a Closely monitoring the economic, comprehensive overview of effective commercial and industrial sectors of marketing strategies that realtors can the U.S market can help realtors use to grow their business in the understand how buyer behaviour is current global and local context. Digital impacted by contemporary marketing resources used include websites such strategies. The real estate industry is as PwC, National Association of currently undergoing a significant Realtors (NAR), LCP360, Forbes, The transformation as the last of the baby Close, G2, Medium & Realty Times. 05 Emerging Challenges and Opportunities in Real Estate Sales Background As home prices rise, the average population struggles to find affordable housing in mid-large cities. Even in suburban neighbourhoods, realtors can harness professional insights, positive customer experiences and professional credibility to drive sales. 06 Emerging Challenges and Opportunities in Real Estate Sales We are no longer in an era where direct mail and door-to-door solicitations12 are the goto strategies for on-boarding real estate clients. This is especially evident in the real estate in four areas: housing, retail, investment and luxury markets. According to Jeff Korhan, the author of towns of America are being priced-out 'Built-In Social: Essential Social of the market as realtors and builders Marketing Practices for Every Small focus on luxury markets. Business', the convergence of social platforms, economic transformation as Not only are people being priced out of Economic transformation well as the continuous evolution and urban neighborhoods, previously ‘rural’ usage of technology have led to a locales are now full-on neighborhoods perfect storm for positive disruption in offering ‘starter homes’. Most of these real estate marketing practices32. are still out of the reach of the average millenial population3. As the search for Economic transformation a home takes longer, home values are As per the National Association of steadily creeping up. Consequently, Realtors (NAR)2, the U.S economy is sellers are trying to balance high listing less likely to face a recession in the price with time on market (TOM)16 and year 2020. buyers are looking for properties that provide the best value for money. Cities like San Francisco and New York Sellers will wait for better offers but have always been notorious for buyers will see unsold properties as skyrocketing property prices. However, defective resulting in negative herding as property values rebound, even and lower sale price. people in mid-sized but fast-growing 07 Emerging Challenges and Opportunities in Real Estate Sales Strategies like SEO marketing, content creation, visual storytelling and video marketing are instrumental in helping realtors market to the right audience. Content strategy is crucial in determining how potential clients perceive realtors. Social platforms Social dynamics also play a vital role in Key Insights: helping homebuyers finalize a property. Systematic, empirical evidence for the The study presented by Stroeble underlying mechanism is limited but highlighted two main findings Social some of the more recent studies have that are relevant to real-estate platforms revealed that social platform content sales: from friends and family does, in fact, Individuals talk about property impact property purchasing decisions. investments with friends Recent research by Bailey, Cao, Kuchler Social interactions influence 4 and Stroebel focussed on Facebook, individual-level housing the largest global social network. They investment decisions assessed demographics, anonymous snapshots social graph of friendship Social interactions also links and county-level locations and impact purchasing behavior found a strong positive correlation and aggregate house prices between social influence and beliefs about property purchasing. 08 Emerging Challenges and Opportunities in Real Estate Sales Smart technology is rapidly disrupting real estate. Realtors that fail to integrate technology into their marketing are missing out on opportunities. This applies to all aspects of real estate sales from client experience to sales cycles. Evolution of Technology Just like with other professions, as As technology evolves to proliferate more realtors establish ‘credibility’ our work and personal lives, through content, those with specialist forward-thinking realtors are and entrepreneurial skills will be able to harnessing the power of technology40 grab key opportunities faster. Evolution of to tap into the psyche of audiences Technology across retail, residential, luxury and Hyperlocal marketing6 is the new investment real estate markets. digital community-building hack. Realtors looking to succeed are Borrowing concepts from the larger zooming in on specific locales before marketing world, successful realtors landing and expanding to larger are focusing on the experiential markets. aspects of the real estate sales process. Within the investor market, redefining property utility with proactive Tech companies5 focus on saving use-driven analysis has resulted in an costs which directly leads to tech increased value among foriegn employees spending less. This investors.7 mindset impacts their home buying behaviour as they opt for affordable Buyers8 are willing to put in extra funds properties. for added amenities. 09 Emerging Challenges and Opportunities in Real Estate Sales 2019 Real-Estate Market Analysis Housing affordability Changing Workplaces Population shifts Smart technology As a consumer-driven market, real estate sales can be difficult to crack. This year, however, realtors in the US did particularly well. As per NAR9, compared to the first quarter of 2016 where 500,000 units were sold, the *first quarter of 2019 observed a sale of more than 700,000 units. In the *first quarter of 2019, there was high confidence among property buyers. Consequently, this last quarter will also see an upswing in successful property deals. As a result, new home sales are still going to be in good stead by the end of 2019. *For more information see the emerging trends section. 10 Emerging Challenges and Opportunities in Real Estate Sales Emerging trends 1. Blurring boundaries between life and work 2. Emerging Technology 3. Need for Experiential Marketing 4. Expanding Real-estate portfolios 5. Integrated marketing and thought leadership 6. New paradigm for marketing 7. Niche real estate marketing Retail Residential Luxury Investment 8. Building Realtor Brands 11 Emerging Challenges and Opportunities in Real Estate Sales 1. Blurring boundaries between life and work Rise of 18-hour cities and suburbs10 Challenge Millennials, now in their mid-30s, are looking to the suburbs for affordable housing. The U.S. Census Bureau reports that over 2.6 million people moved to the suburbs from principal cities in 2017. The prevalence of these ‘18-hour cities’ or talent hubs across western cities as well as mid-large towns in the country indicates that there is a growing segment with housing needs that are currently unmet. Opportunity These cities witness higher than average urban population growth and considerably lower cost of living11. With robust