In a Sellers’ Market, when there are more buyers than sellers, it’s not as necessary to do the research and marketing necessary to identify the future buyer of homes, the buyers just show up and make an offer. In the Birmingham market it’s currently a Sellers’ Market for homes priced $500,000 and less but as the price of homes climb above $500,000 it becomes more and more a Buyer’s Marker, where there are more sellers than buyers. The table below, The History of the Birmingham Luxury Home Market, shows how The Baby Boomer Sell-Off has been driving this Buyer’s Market for the past seven years and will grow worse as we enter The Baby Boomer Dye-Off starting in 2021.
Sense 2011 the number of luxury homes listed each year has grown from 409 to 652 and the number of sales have grown from 132 to 331 but the inventory of unsold homes continues to grow while the average home sale price remains the same. Nine thousand Baby Boomers reach 65 each day in the US, this started in 2011, this inventory will continue to grow at a steady pace until 2021 when the Baby Boomers start dying and the number of homes coming to market will increase by 50% to 75%. Luxury home sellers in this market and future markets, will find it imperative to use all the tools available to first identify potential buyers then target market their homes to them.
Identifying your Buyer
The Numbers: Past sales data indicates that there’s a 58% probability that the buyer of a luxury home will come from the homeowners currently living within a 3-mile radius of the home for sale, a 22% probability that they currently live in Alabama but outside the 3-mile radius and a 20% probability that they will come from out-of-state. We also know that the average home owner lives in their home for an average of six years before considering the purchase of a new home.
Using MLS past sales data, we can identify all the homes and homeowners that have been purchased within greater Birmingham in any price range or any neighborhood from 2000 to 2011, thus having lived in their homes for over six years. This will produce your Target Market #1 for your home. As an example, this data would produce a list of 24,200 potential buyers for $750,000 to $3,000,000 homes in the greater Birmingham market. That might seem like a substantial number, but it effectively reduced your target market from 460,000 Birmingham households to 24,200.
There are over 3,600 active real estate agents in the Birmingham market, 150 of them sell 96% of the homes priced at $500,000 or more. There’s a 90% probability that an agent other than your listing agent will bring your eventual buyer to your home. These 150 agents are your Target Marker #2.
There’s a 22% probability that your buyer will come from outside the three-mile radius but within the state of Alabama and a 20% probability that your buyer will be from out of state, these two groups are your Target market #3.
If you have your home up for sale there’s an 85% probability that you’ll be in the market for a new home once you sell your current home. There are currently 631 listings in Birmingham for homes valued at $500,000 or more, 536 of those sellers will be in the market for a new home, 311 of them will buy a home within a 3-mile radius or their current home; this is your Target Market #4.
Marketing to your Target Markets
Facebook Advertising: The Pew Survey found that 79% of adult Internet users logged into Facebook at least once a week and spend an average of 20 minutes per visit. By uploading our 24,200 Birmingham homeowners (Target Market #1) into a Facebook custom audience you can direct advertising for your home directly to your potential buyers. The add should consist of a carousel of 10 picture of your home as well as a link to a dedicated webpage featuring an 8 minute “walk and talk” video presentation of your home. Your website should then gather the IP address of the viewer of your video and remarket your advertisement to them throughout their continued internet use.
Such a program creates awareness of your home and even if these viewers aren’t in the market for a new home they may know someone who is looking for a home just like yours, thus potentially reaching your Target Market #3. Through awareness you’ll generate showings and showings lead to a sale.
Other Agents: There’s a 90% probability that an agent other than your listing agent will bring your buyer to your home. These 150 agents, your Target Marker #2, are highly motivated to swiftly find the perfect home for their buyers. Each of these agents need to be made aware of your home, this can be achieved by sending each of these agents a brochure on your home and a link to your “walk and talk” video presentation. This can easily be achieved through email and can be repeated at any opportune time.
Zillow and Trulia: 90% of all US real estate transaction begin on the internet and the biggest players are Zillow and Trulia. This is particularly true for out-of-town buyers, your Target Market #3; ask yourself if you were moving out of state where would you start your search and what would you look for? Professional photography, drone photography and video are a must. Zillow and Trulia allow a 2-minute video on each listing, those listings with a video are shown at the top of the presented homes relative to the website visitors search. You must take advantage of this opportunity to gain exposure of your listing.
Current Sellers are Future Buyers: These current sellers, your Target Market #4, are easily identified by downloading their names and addresses from the MLS listings. You will add these names to our Facebook custom audience as well as send them a “Just Listed” postcard making them knowledgeable of your home. You will also encourage them to sign-up for your mailing list on your dedicated website.
Friends and Family: The average American has an email list of 649 addresses consisting of friends and family, church, synagogue, and club members. You know somebody who knows somebody who might be interested in your home. Why not send them a link to an 8-minute video of your home.
From Marketing to Selling
Your primary goal is to get prospective buyers through your front door. If your home is priced right and presented right it will sell but you can accelerate the process with some on-hands involvement.
Predictive Analytics: Why do some home sell quickly and others linger on the market? By using Predictive Analytics, you can compare your home to those homes that have sold and those that have not sold in your neighborhood and determine the probability that your home will sell in the average days on the market for your neighborhood. The MLS sales data provides over 500 data points to compare that will result in a 90% accuracy as to how long it will take your home to sell at any given price. It’s then your decision as to what your priorities are; get top dollar or sell and move on to your next dream.
Showings: Showings lead to sales; a potential buyer and their agent preview you home to determine if they have further interest. We believe that your listing agent should attend all the showings of your home; first someone needs to protect your property, second, you will want to gain feedback from the potential buyers, third you want your agent present to answer any questions and finally you want your agent to know the buyer and their reactions should you enter negotiations. This practice is contrary to the real estate industry standard; less than 5% of listing agents attend their showings. You will be paying a 5% to 6% commission to sell a $1 million home, you deserve more than a sign in the yard and a MLS listing, you deserve research, marketing and you deserve representation.
The real estate market is changing as the demographics of our city, country and world are changing. Technology and big data provide us with sales tools that did not exist 10 years ago. Best of US Homes is sharing this information to make you a more informed buyer or seller of real estate. If you are already working with an agent and you feel this information can assist in the sale of your home share this information with your agent.
If you’re not working with an agent and would like to learn more about our program give us a call.
Invite Kerry to speak to your group about the changing Luxury Home Market in Birmingham. BestofUS.email@example.com 205 919 6006
Kerry J Grinkmeyer
Best of US Homes
4935 Cold Harbor Drive
205 919 6006