November 13, 2017
The Evolution of Real Estate Marketing
by Erin Johnson
Keeping track of the broader real estate market is one way that we in the fenestration space can forecast fluctuating demand for windows and doors. Lots of housing starts in the Northeast, for instance? Expect demand to spike. Multifamily construction stalling in the South? Expect the opposite.
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And we also know that the nature of homebuying and renting has changed in recent years—we’ve covered it in the past. Millennials, generally, aren’t buying homes at a similar pace of older generations, due to many factors, from mounting student loan debt to home affordability to changing attitudes toward property ownership. Multifamily building continues its climb around the country.
But there’s another thing that’s changing—the way homes are marketed to potential buyers and renters. Consider this recent piece from Forbes, which takes stock of notable ways new digital trends are reshaping how renters might choose their dwellings. The piece notes that where developers used to rely on physical advertisements such as billboards or newspaper ads, digital marketing has transformed the route to renters.
As a property manager, focusing on IoT (Internet of Things) technology when marketing your property is important for keeping competitive. For example, consider internet-enabled home features. By allowing your resident to connect their personal devices to their unit, they are able to control all technological aspects of the unit, such as lighting, fans, temperature and even door locks. With the easy use of the internet today, it is important to stay ahead of the game to appeal to future residents.
We’ve written about the Internet of Things before, of course, and the ways in which it’s impacting manufacturing practices throughout all industries—but it’s interesting to consider the more widespread ways ubiquitous connectivity is impacting all areas of our world. It’s not hard to imagine a potential renter getting a ping on their phone about apartment availability while walking through a neighborhood they enjoy. It will be interesting to see how developers begin to wield these new technologies in drawing renters, and what effects it may have on multifamily housing in general.
From the homebuying perspective, things have changed in recent years as well. Gone are the days where buyers and sellers depend solely on their real estate agent to bring them listings that match their criteria—the power is in the hands of the buyers with online tools.
Who among us hasn’t checked the popular site Zillow to see the “Zestimate” value of our homes, the company’s estimated market value for individual homes? In some cases the figure can influence behavior. In 2014, the Washington Post estimated that 90 percent of potential homebuyers begin their searches online, with Zillow as a powerful influence. The issue being that such a powerful influencer might not be an entirely reliable one. From the Post:
Market pressures change from week to week and from neighborhood to neighborhood. The motivation of the parties is always a factor, as is the condition of a home and those around it. No algorithm, however sophisticated, can quantify the value of a kitchen that was remodeled just before a home was put on the market or a yard that is poorly maintained. It simply isn’t possible for any AVM to predict the value of a home with a level of accuracy sufficient to make a housing decision.
And according to further, more recent research by Investopedia, Zillow’s algorithms can vacuum up data from a variety of publicly available resources, but that doesn’t mean those resources are up to date. The timeliness of that data can often depend on housing turnover, according to Investopedia. “So if you live in a hot market in the San Francisco Bay Area, your Zestimate might be more accurate than if you live in a rural town where people stay in their homes for decades and sales are rare.”
None of which is to slam Zillow, and nor has the company claimed their estimates are perfectly accurate. The bottom line is, they’ve provided a powerful tool to consumers that grants more transparency and control into their own buying and selling experiences. But the reality is that Zillow and sites like it influence real estate today, and it’s worth considering where and how those impacts are taking place.
And it behooves those of us whose businesses depend on a strong housing market to pay close attention to trends like these. Buyer behavior is continuously evolving, and staying nimble and proactive as it relates to these developments is a necessity for success.
Questions or comments? Contact me directly at Erin.Johnson@Quanex.com.
November 13, 2017 by Erin Johnson
Filed under: housing