Market research gives sellers an edge - Multi-Million Dollar Homes - Part 2 of 2

Two-part series focuses on the increase of million-dollar homes.

 

HONOLULU ADVERTISER July 16, 2006

BY LISA SCONTRAS

Custom Publishing Group

 

As the number of homes on the market backlogs, sellers are scrambling for a way to get an edge on the competition.

In turn, Realtors are fine tuning their market research to give sellers that edge, making it possible to understand where your buyer may be coming from — even before you post that ‘for sale’ sign

 

“Our agents know— with a high probability — where the buyer of your house is even before you list it,” says John Jacobson, research analyst at Prudential Locations LLC. “By analyzing buyers of luxury homes and studying every aspect of the market, we’ve really fine tuned the science of marketing your home.”

 

By analyzing buying trends going back 35 years, Jacobson has developed a statistical crystal ball. If you’re selling a home in Kahala, for example, he can tell you where it is most likely that your potential buyers live now.

 

“We recently completed an extensive Buyer Migration Analysis, where we examined the habits of buyers moving to and from various neighborhoods,” says Jacobson, who tracks and analyzes data for Prudential’s Fine Home Division. “We look to see what the patterns are and have analyzed buyers here locally as well as those outside of the state. Over the last six years, trends have been fairly consistent.”

 

Sellers in Kahala, for example, will find that typically one-third of people who buy in Kahala come from the surrounding Waialae/Kahala area, 15 percent come from neighboring communities of Kaimuki, Moiliili, Waikiki, Diamond Head, Kapahulu and Aina Haina, and 23 percent are coming from elsewhere in Honolulu — downtown, Ala Moana, Makiki and Hawaii Kai. Additionally, 18 percent of the Kahala buyers come from the Mainland and nine percent are international.

 

“Of course when you get up into the category of $5 million and above, half of the buyers come from the Mainland and 25 to 30 percent are foreign,” says Jacobson, who adds the numbers can be fine tuned further for more specific price ranges.

 

“It’s critical in today’s market to know about ‘buyer migration,’” says Jacobson, who initiated the study. “Such as when and why homeowners move from neighborhood to neighborhood. If you know where the buyers are likely coming from, you can target the people with the means and buying motives to make the upgrade.”

Once a property is listed, Jacobson’s research division searches those areas where the buyer is likely to come from to develop lists of specific people to target in those neighborhoods.

 

“For example, based on the homeowner’s tax exemptions, we can roughly determine age, which is one way we target the baby boomers who are more likely to buy a second home,” says Jacobson. “We also know how long the owner has held a property — which helps us to estimate how much equity they have in it and when they are most likely to buy again. Those kinds of factors are how we determine who we specifically target.”

Sellers benefit by targeting the buyers who most likely fit the buyer profile in their neighborhood because they can reduce the time on the market.

 

Artie Wilson, Fine Homes specialist and partner at Prudential, says that by using the data provided by the company’s research department, he is able to utilize marketing money more effectively.

 

“I’m able to target potential buyers who will genuinely have an interest in the property,” says Wilson. “And I can tell my seller, ‘This is how I plan to get you a quicker sale and a better price.”

Over the past five years, demographics, historically low mortgage rates and a robust market have made it real easy for sellers to find a buyer. With twice as many homes on the market this year as compared to last, the market has shifted to the buyer’s advantage, making it necessary for sellers to know everything possible about their prospective buyer.

 

“Traditionally, Realtors focus their research efforts on the property,” says Jacobson. “We’ve taken that one step further and are turning our attention to the people —the buyers and the sellers. We profile them, analyze the trends, and then identify what makes people buy and sell — saving our clients time and money.”

 

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