A decade after the onset of the Great Recession, the national housing market is finally returning to normal. With incomes rising and household growth strengthening, the housing sector is poised to become an important engine of economic growth.
But not all households and not all markets are thriving, and affordability pressures remain near record levels. Addressing the scale and complexity of need requires a renewed national commitment to expand the range of housing options available for an increasingly diverse society.
This conclusion is at the core of an annual report based on research done at the Joint Center for Housing Studies of Harvard University encompasses revealing data about the state of housing and rental markets across the 50 states.
When marketing to New Homeowners, it is only natural to look at what comprises this target audience. Of course, as you consider the impact of this data on business’ marketing goals, you must focus on the target market in which you offer your products and services.
Examine for example the change in pricing for the various markets across the nation:
The areas in blue reflect a negative price change over the examined period, while the shades of yellow and then red represent a respective increasing rise in prices over the same period (the red, a change of over 40%, and as much as 170%).
While real home prices rose by 32 percent nationally between 2000 and 2016, price changes varied across metros:
Home prices increased by 40 percent or more in 153 metros (16 percent), including twelve metros where home prices doubled. In contrast, real prices declined in about 280 metros. In another 200 markets, prices increased by 20-to-39 percent.
And in nearly 300 markets, prices increased but more modestly—by less than 20 percent.
Notes: Prices are adjusted for inflation using the CPI-U for all items less shelter. The peak median home price is the highest real home price recorded between January 2005 and December 2008. Median home values for metropolitan divisions are the median home value of the surrounding metropolitan area. Median home values are not available in some markets.
While in most areas the average wages have not increased in said period by even close to the 20-40% let alone above 40%, this clearly is indicative of the purchase power New Homeowners represent given the level of financial viability the present in terms of line of credit and in many cases even available cash (via equity).
This New Homeowners’ true show of power when it comes to their potential for products and services businesses (big and small) are looking to sell.
Simply look at the cut of the population that finds their local markets affordable for home ownership – as shown below:
Nationwide, 59 percent of households (or 64 percent on average across metros) can afford typical monthly payments in their metro area…
Notes: Median home price is for existing single-family homes only. Monthly payment assumes a 5% down payment on the median-priced existing home with property taxes of 1.25%, property insurance of 0.25%, and mortgage insurance of 0.5%. “Affordable” means payments cannot exceed 36% of monthly household income (calculated as 1/12 of annual household income) and assumes household can finance down payment and other related home purchase costs.
In the two “coastal” markets clearly lower portions of the population can afford home ownership, while the numbers improve (turn from orange, thru yellow to teal) as you deepen into the mid country, with local exceptions in various hot markets, in Colorado, Utah and other states.
In essence, as your business is considering viability of a market – addressing New Homeowners in hot markets such as the coastal communities, becomes clearly a strategic target, as they are able to make high recurring payments and enjoy building equity in an asset which keeps rising in value.
This just speaks to what Homeowners Marketing Services has been stating for decades. In normal housing market periods and certainly more so in periods of heat – targeting Homeowners, makes pure financial sense, and targeting New Homeowners, even more so, as on top of the common they share with Homeowners, they are in a particular period in their life where they are in time-sensitive need of products and services from house remodeling, general contracting and furniture, home design and appliances all the way to finding new services providers in their new area of residence; doctors, family recreation and shopping places.
There is simply no business, big or small, that will not benefit from targeting New Homeowners at the time of their move into their new residence.
Think about it and look at the numbers. Data doesn’t lie.
If you want to understand more, call Homeowners Marketing Services at your earliest convenience, and let us tell you about our time-proven, unique marketing tools that can place you in front of New Homeowners in your area, each and every week.
Don’t hesitate – Contact Us today. At the least let us learn about the sales goals you set for yourself and advise you about marketing your products and services to New Homeowners, based on over 4 decades of serving over 20,000 customers. We can help and we want to earn your business.