Editor’s Note: The following commentary highlights findings from a recent survey of ERA Real Estate agents and brokers.
Who will be the key players in the 2017 real estate market? Fifty percent of respondents to the survey said investment buyers will shape the real estate industry and their markets in 2017, and 40 percent said this group will see an increase from 2016. With interest rates on the move, we think many potential investment buyers will be eager to enter the market before rates are raised even higher, particularly as U.S. leadership changes.
While the millennial buyer isn’t a new topic of discussion, they will becoming increasingly influential in 2017. In fact, 73 percent of our respondents expect millennial buyers to shape their market this year—an overwhelming majority.
Potentially related to the millennial buyer trend, about 20 percent said the industry will see an increase in group or multifamily buyers. We see this as including millennials moving in with their families but wanting to have a proverbial piece of the pie by taking part in the purchase, and grandparents moving in with their children in a mix of multifamily homes and in-law apartments. Additionally, this is a key area of growth in our multicultural markets, where the trend continues to be families living together in multigenerational homes.
Looking at the big picture from our agents’ and brokers’ perspectives, 75 percent said demand is currently outpacing supply in their market. We need to take into account timing, and expect to see supply and demand level out as we head into April and May; however, will this be the case for all 75 percent of respondents? Likely not. We as an industry need to once again prepare ourselves for a spring season of bidding wars and quick closings.
Knowing the continued increase in millennial buyers in 2017, brokers and agents are making plans for attracting the next generation of industry professionals, as well. To do so, 70 percent said they will be utilizing social media platforms and 27 percent plan to create a millennial ambassador program for word of mouth. Both plans show a recognition of the ways in which millennials learn and communicate, and their passion for forming digital and personal connections. This generation turns to its networks for everything from restaurant suggestions to job searches, which is a strength we as an industry need to capitalize upon.
On the other end of the spectrum, we have retirees. When asked about their future, 56 percent of respondents do have a succession plan in place, regardless of whether their retirement is imminent or not. This trend is directly related to attracting millennial talent, as succession plans need to look at the short and long term. For example, retirees must have an immediate successor to lead the business or take over their book of business, but they also need to think about the successor’s support system remaining strong.
Sue Yannaccone is president and CEO of ERA Real Estate.
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