Welcome to the Dove Direct Print and Marketing Blog. Today's post, "Selling Real Estate During a Pandemic," uncovers how COVID affects home buying behavior, the real estate profession, the rise of retail vacancies, migrations away from cities, and a host of other real estate issues that are in flux. Change is disruptive, invasive, and often challenging to manage, thus leaving folks uneasy. In retrospect, change is the only constant that all of us can attest to, and that will continuously occur, regardless of how comfortable our lives may be. However, the changes that we are currently enduring is driven by an invisible invader that requires we pay attention and respect its ability to sicken and kill. No, it's not all gloom and doom, as we inherently know how to survive and thrive. However, the profound impact on the real estate industry and the changes afoot suggest we rethink selling real estate during a pandemic.
Quote of the Day: "Before you start trying to work out which direction the property market is headed, you should be aware that there are markets within markets." - Paul Clitheroe
From the Cities to the Suburbs Before the pandemic, Millennials were already moving from cities to the suburbs. Their migration away from city-life to suburbia may have been a premonition. Or, maybe they just became tired of city living. Millennials moving to the burbs is a new growth area and, for many, has become the thing to do. And according to the Urban Land Institute's Virtual Fall Conference, Millennials are doing this more often than not.
As a result, the speed at which Millennials are making these real estate transitions to the suburbs has prompted multifamily developers to back away from the amenity wars once used to attract new buyers. Instead, housing is trending toward health and wellness concerns as a movement.
Millennials also understand that the way to acquire generational wealth is through real estate purchases. Folks who have been making real estate land and home purchases for decades are often believed to be well-off or wealthy. Real estate overall does not depreciate like an automobile or any other commodity, the exception being the stock market, which again is no guarantee, although Warren Buffet may disagree.
"Times of great change always present significant opportunities," said ULI Global CEO W. Ed Walter. "In the near term, our suburbs will benefit from new growth spurred by shifting demographics and changes to living and working patterns resulting from the COVID-19 crisis. Our cities will have the opportunity to respond by reimagining its public realm, building more resiliency, and reinventing assets, such as retail and office space, that were already struggling before the pandemic. As an industry, we have the opportunity to strengthen by truly embracing diversity and tackling the challenges faced by our communities."
There are marketing opportunities for both city and suburban real estate agents. With so many people opting to relocate, it would be wise for real estate brokers, mortgage lenders, agents, and banks to consider direct mail marketing, as direct mail pieces do get into the addressee's hands and are often read and shared without fail.
Reduction in Office Size
The ULI survey notes that 94% of real estate professionals expect companies to resort to a new policy that permits some part-time remote work, by which the need for office space, post-pandemic, will change that requirement. However, over 60% of the survey respondents indicated that office tenants might enlarge their footprints to garner new collaborating and interacting methods. Further, real estate organizations may also review the need to increase satellite locations and institute several smaller suburban areas. Real estate has always been a person-to-person business, and the hands-on, face-to-face element remains an essential tenant of the sales transaction. Real estate brands understand that maintaining the company culture while attracting new employees, providing training, and innovating must proceed.
Migration to the South As far back as 2000, families have been migrating to the South. In 2003, new families were relocating to the state of Georgia at a rate of 16.7 seconds per family. There may be different data reports on the exact timing, but the industry has experienced a migration rush. The pandemic has compounded the behavior change in this sector.
Now, it's being called the "Great American Move" for the single-family housing market. Gone are the days when folks want to be in the city. People are looking for low-density areas. Consequently, we are witnessing a suburban expansion. To be sure, this trend was evident about five years ago when Millennials began the push to start families. In addition, the South offers remarkably affordable housing, which is why the migration to the South is booming.
The Urban State of Affairs Markets such as Los Angeles, New York, Boston, the District of Columbia, and San Francisco, are all gateway markets that analysts predict will struggle over the next three to five years. It could be longer as people may be reluctant to return to the city and pre-pandemic highs. Any prediction should be taken with a grain of salt, as the pandemic is calling the shots, as no one can predict when and how preventative and effective healthcare measures will be available. Other pandemic predictions suggest that a second and third virus could enter the game, thereby further disrupting and delaying a return to business as usual.
The good news for the gateway cities lies in their command of entertainment, technology, finance, and education. So, it is very likely that their appeal will again be a magnet for real estate. People in the industry predict that some cities may opt to add more green space and promote outdoor activities.
Retail Brick and Mortar Downtrend Discount and online stores are surging, which means the demand for large retail brick and mortar destinations diminishes. According to ULI's survey, over 80% of the respondents in the survey indicated that COVID-19 is behind the rapid escalation shifting brick and mortar to online purchasing. Industry analysts predict there will be smaller physical retail footprints in the days ahead, which could produce several large commercial vacancies, which will drive rent costs down.
According to ULI's report, "Top brands will take advantage of lower prices to upgrade their locations, while malls will leverage empty space to improve their tenant roster or convert to distribution centers for online retailers."
The Net-Net When it comes to marketing to home buyers and sellers, COVID-19 has put a stamp on the best way to reach folks. In terms of efficiency, accuracy, and reach, we recommend direct mail marketing. Given the database management, fulfillment, and variable digital printing, which can bolster digital destinations engagement and response rates, it's a shoo-in. COVID-19 is pushing the real estate market into a new opportunity mindset. We will have to reimagine housing and develop a footprint for anti-viral technology buildings that organizations require and trust. Finally, any new technologies will need to keep the population safe during the pandemic and beyond. In summation, there are state and local issues, safety, and health concerns regarding buildings, new solutions for affordable housing, and more focus on diversity, inclusion, and affordability that are driving changes in real estate. Thanks for reading Selling Real Estate During a Pandemic!
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