Predictions over the past few months, for what to expect in the 2019 Canadian real estate market, are being greeted with optimism by some real estate professionals and developers, and with considerable concern by others. The Canadian Real Estate Association (CREA) announced in December that falling home sales in BC are expected to drag national sales down to lows we haven't seen in nearly ten years.1 According to Phil Moore, president of the Real Estate Board of Greater Vancouver, “In the Lower Mainland, we have a higher supply than we’ve seen in three or four years because everyone’s been taking the wait-and-see approach.”2
Ruben Gonzalez, chief economist at Keller Williams, also believes that sales will drop. “As we look toward 2019, we are anticipating home sales to decline around 2%. We’re expecting it to be another slightly slower year as buyers continue to wrangle with higher mortgage rates after contending with several years of rapid price growth.”3 “In early December the Real Estate Board of Greater Vancouver reported a nearly 43 per cent decrease in sales of condos, townhouse and detached homes in November, compared to the same month a year before”, according to Tom Davidoff, an associate professor at UBC's Sauder School of Business.4
In helping clients map out content marketing and lead generation strategies, we've discussed recent trends, and ways to turn them into marketing advantages. In every challenging economic situation, there have been those who tightened their belts, or jumped ship, while others decided to go all in, seeing the resulting instability as an opportunity. Here are a few opportunities that stand out.
Real estate trends going into 2019
1) The competition is stiffer than ever
Not only are there less deals being made, but the number of agents has grown. For example, The Real Estate Board of Greater Vancouver (REBGV) currently boasts a membership of more than 14,000; and every one of those agents wants their website to rank in the top 5. You've probably heard the joke about the best place to hide a body… on page two of Google's search results; nobody ever looks there.
The Opportunity: The good news is that over 95% of the real estate professionals are doing an absolutely horrible job of marketing themselves online. Instead of fully buying in to their careers, with a long term commitment to a specific geographic farm area and proven web strategy, they view their website as a necessary evil, and perhaps a tool to explore a potential market area. If it doesn't turn a quick profit, the site can be easily converted to target another city. The majority of the agents have gone with ultra cheap cookie-cutter ‘rental' sites. And their “me too” content is almost identical to that of every other agent out there, with a reliance on an IDX MLS feed to display listings, rather than building any permanent content on the site itself.
In online marketing, the story of Cinderella is an outstanding metaphor for the challenge agents face. In the classic fairy tale, the heroine captures the attention of the handsome prince, even though she shows up late to the ball. With the help of her Fairy Godmother, she arrives in an elegant coach, with a coachman and footman, drawn by a team of splendid white horses, wearing a jaw-dropping chiffon gown with glass slippers. In the face of overwhelming competition, you also have to make a huge splash. You either stand out in a big way, or completely disappear into the ambient noise.
You can differentiate yourself from the rest of the pack by showing visitors what makes you outstanding. While everyone else is trying to match the competition, and displaying the very same stuff, show your visitors what makes you truly unique. If you are special, owning your own custom-built website, that lets visitors understand and appreciate who you are, as a valuable resource that delivers a lot of useful information buyers and sellers can't find anywhere else, is simply a given. There's a huge difference between building a long-term online marketing asset, and just renting a template site built by a computer.
Your site should answer “why”… Seriously, of the thousands of agents out there with the same MLS homes displayed, why should they contact you? On average, you have 3 seconds before they click the ‘Back' button to check out the next site in Google.
2) There's a greater reliance on technology
Real estate is an industry that's embracing technology, even if adoption has been slower than in some other fields. Fully automated lead generation and nurturing solutions exchange valuable white paper and ebook information with prospective buyers and sellers, send out follow-up emails, manage newsletter publishing, and collect additional information about prospects each time they download a tantalizing document from a landing page.
Immersive 3D virtual reality tours now enable real estate professionals to show homes anywhere in the world, right on their devices. Users can navigate through photos, videos, floor plans and virtual reality experiences digitally. Condos are being sold without buyers ever seeing the properties. Online property exchange networks now allow closing documents to be sent back and forth, between agents, financial institutions and attorneys, for examination, amendments and signatures.
The opportunity: Real estate is a relationship business, and there can be real advantage to bucking the digital revolution a bit, to stand out from the noise. More efficient digital processes tend to reduce connections and interactions to primarily visual experiences.
For decades, agents have argued that they're worth every penny of their fees because of the special qualities and unique human interaction they bring to the listing and selling process. Traditionally, top agents have been experts in engaging all of the senses and emotions. And they're memorable, bringing their own confidence, charisma, style and personality to every meeting. If everyone's going digital, it's the personal touch that stands out.
One of my clients and I discussed ways in which he could stand out. He's a true gentleman, so we decided to take advantage of that. His shirts are neatly pressed, monogrammed on the cuff, and he prefers cufflinks. He confided that he still likes a vest with his suits, even though he feels they're out of style. He was very pleased when I suggested the vest become part of his signature look. I reminded him that Steve Jobs liked his black mock turtlenecks, Pierre Trudeau wore a red rose on his lapel and Deepak Chopra is rarely seen without his red Nike shoes with green tips.
Careful preparation precedes every meeting. He shaves about an hour before heading out, with a stunning double edge AS-D2 Feather razor. We live in a virtually fragrance free world, but there's always a hint of leather and woody vetiver in the air when he arrives, from his D.R. Harris Windsor shaving soap and aftershave splash.
Most agents will remember to dash off a quick email after a meeting with another agent, buyer or seller. My client pulls a small elegant note paper and envelope from his writing desk and handwrites a thoughtful note with a fountain pen. He mists the air with his aftershave, and then waves the note through it. The card has his personal monogram embossed at the top, and he seals the envelope with his wax seal. Nearly every day, he'll send out a few personal notes by overnight courier. A bit over the top? Hardly a day goes by that someone doesn't take the time to thank him for his thoughtful card.
3) Unrealistic promises are being made to sellers
One of the complaints I receive, when speaking with real estate agents, is that in the current market some agents have resorted to telling sellers what they want to hear, rather than setting realistic pricing. It's confusing for the seller, because there are experienced sellers essentially providing two ranges of prices. Overpriced, the home sits on the market, and the listing goes stale.
The opportunity: If sellers list with agents offering to market their homes at a higher list prices, there's usually no quick fix for that. The winning strategy here is preventative. A well structured and executed content strategy builds credibility and trust over months, and even years, through publishing valuable content. The trusted expert has a far better chance of convincing the seller that he or she has recommended the ideal price to list the property at. That trust relationship is built through the creation of hyperlocal content, timely blogging, landing pages and downloadable white papers/ebooks, helpful newsletters (not the annoying email blasts of listings), and social media.
4) A return to 1980s marketing tactics
Most real estate agents will be familiar with the 1992 movie, Glengarry Glen Ross, with Alec Baldwin's memorable line, “Coffee is for closers only.” In the movie, four agents are supplied with leads from the brokerage, and they are expected to do whatever it takes to close the prospects on those cards within the next two days. The premium Glengarry leads will only be issued only to the top closers.
In the 80s high pressure sales offices were common, for real estate, stocks, vacuum cleaners, encyclopedias, and many other items. I worked in that environment for a while and it was a tough gig. The office came up with the leads, and their policy was “UFO” (follow-up relentlessly Until you sell, or they tell you to F#^& Off). Whenever someone hung up on us, we were to yell “wood,” and attempt to fire the lead card into the waste basket with disgust. To hell with lead nurturing… churn and burn.
As the millennium neared the end, consumers were simply tired of high pressure sales tactics, and being chased on the phone, and then by email. With a drop in team sales, we're beginning to see a lot more offices pulling out the old play books.
The opportunity: Cold calling leads does work just often enough for people to keep doing it, but it also turns a lot of people off. Men have asked women to marry them on the first date, and received a positive response, but a longer low-pressure courtship is more likely to seal the deal. Not every buyer is ready to look at properties and make a purchase right away, and they resent being being called by a salesperson. Marketing guru and author Seth Godin once said that, “content marketing is the only marketing left.” He was referring to regularly creating and publishing valuable content the audience cares about.
Let's say that a young family is considering a move to a new city, to be closer to the wife's office. They have two children, own a dog, are very outdoorsy, and their son plays hockey. They begin searching Google, looking at schools in the area, parks, places to walk a dog, local hockey arenas, shopping, restaurant selection… and every search, the top 3 page results include well-written, useful information by one real estate agent. They discover in the blog that the agent recently played in a local golf tournament that raised money for one of their favourite charities.
One of the pages on the site, offers a free ebook to help with planning a move to the community. The information on the site has been so helpful they have no hesitation in entering a first name and email address, so they can download the document. Over the next 2 weeks, they receive 2 helpful emails with more information on the area, with links to blog posts and article pages, and an opportunity to download a companion Dining and Shopping Guide ebook. The landing page for the next document sells the value of the book, and asks 2 simple checkbox questions in the download form.
Monthly newsletters they receive are helpful, with information on the area; not the usual “my listings and sold properties” spam agents send out. In the first month there's an offer for another ebook on Schools, with additional in-dept school information not on the website. They eagerly download the next ebook, answering another checkbox question in the form.
They decide it's time to look at some homes, so they visit the many pages of information they found on our all star's site. They also check out various neighbourhood pages for that city. Being close to the ice arena, and one of the schools is important. At the bottom of each information page, there's a helpful map with homes around the venue. They take note of 3 homes and decide to request a showing.
Alternately, our agent now has a first and last name, and email address. He knows the area they're interested in, that shopping and dining are important to them, and that they have children in school. The fact that 3 ebooks have already been downloaded indicates that the information on the site is valued, and they are pleased to receive his newsletters, because they're still on his list. A tactful email at this point, thanking them for visiting his site, and for downloading the ebooks is appropriate. He mentions that he's always planning new content pages and ebooks to offer, and asks them if they have any questions or recommendations. It's completely non-threatening, and could be the start of a buyer/agent relationship. Often the questions are about specific properties, and a phone call is then welcomed.
5) Agents tightening their belts and cutting back on marketing
When less deals are being made, the pie becomes smaller. There's a tendency for many to just live on their small slice of that pie. They feel they can't afford their existing marketing, and make cutbacks. Of course, with less marketing, they're likely to sell even less, they cut back again, and it becomes a downward spiral.
The opportunity: There are real estate pros who see challenging markets as a time for natural selection to take out some of the competition. They have no intention of cramping their lifestyle, and living on a tiny slice of a shrinking pie until the situation improves; so they determine to increase their content marketing to scoop a few of the other agents' slices. Working in partnership with their content writer and strategist, they are able to create and publish more valuable content without breaking the bank. While the competition scales down, they're increasing their content base, exposure and market share.
6) Loss of faith in a specific geographic area, target audience or brokerage
In a tougher market many agents conclude things will be easier if they farm another area, target another demographic, or switch to another brokerage. They second guess their choices, and search for greener pastures.
The opportunity: The real estate professionals who have fully bought into their career, the neighbourhoods they serve, and the brokerage they selected, just smile when they see ‘nomadic' agents changing their game plans yet again. If you've ever played the board game Sorry (or variations like Trouble, Parcheesi, and Pachisi) you'll recall the joy of being able to knock off an opponent nearing Home. All of the dice throws and moves to advance their piece on the board are lost in a moment, and they're left to start all over again. When real estate competitors flush the plan, to chase greener grass, they are starting again. It's great for you.
It takes some time to develop a quality website, and create and publish the valuable content that will bring a steady stream of traffic and leads. Commitment to a long-term plan is a powerful asset.
7) Belief in legends and trying to recapture the good old days
When people feel stressed and discouraged, you'll often hear them mention that they wish things were simple again, the way they were on the Waltons, or Little House on the Prairie. They reminisce about the good old days in their own careers. They'll look to the legends in their own office… you know, the ones who have been selling real estate for 25 or 30 years. These old timers don't create ‘content', blog, have a lead generation or nurturing program, or engage in social media, and yet they have plenty of traffic, leads and sales. They try to convince themselves that they also don't need marketing. After all, some of the top performers don't do any of the recommended marketing stuff.
The opportunity: Here, it's just a matter of understanding ‘legacy status' and accepting reality. The old timers paid their dues years ago, doing it old school. They'd advertise on buses, city benches, in the newspaper, real estate publications, on the radio, and perhaps even on TV a few times a year. And every minute they weren't in front of a prospect, they were out walking their farm, door knocking. Many of them did this for years. They were at every Chamber of Commerce meeting, and grabbed any opportunity to become involved in the community. Every visit to the bank or barber shop was an opportunity to prospect. Their signs were posted on nearly every street in town. Almost everybody in their community knows them by name, and by reputation. When residents want to buy or sell a property, they go straight to Google, enter the go to agent's name, and Google sends them directly to their site. Because of all those searches, Google's algorithm concludes they are a really big deal, and just hands them top-5 rankings.
They don't have to do jack. All the work they did years ago gives them a free pass today. If you are not already the go to agent in your area, you're still trying to earn your way into the top ranking positions on Google, Bing and Yahoo!, and you want to topple the legends and claim their spots, you are going to require a well-crafted content strategy, and execute it almost perfectly.