Market Segmentation
The term market segmentation is mostly used in marketing for assembling prospective buyers in groups based on their needs and their response to a marketing action. One definition of market segmentation is the market’s division into subsets of customers to simplify targeted branding and marketing strategies. When you know who you are trying to attract, you know what they are interested in, it’s easier to approach them.
What is Market Segmentation in Real Estate?
Real estate market segmentation allows real estate companies, investors, and brokers to target specific groups of buyers who would get the biggest benefit from a type of property. The purpose of market segmentation in real estate is to identify and target specific groups of buyers to offer them real estate that was tailored or branded precisely for their needs.
Market segmentation for real estate can be done based on different factors like the type of property (residential or commercial), demographics (millennials or baby boomers), geographical location (one city or state versus another). Based on the type of market segmentation applied and the reason for which it was applied, it can be used in different ways.
Examples of Real Estate Market Segmentation
Real estate agents use market segmentation to find their niche based on the types of buyers or sellers. They can also use it to improve their business depending on the client they work with, the buyer or the seller. Applying market segmentation to their strategy helps them improve their brand and communication towards their targeted audience.
Investors and real estate developers look at market segmentation to evaluate performances. For instance, during economic strife, some segments of the market might be more profitable than others. The commercial real estate market might not be as affected by an economic downturn as the residential market. Similarly, the rental market might drop while the homeowners market skyrockets. In some cities, single-family homes might be more profitable than high-rise apartment complexes or vice versa. Being able to determine this through market segmentation helps investors and developers supply a growing demand while also increasing their revenue.
Popular Real Estate Terms
(1) Mildly convex arch built into a load bearing beam, girder, or truss to counteract any load bearing stress placed on it. (2) Slight slope designed into a structure such as a drive4way or ...
The logical definition of both words is almost enough to understand what is earnest money. Money is a form of exchange between people to assert value to something and Earnest equals ...
Taken out on property to replace or repair it if it malfunctions. It covers parts and/or service. An example is a warranty a homeowner takes out on a stove, refrigerator, or dishwasher. It ...
Transfer of real estate from one taxpayer to another that are exempt from federal income taxes. An example is an exchange of property in which ownership of transferred real estate is still ...
The direction in which a community is growing. Directional growth is measured over time, and its path strongly influences current and future market values of those properties clearly in ...
A rectangular area bordered on all sides by buildings. Often, a quadrangle is grassy with decorative landscaping. A quadrangle can be found in a central business district or on the site ...
Easement with the objective of keeping scenic beauty or to forbid constructing something else blocking that view. The property is retained in its natural setting. ...
Also called negative leverage. The interest rate on the obligation exceeds the return rate on the real estate investment. As a result losses are magnified. ...
A fully amortized mortgage necessitating periodic payments of both interest and principal. In the early years of the loan, the share of principal is smaller and the interest larger, a ...
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