ERA® Real Estate released a new thought leadership report examining how homeownership tenure affects the industry.
The “Homeownership Tenure and the Impact on the Real Estate Industry” report draws on observations and insights from ERA-affiliated brokers across the country about how increasing homeownership tenure has impacted their business in the past, how they have responded and their views on what may follow in 2021 and beyond.
According to the National Association of REALTORS® (NAR), until 2019, homeowners were staying in their homes an average of eight years, up considerably from 2000 when the average tenure was four years. But given the market conditions of the past few years, homeownership tenure could possibly extend to 15 years or more.
The report investigates how the buying frenzy of 2020 may have impacted tenure rates. Last year, NAR indicated that 5.64 million people moved, a nearly 6% increase YOY. Many of those people may have moved outside of traditional life changes such as marriage, the birth of a child, divorce or retirement, bucking tenure trends.
Understanding how this will play out in years to come will be critical in future bottom-line success for brokers.
Key takeaways based on the experiences of the ERA-affiliated brokers featured in the report:
Generating supply through innovative seller-focused marketing is key to capturing more market share.
“The biggest way to get people to sell their homes is to educate them on the
current economic environment and create a sense of urgency to take advantage of the seller’s market,” said Gus Grizzard of ERA Grizzard Real Estate in the report. “The key message is to capitalize on the financial benefit. You won’t see a sellers’ market like this ever again, so take advantage of the opportunity to cash out at the absolute top of the market.”
Creating connections with feeder markets has kept business in-house.
“Feeder markets are an interesting concept in our local market. Fayetteville specifically is centered around Fort Bragg, an Army base, and experiences the ebbs and flows of government policy,” said Denise Strother of ERA Strother Real Estate in the report. “However, because of our positioning, we do see investors from Florida and New York quite often. These customers are interested in investing so they can flip for future one-time profit or generate steady income from rental properties.”
Tapping into increased demand for multigenerational living has helped to capture a bigger piece of the pie.
“In the last few years, we have noticed an increase in the number of clients looking for homes that can accommodate multigenerational living,” said Jim Napier of ERA Napier REALTORS® in the report. “Homes that have or can accommodate a first-floor bedroom and full bath will support aging in place for seniors. Our agents are also adept at marketing flexible spaces in the home that can provide privacy such as a finished basement or home office/den.”
Cultivating renters through property management has created a solid pipeline for the future.
“With such high buyer demand, we may see people rent for a year to wait for the market
to calm down. When mortgage rates start to rise, prices will soften, and fewer people will be in the market,” said Jeremy Raby of ERA Real Solutions Real Estate in the report. “This is why having a property management company right now is a great way to diversify a brokerage business. We currently have about 2,000 doors and are looking to double that based on what we see in our market.”
Supporting agents with tailored marketing resources and CRM support has given them the competitive advantage of extra time to support existing clients and farm for future ones.
“We just implemented a contact management platform to automate a lot of client relations outreach on behalf of our agents,” said Bill Soffel of ERA Team VP Real Estate for the report. “We made this a priority due to the persistent inventory shortage in order to generate more listings and market share.”
“Homeownership tenure is not a statistic that is typically tracked when evaluating market conditions, making this a unique industry report. In looking at homeownership tenure trends, it is clear that shifts in how long people stay in their homes impact inventory levels,” said Sherry Chris, president and CEO, ERA® Real Estate, in a statement. “Despite extreme ebbs and flows in market dynamics, successful companies are the ones that are able to balance short-term activity with long-term positioning. As we see from these ERA-affiliated brokers referenced in the report, they have made strategic changes to their business in response to these shifts, knowing when and how to adapt continues to be a competitive advantage.”
Click here to download the full report.
For more information, please visit www.era.com.