Market Focus: New Homeowners
Predicted to Spend
The past few years have seen a dramatic rise in home buying and new home constructions. According to the National Association of Realtors, 2003 was the biggest year for home sales in history.
One of the best predictors of consumers’ intent to buy goods and services is a lifestyle change, such as a move to a new home. This is a time when people not only are likely to buy, but they must buy.
“When [consumers] move into a new home, they purchase everything under the sun. It is the best time to reach potential new customers,” says Sylvia Hamilton, director of new leads at Walter Karl, a division of infoUSA. “New homeowners spend an average of $10,000 to $12,000 in the first 12 months in their new home.”
Because 17 percent of the population moves every year, notes Dave Thornbury, COO, CPC Associates, local merchants and service providers lose 17 percent of their business a year. To maintain and grow their businesses, marketers need to reach people who are new to the area.
New Homeowners vs. New Movers
New mover files often include both homeowners and renters. It is important that you differentiate between the two. Not only are the demographics different, but a homeowner may require products and services that would be of little value to a renter.
While new homeowners make up approximately 30 percent of the new mover market, they are more likely to establish roots in the community. Homeowners tend to be slightly older than renters, with a median age of 40. Approximately 68 percent of new homeowners have an average income of $40,000 or more, and 61 percent are college educated, according to the National Association of Realtors.
They also have good credit because they likely have been approved for a mortgage, and, if so, have gone through a stringent credit screening, points out Deborah Henriksen, senior marketing specialist at Welcome Wagon, a database marketing company dedicated to introducing new homeowners to local merchants and suppliers. Welcome Wagon packages include a telephone directory containing the names and addresses of local businesses as well as coupons and inserts for both local and national advertisers. The Welcome Wagon new homeowner list is managed by its sister company, GETKO Direct Response.