Ever wonder what the future holds for the Australian property market? We sure do, especially after last year’s slowdown. The doom and gloom of price drops and credit restrictions led our team on a search for signs of improvement. During this search, we realised the unique vantage point our data provides. By analysing email interactions for agents all across Australia, we discovered promising trends that help us predict tomorrow’s market conditions before anyone else.
People don’t sell homes on a whim. The decision comes after weeks, months, or even years of thoughtful consideration, and it follows the pattern displayed below.
Can you imagine anyone buying or selling a property without doing some form of research beforehand? Even if someone chose not to actively seek out property values, or suburb reports, these days they stay informed without effort just by connecting with the outside world. Family, friends, social media, television and many other sources update us constantly about the real estate market. We can’t escape it without complete isolation from the modern world. So before anyone becomes an active market participant, i.e. a property buyer or seller, they are market observers. This means they have some level of market awareness, but they are not prepared to put an official offer on a property or list their home. Within this category, they are either passive or proactive.
This group reflects the vast majority but receives little attention. These people are not yet actively engaged in property mode, but they passively receive and interact with market insights. They might spot their dream home while swiping through Facebook or discover their suburb’s median house price has bounced higher than expected while watching the news. A timely email from a thoughtful agent could find it’s way into their inbox, offering sales insights, promoting a testimonial, and offering free appraisals. People can casually browse the content in these campaigns while keeping an arms distance from any transaction. There are only a few systems with the ability to capture and evaluate these soft interactions. Yet, these seemingly insignificant and unplanned market encounters can inspire a homeowner to research selling.
At some point on the home selling journey, the owners shift away from this passive attitude and adopt a proactive approach. Here they become active market observers, researching current market trends, properties, and agents. They might opt-in to receive market updates, scroll through realestate.com.au, or drop into a few local inspections on Saturday. They may even request an appraisal. During this stage agents often add them to their prospecting pipeline, hoping to become their agent of choice. Depending on individual circumstances, property owners can speed through this phase and list their property immediately, discover unfavorable conditions and slip back into passive observations, or spend years analysing data, waiting until their needs are met.
Once they decide to buy or sell, meaning they officially place offers or list their property on the market, they change from observers to participants. Generally, the board is set at this stage and the market takes control. Property statistics such as median price, days on market, or clearance rates emerge and define the market conditions, but they fail to offer predictive value on their own. If agents want to predict who their next client will be, they need to look further upstream at the market observers and identify the signs of progression towards the property transaction. Likewise, if agents want to know what’s around the corner for the industry as a whole, they need to look at the collective trends from the market observers.
For instance, iRealty tracks millions of interactions each year across Australia. These interactions range from passive observations like email opens and lifestyle article views, to active research and participation like property enquiries, finance requests, and property appraisals. This means we can track a swell of market activity long before it’s visible on the surface, and predict the trailing market activity.
Tracking the passive and proactive interactions equipped us to predict the following two spikes in total new listings and total sales. As anticipated, the total new listings saw a similar jump within a month of the appraisal request increase, and peaked in October. In November we saw the final wave of the set crest with the total sales.
Last year alone we sent nearly 60 million real estate emails all across Australia. From those campaigns, we tracked over 3 million unique interactions that helped us identify an individual subscriber’s position in the property journey, their property interests and intentions. When we analysed the data collectively, we discovered trends that can predict surges in the property market. And, by tracking buyer’s and seller’s passive real estate interactions, we can detect shifts long before most market indicators reveal themselves.
Key takeaway: In 2019 iRealty was able to identify subscriber’s property interests and their unique position in the property journey. How can iRealty help you discover the Market Observers from the Market Participants?