The real estate industry has a lot to learn from the auto industry.
After real estate, the next biggest purchase for most is a new car. The comparison is valuable since new car sales are a leading indicator for home sales volume.
However, when it comes to marketing and overall sales, the car folks are knocking it out of the park while the housing folks continue to foul.
New car sales substantially outpaced home sales during the most recent recession and subsequent recovery. A recent New York Times article details the auto industry’s success in capturing the younger demographic via savvy internet marketing. For instance, Toyota and Google teamed up to develop a car shopping experience that integrates Google’s social networking and mapping applications.
But the real innovation lies in Gen Y’s funding source for these substantial purchases. Services like BoostUp look to a buyer’s social network as an instant source of crowdfunding.
The concept is simple. The user sets a goal to save for a particular purchase: a new car, new house, college tuition, etc. They share their goal with their social network and basically ask for donations. It’s not just begging for handouts – birthday gifts, wedding gifts and so forth can be collected as a contribution to the user’s BoostUp account.
True, prospective homebuyers can use BoostUp to save for their downpayment. But BoostUp is backed by the former Chrysler CEO. Dodge is doing something similar to promote their compact car, the Dart, with great success. So the innovations in crowd funding via technology are coming from the minds and money in the auto industry.
Where are the similar innovations coming out of the real estate industry? It’s clear by now that recent price peaks in California real estate were short-lived and not indicative of a real, demand-driven recovery. The homeownership rate is falling steadily. Household formation is down, especially among Millennials. We are in the midst of a monumental shift in demographics. And as far as the real estate community is concerned, it is business as usual.
The real estate trade associations, the so-called leaders in brand and marketing strategy for the industry, are focusing their efforts instead on building a monument to their greatness. In fact, the trade groups’ greatest innovation thus far has been AgentMatch, a principal/agent matchmaking service that real estate professionals have roundly rejected as misleading, inaccurate and unfair. Meanwhile companies like Zillow (in many ways, the “anti-realtors”) are thriving.