What a Long, Strange Trip it’s Been
Much has happened in the real estate market since December 2008— record foreclosures, record-low mortgage rates and bottomed-out home values to name a few things. For professionals who work within this sector—the agents, brokers and mortgage specialists—these last few years have been a wild and not-so-pleasant ride. But how has the roller coaster been for promotional products distributors and suppliers who serve this market? Is there room for a return to sustained sales growth?
WHERE WE ARE
"The drama is nearly over. After a decade of extremes—the ebullient highs of the real estate boom, then the devastating lows of the bust—calmer forces are beginning to prevail in the housing market." - CNN.com, April 1, 2010.
"We really had to cut back on everything, primarily on advertising and mailings," said Joanne Scotti, Realtor/partner owner for Keller Williams Real Estate, Doylestown, Pa. "Agents are definitely still buying promotional items, we are just buying differently."
If agents are still buying, then reason suggests that distributors and suppliers should still be selling. Lisa Kor, marketing manager for Fey Line, Edgerton, Minn., supported this claim. "We continue to see strong sales for our real estate-focused products despite the recession; however, we have noticed reorders that are for lower quantities than previous years," she said.
Agents' favorite promotions, even in times of distress, have been products that leave a long imprint. "The best products for the real estate market ... leave a lasting impression," said Kor. "Something that is both useful and seen on a regular basis to create name recognition, like calendars and kitchenware."
"We are still doing annual calendars," confirmed Scotti. "In today's selling climate, what we are looking for in a promotional product is something that will last a long time when placed with a client."
Dan Kielman, vice president of sales for American Made Cutlery, Waverly, Iowa, agreed. "[Agents] see the power of having their name and logo permanently etched on the blade of a knife that is used several times a week and will still be used 20 years from now," he said.
After the longevity prerequisite is met for a promotional item, the next key factor in deciding which product to buy is its ability to increase face time with clients. "Products for the real estate market have expanded [beyond] name recognition to also [include] face recognition," Kors stated. "Agents are looking for promotional items that offer the ability to include their photo."
But everything comes down to the final and most important key element—price. "The items that were costlier are the things we've done away with across the board," said Scotti. "Lower cost items like postcards after a property sells are still being utilized and are still an important tool to generate interest. Another inexpensive item I love to leave behind after I show a house is a bookmark. It is a product that has lasting appeal," she said.
WHERE WE ARE GOING
"Pending home sales rose in February, potentially signaling a second surge of home sales in response to the home buyer tax credit. ..." - National Association of Realtors (NAR), April 5, 2010
The NAR reported that in February of this year, existing home sales hit 5.02 million units, 7 percent higher than last year. With data like this pointing to signs of recovery, Scotti was cautiously optimistic about the future health of the real estate market. "We are starting to see an upswing now," she said. "Growth will be relative to the individual markets served, but for most agents, I do believe the worst is over."
Regardless of how slowly or quickly markets pick up there is one thing that remains true: "No matter what is happening with the economy, people will always need a place to live and a means to buy and sell homes," Kors said.
While home sales may not return to the same levels they were at back in 2005 and 2006 any time soon, there will still be a volume of homes moving on the market. This is good news for distributors in this niche. Scotti believes promotional buying for agents will continue to be a necessity. "We may be doing more e-mail blasts these days to save on mailing costs, but there are certain core products, like calendars and magnets, that simply won't be done away with," she concluded.