Realtors: Are You Targeting the Wrong Buyer?

For decades, Realtors have heavily marketed to first-time homebuyers…and for good reason. They had no home to sell, no sale contingency, and could often make a cleaner offer than someone who needed to sell before buying.

But times have changed and Realtors may want to change their sights.

Today’s first-time buyer is considerably older than in years past, while a surprisingly large percentage of active homebuyers are older Americans. In fact, buyers in their 60s and 70s  (make up over 46% of all current home buyers) have become an increasingly important part of the housing market.

At first, that might sound surprising. But when you think about it, it makes perfect sense.

Many of these homeowners bought their first house in their 20s or 30s. Over the decades, they either remained in that home or moved up, carrying their accumulated equity with them. Add the significant home-price appreciation of the past decade, and many are now sitting on substantial equity.

And their housing needs are changing.

The kids are gone. That 4,000-square-foot house that made perfect sense 20 years ago may now feel like a lot of house…and a lot of maintenance…for two people. Many are beginning to ask a simple question:

Do we really need all this anymore?

That creates an interesting opportunity for Realtors.

An older homeowner considering downsizing can potentially represent two transactions: the sale of the existing home and the purchase of a smaller one.

Significant equity may also give these buyers greater flexibility when negotiating their next purchase.

But there could be another benefit.

When longtime homeowners sell larger homes, they add much-needed inventory to the market. Some may also use a portion of their accumulated wealth to help adult children with a down payment…giving a younger generation, struggling to save enough cash, an opportunity to finally become homeowners themselves.

One downsizing transaction could potentially put several pieces of the housing puzzle into motion. Especially when the 60+ buyer is ready for their next chapter and not senior living.

For years, the first-time homebuyer was one of the most attractive prospects in real estate.

Maybe it’s time to widen the lens.

The next great opportunity for Realtors may not be the buyer purchasing their first home. It may be the homeowner ready to sell their last big one.

Times have changed.

Maybe your target market should, too.