Last week, we mentioned that COVID brought a fresh set of trends to the real estate market. One, in particular, saw investors purchasing 18% of all homes sold in the U.S. last year.
These trends speak to how certain buyers have found financial opportunities during the pandemic but also how they aim to improve their lifestyle in a post-COVID world. The trends also appear to be sticking around for the long haul, with many of them still favoring sellers in a competitive market.
So, how do you as a real estate professional fit into this new landscape? And more importantly, how do you find new buyers in today’s market?
A good place to start is by understanding the new buyer pool. What are their motivations? What are their challenges? How have their priorities changed?
Let’s take a closer look.
The New Buyer Pool in a Post-COVID Market
There are a few key things to know about the new buyer pool in today’s real estate market:
- Despite the uncertainty of the pandemic and its potential long-term effects, traditional home buyers are still eager to make a purchase. In fact, the buyer pool has expanded since COVID, with first-time and move-up buyers accounting for the lion’s share of this growth.
- While the buyer pool grew in size, financial flexibility did not. In other words, traditional buyers are concerned that they don’t have enough cash to buy a house or that investors will continue to outbid them.
- Since the pandemic began, housing demand and inflation have been on the rise, leading to a 20% increase in home prices. This, in turn, has made it difficult for regular buyers to compete in a fast-paced seller’s market, where higher down payments and bidding wars are the norm.
So, if many traditional buyers have been priced out and aren’t purchasing for the time being, how do you find new buyers in today’s demanding market?
3 Innovative Tips for Finding New Buyers in Today’s Competitive Market
We have three suggestions for finding new buyers in today’s market:
1) Target Renters
As we mentioned above, the new buyer pool is still quite large. Those who lost out on a property due to cost concerns, bidding wars, and other such factors may still re-enter the market as buyers when they’re ready.
Put another way, just because these buyers couldn’t secure the purchase of a property (and either became or stayed renters) doesn’t mean that they won’t be looking for a home soon. Many of them are renting in or near the locations they want to buy in. Families with children who are starting school in the fall may want to move closer to school districts, for example. Others have jobs that require them to relocate by a certain deadline.
What’s more, future buyers feel that staying connected to their desired neighborhoods can help them stay in touch with new sales that pop up in their respective markets. Any information they can obtain before it becomes public is incredibly helpful. But for that to happen, potential buyers often need to engage actively with their communities, and by extension, their local real estate agents.
Remember that the single-family rental market is still very big. The investment crowd snagged almost 20% of all single-family homes purchased last year and is now renting them out to these future buyers. As a local agent, it’s important to connect with these renters and offer them up-to-date information on local properties, local real estate trends, and local open houses.
If you can level the financial playing field for your traditional buyers, and educate them about “all cash” strategies or “quick close/no contingency” offers, then they can compete with any investment group out there. Fortunately, many brokers cater to traditional buyers and offer this sort of quick leverage and flexibility. Do some research online or find a few trusted brokers through word-of-mouth. Then, reach out to them to discuss a potential partnership or collaboration.
2) Target Crypto-Currency Holders
Our most avant-garde recommendation is to target high-caliber buyers in the cryptocurrency community, as they’re often a fairly untapped market segment.
While the word “cryptocurrency” might usher in images of Gen Z-ers mining Bitcoin in their parents’ basements, the reality is that there’s a large and growing number of Millenials and Gen X-ers — particularly those in their 40s and 50s — who have made significant investments in cryptocurrency and other digital assets. When the market topped several years ago and inflation rose, older generations found a way to protect their retirement accounts from the inflated dollar. They found Bitcoin.
Furthermore, cryptocurrency has become such a viable player in long-term financial security that Fidelity Investments announced recently it would begin accepting Bitcoin in its 401K plans. Meanwhile, NFT platforms like Propy are now taking cryptocurrency offers. Title companies and lenders are also following suit.
Although the older generation isn’t as large as their younger counterparts (who dominate the rental market), what they lack in numbers they more than make up for in purchasing power, investment savvy, cryptocurrency assets, and other financial flexibilities.
3) Be Patient and Persistent
It takes time and effort to build a network of potential buyers from the rental and cryptocurrency sectors, but the benefits are well worth it.
And though this might seem like a difficult task, think back to recent times when COVID turned the world on its head and $6-per-gallon gas became the new normal. Solutions are not always obvious but they are always possible.
Because markets swing outside of our control, it’s important now more than ever to keep an open mind, be willing to try new things, and remain patient as you work toward your goal of finding new buyers.
Your best chance is to always have a plan to anticipate growth in any direction, under changing conditions, with any buyer or seller. At best, it will allow you to add transactions to your pipeline and expand your business funnel. At worst, it’ll provide you with a great marketing pitch for your next listing appointment. And a great agent is always ready to show their clients all available options to sell their homes efficiently.
Of course, the single best tool for agents is to invest in real estate photography of the highest quality. This helps to showcase your listings in the best possible light and gives you a competitive edge no matter what the market looks like.
To find a professional real estate photographer in your local area and all others nationwide, visit HomeJab.com.