Looking at the homebuilding market from Wall Street’s vantage point, homebuilders are on a make or break trajectory. According to TradingAnalysis.com, homebuilders ETFs (Exchange Traded Funds) and ITBs (Invitation To Buy) and home construction ETFs are tracking for the worst year since the financial crisis in 2008.
According to the Housing Trend Report (HTR) released by National Association of Homebuilders (NAHB) in Q3 2018, only 13% of all adults are planning to buy a home in the next 12 months. Compare the last 4 quarters of home buying intentions:
- Q4 2017 – 24%
- Q1 2018 – 17%
- Q2 2018 – 14%
- Q3 2018 – 13%
Of this 13% of “perhaps intended” buyers, 44% are looking for existing homes, 18% are looking for newly built homes and 38% are looking for either or homes.
First time buyers are big players in this last year’s home buying. In Q4 2017, 60% of prospective buyers were first time buyers; in Q1 2018, 45% of prospective buyers were first timers; 61% of prospective buyers in Q2 2018 were first timer, and in Q3 2018 58% of those seeing themselves as prospective buyers were/are first time buyers.
The intention to buy a home/condominium is inversely related to age.
- 19% are Millennials and 75% of them are first timers
- 13% are Ben Xers and 45% of them are first timers
- 7% are Boomers and 20% of them are first timers
- 3% are Seniors (no data on first time-ness)
These percentages point to the critical importance of customer services. Why? The pool of potential buyers and sellers is relatively small.
Real estate agents must be at the top of their game in market knowledge, lead generation, consistent lead follow-up, negotiations expertise and the fundamentals of trustworthiness (attentiveness, attention to detail, honesty, relational and network development, etc.) in order to earn their “magic number” of closed transactions.