Buyers and sellers have a lot to think about before deciding to contact an agent. So many factors go into buying or selling a home. Sometimes, buyers have no choice: they get a new job, either across town or across the country, and have to relocate to be closer to work. Other times, they want to move to a new neighborhood so that their children can go to a better school, or they’ve built up enough equity that they want to graduate from their starter home into something their family can grow into.
Whatever the reason, we know that when people move somewhere new, there is very often one (or even more) real estate transactions that need to happen. Recent trends in migration are giving brokers a new reason to invest in their relocation workflows and mine this incredible source of leads.
As we’ve talked about in previous posts, according to NAR, 43% of homebuyers today are millennials, the highest percentage of any age group. The economic and social trends affecting this age group are also affecting migration patterns across the country. Let’s look at some of these trends and how your brokerage can leverage them.
A survey reported in the New York Times found that as of April 2023 12% of workers were fully remote and 28% were hybrid. More and more employers are willing to grant their teams additional flexibility about where and how they work, which means employees are increasingly free to live where they want, not necessarily where their jobs are. In some cases, like in Silicon Valley, companies are changing office locations, too, giving their employees an opportunity to relocate to the same city or somewhere new entirely.
It’s no secret that interest rates are the highest they’ve been since the 1980s. This has had a big effect on affordability, and for many buyers, it’s a moving target. For example, if Sally Buyer prequalifies for a $400,000 mortgage at 4% interest, she might only qualify for $375,000 at 4.5% interest (just a half a percentage point increase), even if all other factors remain the same. Suddenly, properties she was considering are out of budget.
In an environment where interest rates are expected to rise a bit more, some of your buyers may need to shift their search outside of your brokerage’s service area. A referral becomes a win-win way to provide great customer experience and serve your own business goals.
According to the Brookings Institution, local moves (defined as moves within the same county) are at a historic low. At the same time, long-distance moves (defined as moves across state lines) have increased year on year since 2020. Let’s think back to the high percentage of leads that come from referrals: what happens when local referrals are at an all-time low, but the potential for long-distance referrals is much greater than in years past? The answer is still referrals—but relocation referrals, provided you have the right tools to manage them.
Another surprising trend is that white collar professionals are starting to make new and unconventional decisions about where they live. Cost of living and affordability are somewhat subjective, as each household or individual determines what income they need to feel comfortable where they live. According to a data analysis conducted by and reported in the New York Times, an increasing number of college graduates with higher-than-average incomes are following in the footsteps of their peers without college degrees and are leaving large coastal metro areas—New York, Washington DC, San Francisco, Los Angeles, etc.— where the cost of living is highest, and moving to midsize and smaller metro areas. A major reason movers cite is that these new cities offer the same kinds of amenities they had in the big city, but at two-thirds of the cost, or even less.
Another data point worth paying attention to: having a degree is also a strong indicator of home ownership. According to Point2, 70% of homeowners have at least an associate or a bachelor’s degree, while the share of homeowners who never finished high school is only 7%. Degree holders have a higher median income and are likelier to qualify for a mortgage.
This means a lot of your past clients may be considering a move soon. It’s an opportune time to reach out and ask to drum up more seller leads and provide a trusted relocation referral.
What picture are these statistics painting? More remote work, more long-distance moves, more college graduates who are likelier to be selling their home—it sounds like a great time to work on strategies to capture more relocation referral leads and refine the workflows for managing those deals.
To take advantage of these trends and turn relocation into a profitable source of leads at your brokerage, you need the best tools. Constellation1 Relocation helps relocation directors manage all their relocation leads in one centralized, web-based application, so you can access your data at any time, anywhere you have an internet connection. With the best features available to alleviate all the typical relocation workflow pain points, you’ll be generating more relo leads and managing them more effectively than ever before.
The Constellation1 team was pleased to attend the Relocation Directors Council Spring Event on May 22–23, 2023 in Dallas, Texas. We were glad to connect with so many relocation directors from across the country!