We’re not in Kansas anymore! So now what?
Since 2007, many brokers have been hunkered down, trying to ride out the real estate storm of the Great Recession. Now we read that housing prices are finally bottoming out and even beginning to creep up in some cities. But a lot of things changed while brokers were huddled down in their storm cellars, and as skies begin to clear, they’re emerging to find a very different market landscape than they knew back in the heydays. Here are four of the key changes brokers should be mindful of:
Consumer behavior, attitudes and expectations. Home buyers are more independent and more demanding and they’re spending more time studying the marketplace before they’re ready to buy. Buyers and sellers expect to be able to research their options anonymously on the web, without any sales pressure, and they start earlier and research longer. When making inquiries of real estate professionals, they expect the information they want, when they want it and how they want it. Rushing people through the buyer lifecycle doesn’t cut it in the new market landscape. Nor does forgetting about them until they’re ready to make an offer.
Technology. It’s not just the Internet that’s changed things. Mobile, text messaging and social media are revolutionizing how consumers research, shop and share information about real estate listings. The number of consumers using tablets and smartphones has skyrocketed, and in fact more houses are now viewed on smartphones and tablets than a desktop, Zillow reported last week. In July, 168 million homes were viewed on Zillow.com via a mobile device – that’s 63 homes per second, compared to 21 homes per second just a year ago. Today a buyer standing at the curb can instantly get data about a property’s listing price, square footage, number of rooms, estimated valuation and past sales. Buyers can even get similar data for neighboring homes and schedule a showing.
The competition. In 2007, back in the days when Zillow was losing money at a rapid clip, a broker’s main rival was the brokerage office down the street. Today, the competition is a battle over search engine visibility, and aggregators are winning the game. Zillow’s number of monthly visitors now exceeds 34 million a month (adding in Zillow’s mobile apps), the company is profitable and boasts a market value of more than $1 billion. That’s because third-party aggregators are dominating the information space (web search engines) where home buyers and sellers go first to educate themselves about their local housing markets. By consistently ranking at the top of organic search results, third-party sites have become gatekeepers to your clients. They’re also selling key marketing tools and services to your agents, and have become the voice of the real estate industry in the media.
Agents. Many agents are more tech-savvy than brokers — they have a web presence, and are blogging and engaged with social media. Others are struggling with technology. Among both groups, agent loyalty is at an all-time low. Agents realize that their prospective clients are online but they’re frustrated by the low quality of the vast majority of Internet leads. They’re looking to brokers to help address the issue by using technology in more creative ways. They need brokers to engage and nurture potential clients throughout early stages of the buying process, taking more responsibility for online customer acquisition so agents can concentrate on closing transactions.
Has your brokerage changed with the marketplace? Unlike Dorothy in the Wizard Oz, brokers can’t just click their heels and return to the good old days. These fundamental shifts in behavior, attitudes and market structure are likely permanent and will become more and more evident as the market recovers. Since consumers are online and focused on self-service, for instance, the challenge is connecting with them by making their search as easy and efficient as possible.
Decisions about search engine marketing and website design should be based on attracting potential buyers and moving them smoothly through each of the stages of the home buyer lifecycle. Brokerages need to bring new digital technologies to the table to keep online prospects engaged throughout the journey and convert them into customers when they’re ready to buy. The critical capability going forward will be the broker’s ability to create relationships with consumers during the research and discovery phases of the buying process and to continuing to nurture them until the buyer has narrowed their choices and is ready to work with an agent.
If you haven’t fully embraced these trends and altered how you’re doing business, the housing market may spring back, but your business may not.