For agents looking for new real estate niches, today’s market can be confusing. According to a Bloomberg article, 91% of formerly sleepy suburban communities saw more people move in than move out. In historically hot New York City, 100 people moved out for every 84 who moved in. Predicting where the real estate market will go next isn’t easy.
We don’t have a crystal ball, but according to most brokers we spoke with, there are six real estate niches that agents can start working to take advantage of today’s historic market shifts.
1. Corporate Relocations
With the sudden popularity of remote working in 2020, many large companies left states they had been in for decades for states with fewer regulations and more affordable housing. For example, Oracle, Palantir, and Hewlett-Packard Enterprises all left California last year.
While the conditions that led to these moves might be temporary, we predict many more large companies will try to lower their expenses by moving their headquarters in the coming years. We predict the reputational return on investment (ROI) of being headquartered in an expensive city will continue to decrease.
How Agents Can Start Working Corporate Relocations
While many large corporations have established relationships with real estate brokerages for relocations, many are informal, and not all employees use them. That means adding a corporate relocations niche to your business can help you get more leads and close more deals.
LinkedIn prospecting is an excellent way for agents to dip their toes into the corporate relocations niche without radically transforming their lead generation strategy. It’s way easier to get our content in front of decision-makers, and since the platform is designed for professional networking, you can easily reach out to professionals in companies that are moving employees or headquarters.
[Related article: 9 Ways Smart Real Estate Agents Are Using LinkedIn to Get Better Leads]
Since median home prices are up 17.8% year over year and job growth is stalling, more and more people are flocking to rentals, and rents are rising. The rise in so-called “digital nomads” means more people will be looking for housing options that allow them to travel around the country and the world. This means working rentals can become a lucrative niche for agents in 2021.
When I was an agent in New York City, I made $1,500 to $3,000 per closed rental transaction. Agents who worked high-end exclusive rental listings sometimes collected five-figure commission checks from one closed rental deal. While results like these might not be common in all rental markets, it proves that rentals can be very lucrative for real estate agents. There are two ways to do this in smaller markets: 1. Increase volume, and 2. Get exclusive rental contracts with developers.
How Agents Can Start Working Rentals
If you’re working in a hot rental market like New York City, just join a brokerage with exclusive rentals so you don’t have to rely on OLR. If you’re not, get licensed in property management if your state requires it and start pitching builders and developers.
One of the easiest ways to stand out in the crowded property management market is to sharpen your digital marketing skills. Learn how to build a WordPress website that can manage rentals and offer to build one for free for a local developer.
If you want to work the sales side, start educating your sphere on real estate investing with an eye toward renting. You can get started with these deep-dive articles on real estate investing from Sean Moudry:
- 3 Types of Real Estate Investing Every Agent Needs to Learn
- How to Analyze Cash Flow Real Estate Investments + Attract Investor Clients
3. Vacation Communities
We think vacation communities like The Hamptons in New York will become a great niche for agents this year and beyond. First, because many of them saw the largest influx of new buyers and rising prices in 2020, and second because the vacation rental market is going to explode from pent-up demand as the pandemic fades.
How Agents Can Start Working Vacation Communities
If you work near a vacation community and have the listings in your MLS, start marketing them to potential buyers using an IDX website. The idea is to curate listings from a vacation destination to a page on your website using IDX widgets, then drive paid and organic traffic to that page.
If you don’t already have an IDX website, use this as an excuse to finally build one. You can learn how here: How to Build an IDX Real Estate Website: The Ultimate Guide 2021
4. Luxury Buyers & Listings
Since economic downturns and inflation often lead to inflated asset prices, it’s no surprise that the wealthy people who owned those assets got even richer in 2020. We saw record highs in equity markets and even more explosive growth in cryptocurrencies. This is a big part of the reason prices rose higher and faster for luxury homes.
So if you live near a luxury area, chances are inventory is ridiculously tight, and most homes are selling above asking price. While there is some debate about when (or if) the luxury market will cool down, right now, it is still red hot.
How Agents Can Start Working Luxury Buyers & Listings
Finding luxury buyers to work in this market is relatively easy. You can advertise on Facebook or Google, network, or just join a luxury team. You’re going to want to give your branding and marketing materials a bit of a polish before you start, though. A strong brand is far more important for agents who are transitioning to luxury.
For listings, the road is rougher but not impossible. If you’re serious about transitioning to luxury listings, check Sean Moudry’s excellent article on the subject below. Sean has been in real estate for 27 years as a broker, coach, speaker, author, and consultant. He’s also one of our best writers here at The Close.
[Related article: 10 Easy Ways to Break Into the Luxury Market (If You’re Not Rich)]
While some agents get scared away from working FSBO because they think investors are snapping up all the inventory, Coldwell Banker CEO Ryan Gorman reminded us that it’s still a “very, very small percentage of the overall market.” It makes sense when you think about it. Just because the housing market is hot doesn’t mean homeowners suddenly learned how to sell houses!
So while the sharks look elsewhere for listings, pitching FSBOs can be an excellent niche for agents this year.
How Agents Can Start Working FSBO
Of course, none of these trends mean that pitching FSBO is easy. The market has left many homeowners with the idea that selling houses is simple. The trick is to find them when reality finally begins to sink in.
You can start by learning and practicing FSBO scripts. Chris broke down his seven favorite FSBO scripts here and explained why they work so well: The 7 Best FSBO Scripts of 2021 & Why They Work.
6. Millennial Homebuyers
It may seem counterintuitive, but the fastest-growing segment of homebuyers in 2020 was millennials, many buying their first homes. Most agents have heard this before (more than once!), but there are indications that millennials are finally stepping up to homeownership in a big way.
The first reason is basic demographics; millennials are now entering their prime earning years. The second reason is the explosion in popularity of house hacking and millennial real estate investing influencers on platforms like YouTube, TikTok, and Instagram. Cody Sperber, a 34-year-old real estate investing influencer from Arizona, has 1.2 million followers on Instagram.
How Agents Can Start Working Millennial Homebuyers
If you’re a bit older, you should probably start by brushing up on how millennials think and what they’re looking for in a realtor. We asked 11 top producing agents for their feedback in our article What Millennials Really Want From a Realtor: 11 Top Producers Weigh In.
Over to You
Know of an underrated real estate niche you think is poised to become more lucrative this year? Let us know in the comments.