by Jennie Norris, President & CEO, Stagedhomes, IAHSP Chairwoman, CEO, Sensational Home Staging
2023 has been an interesting year of adjustments in the real estate industry with rising interest rates, AI Technology and legal judgments hitting the real estate industry hard. What will this mean for the Home Staging Industry that is so closely tied to real estate?
First, if you are in the Staging industry you are IN the REAL ESTATE industry – as the reason home staging exists is to help properties sell faster and for more than the marketed non-staged competition. We are closely tied to the ups and downs of that market, and we BENEFIT from slower times in the real estate market as Sellers understand they need to do MORE to get sold. But what about all the other issues plaguing the industry right now?
Rising Interest Rates: Higher interest rates means less affordability for buyers who are paying MORE for a mortgage than they did 2 years ago. WHY the rates increase is our government’s attempt to slow inflation, and raising interest rates has traditionally been the way they manipulate growth. Many buyers and sellers managed to take advantage of historically low interest rates, and now are unable or unwilling to move because if they have to get a loan, they will be paying much more for less of a property – a loan at 1% on a $500K property is far less than 7% on a $500K property where you can use a calculator tool to see the payments are doubled (Mortgage Calculator). This means a buyer who could afford a $500K home at 1% can only afford a $250K house at 7%. Loan programs are in place to help mitigate some of this impact and ultimately, BUYERS that are out there are either CASH buyers or buyers who really want to buy a home, they are serious buyers. SELLERS are one that HAVE to sell. This means they must use EVERY TOOL available to get a buyer – and STAGING is one of those Key Tools.
The TOP 5 reasons people MUST sell:
- Death
- Divorce
- Distress Financially
- Job Change/Relocation
- Downsizing
Of these 5 reasons, only 1 – Downsizing – is optional. The other 4 put Sellers in a position where they MUST sell a property in order to get out from the situation they are in. As a market gets tougher – due to interest rates – Staging becomes MORE necessary. Real Estate agents need to target these scenarios and the people/companies that are involved – Attorneys, Lenders, Companies who move employees around etc.
NAR Judgment: The recent lawsuits involving multiple large real estate brokerages has sent ripples of concern through the industry. The lawsuits involve how Buyer Agents are paid for their role in the sale of a property, where traditionally the Seller paid the commission for both the Listing Agent AND the Buyer Agent. Ironically the people who initiated the lawsuit purchased homes and did not pay out commission to their Buyer Agent – they benefitted from the system about which they are now complaining. The impact will be felt among the real estate professionals that represent Buyers, whose commission is now up to them to negotiate and/or up to the Seller to accept in order to sell their property. It will be felt by Buyers who may be burdened with paying for their agent’s commission when they are already stretched to come up with a cash down-payment. Right now, the law does not allow a Buyer to finance agent fees as part of the purchase. There is little to no impact to the Staging industry – meaning we are not part of that aspect of real estate.
Personalization and AI PIRATES: AI Tech is both fascinating and frightening. The ability to change appearances, manipulate voice technology and create a view of the world that is not based in reality is like something we saw in science fiction movies – and yet the tech is here! The WRITING industry has suffered the MOST with AI – people can write books on any number of topics, never having been an expert or successful in that field.
We have seen this within our own industry with those trying to profit off stagers who want education, and are selling programs and books NOT BASED ON REALITY or REAL PERSONAL SUCCESS – and this is scary. When it comes to LEARNING – always look at the background of the person behind a course or book – and if they PERSONALLY have not operated a SUCCESSFUL Staging business – run away from that person. They are USING you to make a buck – their ONLY intent is to profit off the industry – not to truly help you succeed.
These AI PIRATES are also likely plagiarizing the qualified content that others who ARE QUALIFIED to write courses and books – have shared online. The AI Robots scrape the internet for relevant content – and the words and ideas of those who have contributed to that content are being USED without permission.
Advanced AI algorithms: AI Tech could be used to analyze a potential buyer’s preferences and tailor the staging to their specific tastes. This level of personalization could help potential buyers connect with the space on a deeper level. Understanding Buyer Demographics is crucial for a Staging professional. Courses like the “Buyer Trends Specialist – BTS Course offered from IAHSP.com is a way to learn the comprehensive information surrounding demographics, who buys what and why, trends for interior and exteriors of properties, and much more.
Continued Importance of Physical Staging: Despite technological advancements, there will continue to be a demand for physical home staging. The tactile experience of walking through a well-staged home can still have a significant impact on potential buyers. Buyers purchase on EMOTION when they are buying a HOME. Those who are looking for investment properties or 2nd, 3rd, 4th home – may not have the same emotional needs, however those buyers comprise a very small portion of the buying population.
Remote Staging: With the rise of remote work and communication tools, it’s possible that more home staging professionals could offer their services remotely. This could involve working with clients to stage their homes using digital tools, without needing to physically visit the property.
Sustainability and Eco-Friendly Staging: As environmental consciousness grows, there might be an increased demand for eco-friendly and sustainable staging options. Stagers could focus on using recycled materials, energy-efficient lighting, and sustainable furniture to appeal to environmentally conscious buyers.
Cultural and Demographic Tailoring: Staging that takes into account the cultural and demographic backgrounds of potential buyers could become more prevalent. This could involve incorporating design elements and decor that resonate with specific groups of buyers.
Emphasis on Online Presence: As online listings and virtual tours become more critical in the real estate market, staging for online photography and virtual tours could become a specialized niche within the industry. Some stagers already provide this service – and DIVERSIFYING your range of services and helping agents coordinate next steps to get a property ready could make you the CHOSEN ONE over your competition. You don’t have to personally provide the service – just find qualified companies in your area and be the coordinator so the agent does not have to be. You are giving TIME back to your Agents.
Collaboration with Real Estate Technology: The home staging industry might integrate more closely with real estate technology platforms, offering bundled services that enhance the overall buying and selling experience.
Virtual Reality (VR) and Augmented Reality (AR): The integration of VR and AR technologies could revolutionize the way home staging is done. Virtual staging using these technologies can allow potential buyers to virtually “walk through” and visualize the space with different furniture and decor, enhancing their understanding of the property’s potential. Virtual staging has been PROVEN to backfire as Buyers feel duped over the misrepresentation of the space and are not able to visualize the property that is empty in reality – as their home.
Stagers can use this tech to virtually stage secondary areas not being staged for real, taking that business from AI photo shop people who are not pro-Stagers. This tech is also useful for new-builds or investor properties that need a rendering for planning purposes and visualization of the ultimate finished product. As a sales tool – it is not recommended. As a visual tool for planning, it is great tech.
Remember that the future is unpredictable, and the direction the home staging industry takes will depend on a variety of factors, including technology advancements, consumer preferences, economic conditions, and more. The key is to stay informed about industry trends and adapt accordingly.