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Wednesday, September 4, 2013

Half of Homes Purchased with Cash: How to Shift with Buyer Behavior



Is housing back when half of homes are being purchased with cash?

That’s the case through 2012 and half of 2013, according to a recent article in the Wall Street Journal.

The analysis estimates that around 20% of all homes sold before the housing crash were “all-cash” sales (or around 30% of sales by dollar volume). But over the past seven years, the all-cash share of sales has more than doubled, increasing by more than 30 percentage points, according to economists Hui Shan, Marty Young and Charlie Himmelberg.
What is the reason for this shift?

What does it mean in regards to the outlook of the real estate industry?

Those are the two questions that need answered. But more importantly for you as a Realtor, you need to know who these people buying homes with cash are, and shift your approach if you plan to target them effectively.

Understanding your customers is critical to developing an effective marketing strategy and tactical approach. Does a cash buyer shop differently than a buyer who might put 20 percent down? How have home buyers changed since the housing crash?

A cash buyer obviously has access to more money than a recent college grad with his first full-time job and boatloads of student loans debt.

Many used to think younger generations were more likely to use sophisticated gadgets like smartphones, but are they able to afford them the way a cash buyer might? Would cash buyers be multi-device users, researching on their tablets while watching television with their smartphones by their sides?

The demographics of a cash-only buyer lead to the possibility of a more mobile, more nimble buyer. He knows what he wants, which is exactly why he might make sure to do the appropriate homework before deciding on what listing to purchase.  He also has access to the information he wants when he wants it.

The Wall Street journal report suggests that many of these cash purchasers are investors.   Perhaps they want to find the right property based on price, and could purchase a few more properties within the next year if the price is right on those, all from the real estate agent who provides the tools and information they are looking for.

That buyer wants to have a Market Watch report emailed to him on a regular basis, so he can easily browse the current market conditions and stay on top of the values he finds in the market he deems investment-worthy.

The recent trend of cash buyers marks a market shift that hasn’t been seen in some time. Smart agents with the right tools are able to adjust to market trends and capitalize, while other agents are still assuming the market is working as it always has or fail to adapt quickly enough.

While buying behavior is changing, the ways in which consumers are engaging with Realtors online is also changing, according to research data provided in the recent White Paper entitled, The Recent Shift in Real Estate Web Engagement.

This valuable report, backed by traffic statistics from over 35,000 websites, studies online trending and equips Realtors with valuable information on ever-evolving real estate consumer behavior. Click here to download the complimentary White Paper and learn how these trends could affect your business marketing efforts.

About Delta Media Group, Inc. 

Serving over 600 real estate brokerages, 35,000 agents and 225 MLS's across the nation, Delta Media Group is the enterprise marketing and business management solution for real estate professionals. Delta partners with companies and top-performing agents where marketing meets technology, helping clients efficiently grow their businesses from lead to close. For more information about Delta Media Group, visit www.DeltaGroup.com




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