MARKETING OF RESIDENTIAL REAL ESTATE - HOUSES, APARTMENTS, CONDOMINIUMS, TOWNHOUSES
FEATURES OF THE INDUSTRY
The real estate market is generally divided into two segments concerning the "freshness" of the property - the new build and previously owned real estate. In this article, we will focus on the marketing of new build property in multi-apartment buildings, cottage areas, etc., as the marketing of each single pre-owned property is not a cohesive phenomenon. Instead, it is represented by the marketing of real estate agencies, which we address in a separate article. Indeed, almost every developer apply heavy marketing to new build real estate, while owners of individual apartments or houses in the pre-owned market do not need this. So, what does the marketing of new build real estate - marketing of new buildings and development areas - entail? To answer this question, we first need a general understanding of the real estate market. Here are its main characteristics that define the marketing strategies of real estate and developers:
- Economic and Social Factors. The real estate market is influenced by economic and social factors, such as employment levels, income levels, interest rates, and economic growth. These factors directly impact the purchasing power and willingness of people to buy or sell property. Social factors like demographic changes, population migration, and changes in family structure also affect the real estate market. Therefore, the real estate market is highly sensitive to macroeconomic and social changes.
- Market Fragmentation. The real estate market is inherently fragmented and divided into segments where the transition of consumers from one to another is unlikely even in the long term. This is because the average person buys property only a few times in their lifetime, and the options available are strictly determined by financial capabilities. This fragmentation is crucial for real estate marketing, influencing branding, positioning, and marketing mixes.
- Price Elasticity of Demand. Different price segments of the real estate market react differently to price changes, exhibiting varying elasticity of demand. Generally, higher-end properties have less elastic demand, meaning potential buyers are less concerned about discounts and promotional prices, basing their decisions on factors like status, quality, uniqueness, and convenience. Conversely, the economy segment is more sensitive to price fluctuations.
- Financing. Financing allows a larger number of people to purchase property as most buyers cannot afford to pay the full amount upfront. The availability of loans and interest rates significantly influences how many potential clients can afford to buy property. In times of low banking activity in the housing loan market, government programs become essential for providing preferential housing loans in many countries.
- Solid Marketing. Due to the real estate industry's long sales cycle, characterized by extended sales funnels from initial interest and information search to final decision and deal closure, no developer can afford episodic, non-systemic marketing. Instead, the industry is known by the development and implementation of powerful and systematic marketing mixes that ensure effective interaction with potential clients at all stages, from initial interest to deal closure and post-sale service.
The list of real estate industry features can be extended when examining various segments, property features, and organizational aspects. However, for the discussion of the marketing, the mentioned characteristics are decisive. Therefore, how do developers compete in such conditions, and what marketing elements are most commonly used?
SOME GENERAL STRATEGIES AND APPROACHESS
For successful real estate sales in the segment of multi-apartment new buildings and suburban houses, cottages, or townhouses, developers utilize the following marketing strategies, approaches, and tools:
- Branding and Positioning. Due to the segmentation of the market into distinct segments, where the transition of potential clients from one segment to another is nearly impossible, newly constructed properties need to have a clear and strong market positioning, targeting specific audiences. While this makes the marketer's job easier in terms of focusing on specific target audiences, it also leads to a prevalence of uniform positioning in each segment. In such conditions, marketers must employ more creative approaches and marketing programs to differentiate from from competition and to capture the attention of potential buyers.
- Integrated Marketing. Effectively combining the marketing of real estate properties and the marketing of the development company within a single integrated marketing mix is crucial for success in selling in new build property. Property marketing focuses on attracting potential buyers to specific real estate objects, highlighting their features and competitive advantages, while developer marketing concentrates on creating and maintaining a positive company reputation. The integrated approach involves the organic integration of both areas into a single marketing miex to create synergy and enhance efficiency.
- Digital Marketing Ecosystem. Establishing a digital marketing ecosystem in the field of new build real estate and is a crucial strategic step, allowing the efficient use of modern technologies for maximum engagement and support of potential buyers throughout the buying process. The digital ecosystem includes a modern website with a user-friendly interface and object visualization, mobile applications, landing pages, social media pages, email campaigns, placement of properties on third-party listings and platforms, etc.
- Content Marketing. Creating useful and engaging content for elements of the digital ecosystem is essential. Recognizing the purchase of real estate as one of the most important life staps, potential buyers require a comprehensive set of information regarding real estate properties. Marketers need to cover all possible preferences in presenting information (textual, infographics, photos, videos), emphasize parity and differentiation points of the properties and surrounding infrastructure, convey competitive advantages of both the properties and the collaboration process with the developer, and more. Additionally, technological marketing tools like virtual reality (VR) and augmented reality (AR) can be used for modern property marketing.
- Developer Reputation. Another marketing area in the real estate sector is developer marketing. The importance of building and maintaining the reputation of the developer cannot be overstated, as buyers trust companies with a known and reliable reputation. Ensuring high-quality construction, effective communication with clients at all stages of interaction, adhering to construction timelines, and resolving potential issues are key elements in creating and maintaining a positive reputation in this market.
- Handling Comments and Reviews. The use of Search Engine Reputation Management (SERM) tools and systematic management of comments and reviews on social media and other platforms in real estate marketing is extremely significant. The nature of the real estate purchase process is such that potential clients track any information about developers and their properties. Any negative publicity, especially that with a valid basis, can deter a significant number of potential buyers and significantly complicate sales. The ability to effectively monitor and respond to customer feedback allows companies to quickly identify and address potential issues, build a positive image, ensure a high level of customer trust, and defines the overall success of marketing campaigns.
- PR and Partnerships. The real estate market is characterized by the fact that a company's powerful publicity has a long-term impact on its image in long run. Successful and reputable developers conduct extensive PR work to stay in the spotlight of potential buyers for decades, creating news topics for top national media, building partnerships with leaders in other industries, participating in sponsorship programs for major sports and cultural events, and more. Partnership with financial institutions, in particular, deserves special mention, as it not only contributes to improving the developer's image, but also has a practical effect by creating more favorable financial and organizational conditions for obtaining and processing housing loans.
It should be noted that within one article, we cannot show all the pitfalls or demonstrate all the marketing methods and tools specific to the residential real estate. In other words, these are just a few examples of quite general marketing approaches that can be applied to real estate business. From a practical point of view, everything is much more complicated - the choice of a specific marketing strategy and tools depends on the target audience, competitive environment, and unique advantages of the company, etc. At the same time, it is desirable to understand that residential real estate marketing may encounter a number of specific problems that are unique to each individual case and require an individual approach to their solution.
Achieving the commercial objectives of a company through effective marketing requires a deep understanding of the market situation, consumer needs, the ability to analyze and explore alternatives, and a creative approach to problem-solving. Our company has extensive experience in defining optimal marketing strategies for our clients' businesses, creating a strong brand and market positioning, as well as developing a marketing mix and implementing the chosen strategy. You can familiarize yourself with the services and solutions our company offers on the "Services
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