Choosing a real estate niche for marketing and doing business is important, and there could be a better way than just deciding to specialize in what you know best or in the biggest niche in your area. The Internet has effectively defined many real estate niche markets through the popularity of certain search phrases and website popularity. This can help you in making a real estate niche decision, so just what is a better way to decide on a real estate niche?
We all know the most common real estate niche markets, including:
- single family homes
- first-time homebuyers
- neighborhoods or subdivisions
- luxury homes
- commercial property
- entry level homes
- home construction styles
- vacation or resort properties
- waterfront properties
Strategy: Defining Local Niche Markets
There may be other obvious niche markets in your area, but you’re getting the idea. Now is the time to ask the quantifying question that defines the niche strategy. Would you rather have .02% of the overall local real estate market (example with 5,000 agents in the MLS), or perhaps 5% to 30% of a smaller niche with very little competition? Obviously, defining a productive niche and focusing on it with online marketing will be far more effective at a much lower cost if you’re marketing to a specific real estate niche.
Action: Do an Analysis
Sure, you can just select one of the obvious real estate niche markets, but think about doing an analysis of the sales from the MLS reporting system to try to pinpoint a niche that’s underserved and yields a significant number of listings and sales.
- Pull all of the previous year’s sales from your MLS.
- Group them by:
- property type
- area, neighborhood, subdivision
- price range
- buyer type or demographic
- common amenities (such as parks, green belts, major employers, etc.)
What you’re trying to accomplish here is to identify common characteristics of sold properties in various groupings and how they overlap.
Strategy: Identifying Overlooked Niches
We’ve all been doing this as a group of professionals for a long time, so the larger and most common niche markets are well known to us for our markets. The goal here is to locate possible new real estate niche markets that may involve a combination of the ones we know that are not served well by our competition.
Action: Identify Overlaps or Opportunities
Depending on the size of your MLS market area, there can be some interesting revelations when you begin to analyze the MLS sold statistics and how real estate niches overlap. Sure, you know that condominiums are popular in the urban areas of your market, and you know that many of them are sold. However, do you see a pattern of many more sales in specific areas?
Why not spend your marketing efforts and dollars in a smaller geographic area or a single area that has a much higher number of condominium sales related to inventory than other areas? In other words, if you identify a continuing trend of higher turnover of condominiums in one specific market area than in most of the others, why not concentrate on that area?
Suppose you’re farming a large subdivision or market area of single-family homes. In your cross-analysis of sold groups, you see that your farming area has a greater number of sales or higher turnover in the entry-level price range. You can reduce your marketing farming costs significantly and double-up on your mailings and other marketing to that price range niche.
Work on Cross Grouping
Spend whatever time it takes to determine where overlaps in sold property characteristics overlap. Once you find some interesting high sales levels in underserved niches, run the numbers for the dollars and transactions to see the potential. You will likely find one or more real estate niche markets that are not being specifically targeted by your competion. When you do, you’ll gain not only a local marketing advantage, but a search engine ranking advantage for the right key phrases for that real estate niche market.