Last Updated on July 18, 2023 by Luke Feldbrugge
A real estate niche can help you and your business stand out in a market filled with generalists. There are a variety of different niches, so the best way forward is to think about what fits best with your interests and personality. Some niches require certifications and others require extensive study of a particular real estate sector, but others just need you to pay attention and understand people. And that, after all, is why you went into this business in the first place, isn’t it?
Research indicates that only 2% of agents specialize their practice, and that means there’s a great deal of opportunity out there for you to create your own real estate niche. Rather than focusing on anything and everyone, you could be concentrating your attention on areas where you could make a real difference. In a competitive market, you could carve out a reputation for being an expert. Here are some areas you could begin to specialize in and create a long term strategy for your business.
The Hero Niche
At Homes for Heroes, we created a special niche that is committed to working with community heroes; simply because we wanted to thank them for their service and sacrifice. We wanted to help them, give back to them, to make them feel respected, appreciated and important for all they do.
We want to reward them in a tangible way with the sole purpose of helping community heroes find their dream home (or sell their home so they can find their next dream home) and help them save some money in the process. Our community heroes include:
- Emergency Medical Services (Paramedics and EMTs)
- Law Enforcement
- Military (Active Duty, Veterans and Reserves)
- Healthcare Professionals
These hero groups make up over 28 percent of the U.S. population. That’s nearly 1 in 3 people in your market! Imagine if they all knew you as the agent who takes care of their home buying and selling needs.
Sign up today to learn more about our real estate niche and how to become part of our nation-wide network of real estate professionals who serve their community heroes. It’s rewarding, because you are part of a nationwide network, and it is a valuable tool for building referrals, loyal clients, and sustained business growth.
Your Local Real Estate Niche
You probably already have specific knowledge of the neighborhoods in your market, but you can dig deeper. Learning and networking with the school groups, sports clubs, church groups and small businesses (through the Chamber of Commerce) is part of learning your community and establishing your practice. But what if you took it a step further? What if you learned the history of the area and could tell your client base, not just about their property, but about its background. Maybe the whole neighborhood belonged to the farmer, old man Kunkel, before it was developed, and you can add some stories to your conversations with clients.
The Demographic Real Estate Niche
As people get older, their real estate needs change. That’s a given. Specializing in demographic groups such as Baby Boomers or Millennials is a great way to focus your attention and begin to understand what makes each generational group tick. For example, if you knew that Millennials are more likely to value the safety of a community over its affluence, wouldn’t that change your approach to selling them homes?
Baby Boomers (born 1946 to1964)
This generation is still making waves in the current real estate market, even though many have now retired. Whereas they have been famous for buying McMansions, usually in the suburbs, they are now downsizing. The National Association of Realtors reports that the median size of the home purchase made by Boomers in the United States is 1,900 square feet.
They are also selling their larger homes. The NAR also reported that Boomers make up 43 percent of all home sellers. Consequently, real estate professionals have two opportunities with Boomers: sell their current house and then find them a new, smaller home.
Need any other reasons to concentrate your real estate marketing strategies on Boomers? How about the fact that they have more real estate wealth and need less financing than the other generations out there. Boomers have nest eggs, savings, retirement funds, a higher household income and a lot of equity accumulated. When they go hunting for new homes, they are in a position to get exactly what they want. All you have to do is pay attention to them, as they are one of the most profitable real estate niches.
Generation X (born 1965 and 1980)
If you want some stats to justify targeting Generation X, right now, based on the most recent study by the National Association of Realtors, the median age of all recent home buyers is 53–up from 45 in 2021. That means the age of the largest share of buyers went from solidly in the Millennial range all the way to the middle of Generation X. That’s a big jump. In terms of potential sellers, The NAR report showed the median age jumped from 53 to 59, meaning younger Boomers are the most likely generation to dominate the sellers’ market. With Gen X, this might be the right time to concentrate on their real estate potential.
Gen Xers communicate differently, mostly because they are motivated by non-traditional methods and messages. And they have an attitude with a capital A. Knowing how to communicate with Generation X clients is the first step in building an effective real estate market strategy for this demographic. Knowing what drives them, what turns them off and what they want from you as their agent is key to working with this generation.
Millennials (born 1980 to 1997)
There are two things that will help you sell to Millennials: timing and message. Timing means right now.
“Millennials make up the largest portion of the population that are purchasing properties, with 43% buying new homes. That number is up from 37% in 2021, the National Association of Realtors found. Millennials also represent roughly one-fifth of the population in America and are the fastest-growing demographic in terms of homebuyers.” –Mortgage Professional America
The “wait and see if they can afford a home” mentality seems to be fading among Millennial home buyers, and almost half of Millennials are ready. And in terms of numbers, the Millennial generation is larger than the Baby Boomers. That all spells opportunity for real estate professionals.
What about message? With these young people, you need to pay attention to them and you need to understand their teamwork mentality. They aren’t necessarily driven by a personal agenda. They want fairness not just for themselves, but for everyone. They also like structure, value the rules and have a long-term strategy for their lives. Now, do you think you could sell them a house?
Generation Z (born 1997 to 2012)
The oldest members of this generation are just barely ready to buy homes. What are their expectations? There are a couple of points of research that don’t exactly agree. One says the majority of the oldest members of Gen Z expect to buy their first home in the next five years. Other survey research more conservatively states that 86% of these young people say that they want to buy their first home before the age of 35.
Either way, they are getting ready to start thinking about their real estate needs. This generation is eager to find their first home according to one of their own, Ally Carty.
The Green Niche
We’ve talked about different populations of people as a niche that you could look into when you want to specialize. There are also niches for types of property and types of homes. For example, the Millennials and Gen Z buyers are going to be attracted to green housing, i.e. environmentally friendly, energy alternative homes or developments.
If you decide to take your real estate business “green,” you will be talking to a particular niche of customers who are very passionate about what they want (and don’t want) in a house. You will also need to know a lot about the green technologies out there – from fast EV charging stations to microgrids to solar panels to wind turbines. Environmentally friendly housing is increasing and that’s because there is a demand. If working with this base of clients is attractive to you, it’s time to look further into this real estate revolution.
The Luxury Real Estate Niche
Some REALTORS® want to work with luxury buyers and very high-end properties. It makes sense because there’s usually a lot of money to be made. There is also a boost to your reputation when you can point to large sales of, frankly, spectacular luxury homes. It can be, however, difficult to break into this target market and you may need to review and potentially adjust your marketing campaign, your image and possibly your whole practice to meet the expectations of the affluent.
The New Construction Real Estate Niche
Selling new construction to home buyers is a quite different discipline. There are all kinds of things you need to consider – construction loans, finding the right property, contractors, construction timetables. For the buyers, there is often an endless series of decisions to make. On the upside, buyers don’t need to make as many compromises. If they want it and can afford it, they can have it. As a real estate specialist in this field you are going to be answering questions about permits, liens, bridge financing, zoning, appliances and more.
This niche will also require an extra level of patience from both you and your client. Construction timelines can be affected by materials, worker availability, schedule conflicts and weather. If you find that you have a natural talent for calming people, this might be the perfect real estate niche for you.
The Historic Homes Niche
On the other side of the niche spectrum, there are the historic homes. These appeal to the DIY type of client who doesn’t want just a fixer upper – they want to do total restorations of homes. If you like history, these homes can be fun to work with. You could become a valuable resource for the unique needs of these homebuyers. The clients for these properties over willingly overlook problems, things that would cause others to run for the exits. When these homes are completed, the photos of the projects make great additions to your marketing materials.
Rather than networking in normal channels, you may find yourself spending time at the local historical society. There are also rules from local governments about the preservation of these properties that you will likely want to get familiar with.
Townhomes and Condos
Single-family homes are not the only game in town. Boomers in particular will be looking at townhomes and condominiums as they retire. Condos can involve a lot of rules that the buyers need to know about, and the rules change from building to building. Most townhomes are two stories, so if you are selling to older buyers, you may need to look for single-story exceptions. You also need to explain homeowners associations (HOA) and their fees to your buyers.
Home Buyer Real Estate Niche
Another way to specialize in target audiences as your real estate niche is to be an agent who primarily works with buyers. As a buyer’s agent you will be helping them search for homes, set up showings, and helping them make offers. Depending on how volatile the housing market is, you will also be helping to manage expectations.
First-Time Home Buyer Real Estate Niche
Buyers who are looking for their first home need to know everything. If you like explaining how the real estate industry works, first-time buyers are for you. By definition, they tend to be younger, more eager and maybe a bit idealistic. As you prepare them for their first home, you will need to explain some of the complexities of home financing and mortgages; their mortgage lender will need to do most of the heavy lifting, but you should prepare them. The fundamentals like mortgage pre-approvals and home inspections will all be part of your curriculum.
Single Home Buyers
The number of single people buying homes on their own has increased over the past 20 years. The biggest increase has come from single women, and they currently make up almost 20% of all buyers. If you are interested in specializing in single people trying to find a home, this may be the perfect opportunity for your business. The trick with single people and housing is financing. Our mortgage lending industry is geared to married couples, usually dual-income couples, so some changes will need to be made as this trend increases.
Home Seller Real Estate Niche
You can also specialize in sellers, helping them establish a good asking price, negotiating with buyers and staging a house so it’s ready for showings. You will also be putting on your marketing hat to help them list, schedule showings and market their home on social media platforms. Digital marketing has opened up a lot of new opportunities for sellers, but it has also given them a lot more decisions to make. Having a digital marketing strategy already set up for your sellers will help them make good decisions. Since they have been through their first rodeo already, they don’t need as much education as a first-time homebuyer, but there are always some complexities that need explaining.
Homes for Heroes: Become One of 2% Who Niche
It has been reported that only two percent of real estate agents specialize and commit to a real estate niche. Specializing in a niche as a real estate agent is one way to differentiate yourself and your practice and build a loyal client list that generates referrals.
If you join Homes for Heroes, you can establish your niche very quickly by becoming part of a network of agents and lenders who have committed to thanking their community heroes; first responders, military, healthcare workers and teachers. We all have friends and family who are part of these hero groups, so thanking them for all they do for the community you represent makes sense. We’ve been doing it for more than 20 years. Thanking heroes is our specialty, and we can help you get started today.