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Increasing length of time in home impacts inventory, prompting adaptation
The “Homeownership Tenure and the Impact on the Real Estate Industry” report draws on observations and insights from ERA affiliated brokers across the country about how increasing homeownership tenure has impacted their business in the past, how they have responded and their views on what may follow in 2021 and beyond.
According to the National Association of REALTORS®, until 2019, homeowners were staying in their homes an average of eight years, up considerably from 2000 when the average tenure was four years. But given the market conditions of the past few years, homeownership tenure could possibly extend to 15 years or more.
The report investigates how the buying frenzy of 2020 may have impacted tenure rates. Last year, NAR indicated that 5.64 million people moved, a nearly six percent increase YOY. Many of those people may have moved outside of traditional life changes such as marriage, the birth of a child, divorce or retirement, bucking tenure trends. Understanding how this will play out in years to come will be critical in future bottom-line success for brokers.
Key takeaways based on the experiences of the ERA affiliated brokers featured in the report:
- Generating supply through innovative seller-focused marketing is key to capturing more market share.
- Creating connections with feeder markets has kept business in-house.
- Tapping into increased demand for multigenerational living has helped to capture a bigger piece of the pie.
- Cultivating renters through property management has created a solid pipeline for the future.
- Supporting agents with tailored marketing resources and CRM support has given them the competitive advantage of extra time to support existing clients and farm for future ones.
Quotes:
“Homeownership tenure is not a statistic that is typically tracked when evaluating market conditions, making this a unique industry report. In looking at homeownership tenure trends, it is clear that shifts in how long people stay in their homes impact inventory levels. Despite extreme ebbs and flows in market dynamics, successful companies are the ones that are able to balance short-term activity with long-term positioning. As we see from these ERA affiliated brokers referenced in the report, they have made strategic changes to their business in response to these shifts, knowing when and how to adapt continues to be a competitive advantage.”
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