Building Towards the Next Boom Real Estate Profiler 2016 Brought to you by THE MEDIACENTER © 2016 THE MEDIACENTER. All rights reserved.

Market Stability & Durability = Sustained Profitability Total 2015 housing starts increased 10.8%, and the single-family sector 10.3%. New homes sold increased 13.4% and existing homes 6.9%. This steady, stable growth is much better for the long term, compared to the wild boom prior to the recession. Although new homes sold during January 2016 declined 5.4%, compared to January 2015, the seasonally adjusted annual rate (SAAR) for single- family housing starts increasing 1.8% and existing- home sales increased 11.0%. Despite one major snowfall in the Northeast, new homes sold doubled there from 15,000 for January 2015 to 30,000 for January 2016. The South still dominates, with 58.7% of all new home sold and 40.7% of all existing homes sold during January 2016.

Fine Signs and Fair Weather The National Association of Home Builders/Wells Fargo National Housing Market Index was 58 for February 2016, 3 points less than January’s 61; however, the February index for single family home sales during the next 6 months increased from 64 to 65. Household formations is a strong indicator for the housing market and CoreLogic forecasts more than 1.25 million new households will be formed during 2016, primarily because of a continuation of positive employment and wage growth. Most credible sources, such as CoreLogic and Freddie Mac, expect mortgage interest rates to average less than 5% and possibly less than 4.5% for 2016. Although some buyers will be deterred by this rate, pent-up demand will drive more sales for 2016.

Millennials Marching Towards the Suburbs The enormous impact of the Millennial generation (83.1 million) on the US real estate market is only beginning, as they are the largest segment of current homebuyers at 32% and represent 68% of first-time homebuyers, but 50% of them still rent. Millennials clearly want to live in the suburbs. It’s where 49% have already purchased a home and 75% would like to live there, according to a recent survey. They do represent the largest group owning a home in an urban area or central city, at 21%. Not surprising, 94% of Millennials visited Websites to search for a home and 50% found their home on the Internet compared to 31% through an agent; however, 90% used an agent or broker to buy their home and 68% interviewed only 1 agent.

Baby Boomer Buyers Not Finished Yet Millennials may be the largest segment of current and future homebuyers, but Baby Boomers are a close second, at 31% of current buyers: younger Boomers (51–60), 16%, and older Boomers (61–69), 15%. In the typical home-buying Boomer household, 65% are a married couple, 21% a single female, 9% a single male, 3% an unmarried couple and 2% other. Among younger Boomers, the primary reason for purchasing a home is a job-related relocation or move, at 16%, followed by a desire for a smaller home, at 13%. For older Boomers, retirement is first at 15% and to be closer to family and friends second at 9%.

The Right Place for Realtors The National Association of Realtors’ REALTORS® Confidence Index (RCI) of the current conditions for single-family sales was 59 for January 2016, compared to 57 for December 2015 and 58 for January 2015. The RCI for the six-month outlook in single- family sales was even stronger during January 2016 at 75, compared to 72 for December 2015 and January 2015. REALTORS® rated 13 states as having very strong single-family home sales during the next 6 months: South Carolina, Tennessee, Ohio, Indiana, Missouri, Iowa, Nebraska, Texas, Colorado, Utah, Idaho, Oregon and Washington.

Reveling in the Reach of New Media National Association of Realtors members’ preferred methods of communication with their clients during September 2015 were email, 93%; telephone, 91%, text messaging, 85%; instant messaging, 31%; and postal mail, 26%. Female REALTORS® and sales agents are the largest users of social media, at 70%, compared to 58% of men. Of all REALTORS®, just 12% write a blog, with those 29 and younger and 30–39 the largest groups, at 15%. REALTORS® and sales agents rely heavily on mobile devices, with 92% using them to communicate with clients; 61%, take/post photos; 59%, read/consume news; 45%, manage documents; and 35%, customer relationship management.

Advertising Strategies Realtors who want to maximize their Baby Boomer/retiree listings and sales should make TV a primary platform for branding their specialty, considering the 55+ audience has the highest penetration of TV viewers. Realtors may be able to appeal to Millennials with a combination of news and late-night TV programming and social media by promoting a weekend evening wine & cheese tasting party with live music. In markets with a significant Latino American population and one or more local Spanish- language stations, TV is the perfect medium to demonstrate an understanding of how much the family means to Latino Americans and their greater desire for multi-generational homes.

New Media Strategies Mobile will only increase in its importance as the best channel to reach Millennials, thus making it imperative for realtors’ Websites to be converted for viewing on a smartphone screen and for all future content to be written and designed for the mobile environment. Proactively inviting clients to write and post reviews and comments about their home buying experience is absolutely critical for brokers and realtors to position themselves competitively with Millennial homebuyers. Beacon technology is an excellent tool for realtors to use in model homes and listed existing homes. Virtually every prospect, regardless of age will have a smartphone, and receiving benefit messages about a properties’ features during a showing will be very appealing.

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