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
The definition for the gross living area published by the Appraisal Institute’s Dictionary of Real Estate 4th Edition is: “The total area of finished, above-grade residential ...
In urban areas, one way to organize urban development is to keep track of building density. The building density definition is a way to determine the concentration of buildings in a given ...
All expenses related to maintaining and operating a household. These expenses include the cost of rent or mortgage payments, taxes, utilities, maintenance and structural improvements. The ...
Also called earnest money. Money deposited with an individual for security for the performance of some contract. This is intended to show his/her willingness to follow through with the ...
Apartment building in which each resident owns a percentage share of the corporation that owns the building. ...
Contract that intends to convey property form one individual to another but is defective in one respect. ...
Appraisal performed in accordance with the National Housing Act to determine the resale value of vacant or improved property in an urban area to be or under development. The renewal ...
Mutually binding property sales contract where the title remains with the seller until the purchase price is paid by the buyer. It is a contract to convey title in the future upon ...
Effective Age is the counterpart to a property’s Actual Age. While the former refers to the date a property was built, the latter is more of a sensorial depiction of its age; the age ...
Have a question or comment?
We're here to help.