Housing Market Recovery to Prompt Advertising Shift

Until recently, growth in the U.S. housing market had been fueled by the rising demand for single-​family homes. Realtors established their businesses by promoting homes that were for sale. Some analyst believe a housing recovery has begun but they predict that the type of demand in the industry, and the related advertising, will differ from what we’ve been accustomed to seeing.

To study global consumer demand, The Conference Board and Nielsen have joined forces to create the Demand Institute. The first report from the institute is about the housing recovery. Currently, analysts are looking for a ½ to 1% rise in prices by the end of the year which would indicate the beginning of a housing market recovery. Further, prices should rise annually by 2.5% during the next 2 years.

But the type of recovery we’ll see will be more about rental properties than single-​family homes for the next several years. For example, about half of people who want to move are looking to rent, not buy.   To meet this demand, developers will invest in multifamily buildings and they plan to market new rental units to younger consumers and immigrants.

In addition, analysts say that consumers who do buy homes are looking for smaller properties. Consumers also want “homes in vibrant communities close to local amenities.”

The new housing market means that realtors and builders will be heavily marketing rental units as well as smaller homes located in areas deemed desirable by Millennials. This change does not mean the end of the traditional housing market. Analysts say it will take another 3 to 5 years for many consumers to plan a move that involves the purchase of a larger home and that will signal the return of traditional market health.

[Source: Shifting Nature of U.S. Housing Demand. Demand Institute. May 2012. Web. 7 Jun. 2012] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.