The AARC would like to wish you a wonderful and Happy Holiday Season! As we move into 2017, we look forward to continuing to provide the best information possible to our members and viewers. Information regarding research, marketing, trends, travel and leisure among other industry news. Stay tuned for the next year’s webinars, conference and events as well as our new Seal of Approval communities!
Andre’ Nabors Chair, The AARC
How Technology is Changing the Buying Process
Eric Porper, Focus3 | December 2016
As technology advances so do the expectations of potential buyers and one of the greatest advances is in the arena of 3-D Virtual Reality (VR) immersion tools. Potential buyers get a more in-person, lifelike view of a home without ever having to step foot inside.
VR can help real estate professionals sell homes faster and more efficiently. Recent research shows the average user spends up to three times longer at 3D and VR-powered websites than conventional 2D sites, and is twice as likely to call an agent after viewing. Virtual Reality and 3-D presentations will be an invaluable resource for private community developers.
Focus3 recently affiliated with Matterport, the Sunnyvale-CA immersive technology company that’s redefining how real estate professional present their properties on-line. Using the Matterport Pro Camera, Focus3 is now working with many of their clients to turn real-world environments into VR experiences that can be easily viewed on the web and mobile apps.
Focus3 working with the Matterport system spends about 1-hour scanning a typical home for one of their clients and then working with the Matterport software system generates an immersive Matterport space that is then viewable on websites, tables, smartphones and in Virtual Reality viewing systems.
Forbes Magazine recently said “Virtual Reality is about to Revolutionize the Real Estate Industry” and at Focus3 we embrace the evolution. While these tools will never replace the traditional real estate sales executives role it will provide them with the cutting edge tools to better present their offering.
Click Here to view samples
Camilla McLaughlin, New Home Source | December 2016
How they will navigate the coming decades is still not clear, but leading-edge boomers — those born between 1946 and 1955 — who have been empty nesters, weathered the recession and possibly retired, give a good indication of what’s ahead: they are more active than earlier generations, meaning anything from involvement with grandchildren to sports to community participation.
Many want to work after retirement, either by choice or necessity. The net worth of a typical baby boomer family is less than half of what it would have been if the financial crises had not intervened. Still, over the next five years, boomers are expected to spend $1.9 trillion (or more) on home purchases. Approximately 40 percent will move, but a good number will not venture too far from their current address. Health, grandchildren and finances matter most.
What Baby Boomers Want In a New Home
“Sometimes the move at 50 is horizontal,” says John Egnatis, CEO of Grenadier Homes in Dallas. “Some stay close to where they lived before. They might move to a new house, but they want to stay in a similar area rather than having to rebuild an entire network of friends, doctors, etc.”
Diversity Matters to Boomers
Even so, many seek a lifestyle change. “Quite a few of our buyers have visited places down South. They love the resort ambiance, so they are looking for something close to family and friends with that same resort feeling,” says Tammy Barry, director of marketing for Heritage Harbor Ottawa, a 142-acre marina resort master-planned community on the Illinois River, 90 minutes southwest of downtown Chicago.
For younger boomers, traditional retirement communities may not have the same appeal as master-planned communities do knowing they will be socially comfortable in a diverse neighborhood they expect to live in for a long time is important. Barry describes her community as “stroller-to-walker” — offering amenities for young families and older residents — and says residents love the variety of activities this diversity provides as well as the opportunity to interact and become friends with people of many ages. Overall, developers are investing more in clubhouses and community amenities that extend the living beyond the home and create ways for residents to interact.
Another catalyst to relocate is cost of living, which is why so many small towns appear on lists of places to retire. Often less expensive, college towns offer an eclectic mix of both activities and residents, so it’s no surprise places like Oxford, Miss., or Athens, Ga., are beginning to pop up on the retirement horizon. The proximity to the University of Georgia, and also Atlanta, is part of the appeal of the Georgia Club, an active adult golf community outside of Athens. “They can lay their head down anywhere, but when they lay their head down here, they are revitalized,” says Kathy Phillips, a real estate agent with The Georgia Club.
Fun in the Sun
In the last year, sales in the resort market increased by a record 57.4 percent. The National Association of Realtor’s Chief Economist Lawrence Yun attributes the hike to “baby boomers moving closer to retirement and buying second homes to convert into their primary home.” Traditional warm weather locations still appeal. Pam Charron, an agent with Berkshire Hathaway Home Services in Sarasota, Fla., says baby boomers are back. “The market has gained so much strength and prices are up quite a bit over the last two years.” Even if retirement is a few years away, many plan to buy before prices go up further. Along the west coast of Florida, new demand is sparking construction in places such as once-sleepy Venice.
This Generation Wants Luxury
Boomers typically are savvy buyers with a good vision of what they want and need now and in the future. For some, this next purchase will be the home of their dreams. A newly built home offers floor plans and amenities aligned with anticipated lifestyles. Many will downsize square footage, but upsize everything else. “They are looking for the highest finishes and they know what those are,” says Marisela Cotilla with Boca Raton real estate company Douglas Elliman. Part of the appeal of newly built homes in Florida is superior construction to the latest standards.
Personalization and Low Maintenance
“The ability to customize has been tremendously popular with our buyers,” says Brian Hoffman, vice chairman of Red Seal Homes in Chicago. “I am consistently hearing from buyers that they are delighted to be able to finally get their home ‘my way’ after decades in a used home. Many are also drawn to the defect-free aspect of new construction after years of making costly repairs to their 1970s and 1980s (or older) vintage homes.”
Low maintenance and having a home that will accommodate long-term needs are goals. “Our buyers aren’t necessarily downsizing — or at least not significantly — because they want to bring their furniture, art and such along with them, but they are looking for a more efficient floorpan,” says Hoffman. “Open concept with large rooms and plenty of storage is important, as is either single-level living or adding an elevator for when stairs become more difficult for them.”
First-floor masters are only one way builders are reaching out to boomers. Many are also adding high-end features such as wood floors, granite countertops, stainless steel appliances, walk-in showers and upgraded trim. Homebuilder Del Webb is even more focused on multi-level countertops, raised dishwashers and lowered microwaves that make access easier for those with physical issues.
Resale value may not be a priority, but financial planners say it is an essential consideration. “Everybody thinks ‘this is the last place I am moving to.’ But, in reality they might be there for a few years and miss their family and support groups” or discover that their location might not be what they expected, says Howard Joe, a financial advisor with Merrill Lynch in Atlanta.
Nancy Anderson, a Salt Lake City financial planner who writes a retirement column for Forbes.com, advises boomers to keep resale in mind because there will be a time when they will want or need to sell or tap into the equity in that home: “Even building a home, they should think about what’s a forward-looking trend, especially regarding the layout and colors. Schools still matter too. If you are not looking at schools, you will be losing an entire class of potential buyers. You always want to think of that next buyer.”
Drones for Real Estate Marketing: Are They Worth It?
In the last two years, drone technology has rapidly evolved. If you wanted an aerial image, you either had to hire a professional helicopter pilot or had to know how to assemble electrical components and solder wires, set up a flight computer and integrate a camera. Today, with a few clicks on Amazon, you can have a flying professional camera and supercomputer on your doorsteps within 48 hours.
With this major leap forward in technology comes a change in the way people are marketing and selling products and services in all types of industries, but one of the most prominent is real estate. Now that more and more real estate agents have access to aerial photos and videos through drones, homebuyers and sellers are changing the way they expect to interact with real estate listings.
Are Drones Worth It?
Some of you might be thinking, “Is it really worth it for me to pay someone to take aerial photos and video of my listing?” Let’s look at some numbers.
Let’s keep things simple and assume the price of the average home you sell is $350,000 (the approximate average as of October 2016), the total commission is 6 percent, your brokerage gets 3 percent, and you end up with 1.5 percent (half of the 3 percent). That’s $5,250 for you per transaction. Let’s also assume you close 11 transactions per year (NAR average for 2015). That’s an annual salary of $57,750.
Now let’s say you begin to incorporate aerial photos and videos into your marketing plan for your listings. If we go off of the statistic that homes sell 68 percent faster when using aerial imagery and that 73 percent of homeowners prefer to list with an agent who uses video, we can be conservative and say that you could attract 50 percent more listings and close 50 percent more deals—pushing the 11 transactions to approximately 17, which would result in an annual income of $89,250 in our scenario, an increase of $31,500.
The average cost of hiring a drone pilot to shoot and edit varies by the size of the property and the area you are in, but the average is about $500. If you use a drone pilot for each of the 17 listings, it will cost you approximately $8,500. That is a net increase of $23,000 per year ($31,500 minus $8,500) from deciding to incorporate drones, a return on investment of 270 percent.
So You Want to Hire a Drone Pilot. What Should You Look For?
It seems like every day there is another company popping up that offers drone photography and videography services. When searching for the right person for the job, it’s important to look for the following things:
FAA-Issued Commercial Drone License
The FAA established new regulations in August 2016 that required anyone using a drone for commercial purposes (defined as anything other than recreation) to hold a Remote Pilot Certificate with a Small UAS Rating. If you are going to hire a drone pilot, make sure they have this license. Not only does this ensure that the drone pilot knows the rules they need to follow, but it also protects you from being associated with any illegal operations. The FAA has handed out hefty fines to people flying drones illegally.
There are a number of insurance options out there for drone pilots. Make sure that your hired drone operator has liability insurance in the event something goes wrong and they damage that beautiful house you are trying to sell. Standard liability policies cover up to $1,000,000.
Experience and Quality
If someone is offering their drone services, it’s a given that they should have a demo reel of properties they have photographed and filmed. Go to their website, check out their work, and make sure it measures up to your standards. Not all drone operators are created equal. It takes practice and skill to get those smooth drone shots that make or break a listing video.
David Young is the founder of Drone Launch, a business focused on giving people the knowledge and tools they need to safely and profitably use drones for business. Contact David at firstname.lastname@example.org or through Twitter and Instagram @dronelaunch.
For more information, please visit DroneLaunchAcademy.com.