One crucial factor is demographics if you don’t want to fly blind when marketing real estate.
Knowing about different demographics, their needs and demands, and where to reach them can make or break a successful real estate marketing campaign.
You can use this knowledge and adapt your current or future campaigns accordingly.
Today’s article will discuss how you can take advantage of the primary demographics influencing today’s real estate market.
What are Real Estate Marketing Demographics
One of the key drivers for real estate markets is demographics.
The data details how a particular population is made up, such as age, gender, race, migration patterns, income, and population growth.
These different drivers influence the real estate market directly and indirectly; for example, how real estate is priced and which types of properties are in demand.
Since market demand influences prices proportionally, you can see a direct connection here.
Suppose changes and shifts happen in the demographics of a country. In that case, significant new trends can develop, and others or past ones may disappear.
One of those changes is the baby boomer generation in the process of retiring in most countries.
Questions that would need to be answered are:
- Will baby boomers now demand more second homes in vacation areas?
- Would they like to downsize and prefer a smaller home selling their larger first homes?
- Do they prefer a smaller home abroad, taking advantage of geo arbitrage and accessing cheaper health care systems and lower overall living costs?
What happens when you ask these questions as an investor, find answers via hard data, and use a little common sense?
You can determine the trend and which marketing channels to use to reach the respective demographic group (or target group).
So let’s see if there is data to determine demographic trends and which marketing channels to use to reach the different target groups.
Needs and Real Estate Marketing Channels According to Age Group
There will be an increase from 8.3 to 16.2% of over 65-year-olds in the global population by the year 2050.
On the other hand, the population under 20 years old will decrease from 34.2% to 28.4% by the same year (source).
So, simply speaking, the world population will generally become older. This is the longer-term perspective.
Now, let’s get to the medium-term perspective.
As mentioned above, more and more baby boomers (born between 1946 and 1964) will soon reach retirement age or are already retiring.
This is a respectively large group, and it’s 22.18% of the American population.
In chronological order comes Generation X (born between 1965 and 1980). The American population is made up of 20% of this generation.
Almost the same size as the baby boomer generation is the millennial generation (born between 1981-1996), with a share of 22.03% of the population.
The youngest generation is Generation Z (born between 1997 and later), with a share of 27.68% of the U.S. population).
If the latter were already at an age with enough acquisitive power, they would significantly influence the real estate market demand.
I estimate they still have about 7 to 12 years to go until they gain market influence.
So the largest generations left are the baby boomers and the millennials.
Now let’s check what their preferences are in the real estate marketplace.
Real Estate Needs, Wants, and Trends of Baby Boomers
Back to one of my initial questions, most baby boomers will probably downsize, but not right now.
They will delay this until later in life because they will live and work longer than previous generations. (source)
Additionally, in 2018 they didn’t intend to sell their home. They probably won’t soon, as they will postpone downsizing (source).
This challenges millennials (usually first-time home buyers) and Generation X looking to upsize.
In contrast to past generations, baby boomers usually don’t prefer to move to an isolated retirement home. Still, they would choose to live in a local community consisting of various mixed generations.
These communities should ideally be walkable and consist of community centers, pools, fitness centers, and social clubs.
So, independence and active life are necessary requirements they have. (source)
Another development or trend is an increase in baby boomers renting instead of buying (source).
According to this source, the hottest real estate markets for baby boomers are North Port (FL), Miami (FL), The Villages (FL), Punta Gorda (FL), and Phoenix (AZ).
On Which Real Estate Marketing Channels Should You Target Baby Boomers?
According to the study of this source, the top three online activities for boomers are using search engines (96%), email (96%), and shopping for products and services.
Print materials like direct mailing don’t seem very effective with baby boomers.
Better than print media when it comes to offline marketing seems to be television.
The latter motivates them to search online for more information. (source).
It also seems that according to this source, television ads have the most considerable purchase influence.
In online marketing, the best way to go is by using search engines as a marketing channel.
It also seems to outperform direct mailing and viewing online videos to motivate them to take action.
So you could approach them by choosing search engine optimization via content marketing (the long game) or pay-per-click advertising via Google ads or Bing ads (the short game, source).
Real Estate Needs, Wants, and Trends of Millennials
In this article, I have covered how you can market to first-time home buyers, primarily millennials.
This generation is quite savvy and more informed than former generations regarding the real estate process, repairs, and renovation.
This is because their first word was basically ‘Internet’ when they were born.
They grew up with the internet’s development and are usually very tech-savvy and well-prepared. (source)
Therefore, they often independently access information about listings, neighborhood reports, HGTV home renovation videos, and further real estate market information.
A realtor’s job is to provide the information they couldn’t find online, such as data about a particular neighborhood, local housing regulations, or local market forecasts.
Many millennials find realtors and/or available homes on social media sites (source), and 99% go hunting for a property using their mobile device (source).
Roughly one-third of millennials bought a house at $300,000 or more in 2018 (source).
They have a slightly higher preference for suburbs over more costly urban areas. This preference is inconclusive, as they also like central city areas. (source)
And if you are a realtor, you should know that they prefer texting (source).
They are more willing to accept a smaller house to make a more affordable purchase. (source)
Another interesting preference in contrast to past generations is the taste for two full master suites and one standard bedroom in difference to one master and three standards. (source)
According to this source, the hottest markets for millennials are Seattle (WA), San Francisco (CA), Houston (TX), Dallas (TX), and Washington (DC).
On Which Real Estate Marketing Channels Should You Target Millennials?
There are some overlaps between marketing channels to reach baby boomers and millennials, but not as many as you will soon see.
- They watch, on average, 2.4 hours of online videos (source) and spend 2 hours and 38 minutes on social media per day (source)
- Regarding online shopping, 71% do it regularly via mobile devices. (source)
- Online content is useful for 83% of millennials when it comes to making a purchasing decision (source)
- More than 90% of millennials own smartphones (source)
- There is not much trust in traditional advertising; 84% don’t trust it. (source)
- 70% are Snapchat users (source)
- You can find them in 90% of the cases on Facebook. (source)
- Millennials are 247% more likely to be influenced by social networking sites and blogs than by advertisements (source)
So as some takeaways, you can best reach them on their smartphone using and doing content marketing via video promoted via Facebook Ads or Snapchat.
You should desist from using direct advertising and approach them more with some sort of education-based marketing.
The overlap with baby boomers is the use of search engines.
According to this source, 62% of millennials do five searches per day, and 68% do them on their phones.
The difference between baby boomers is likely that Millennials get prompted to search for something via ads or videos on social media.
Then they check it via Google, while baby boomers watch something on TV and then search for it.
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