State of the Housing Market, 2012: Good News

Confidence is up, rates are down, prices are increasing, pending sales are way up . . . I have to admit, it’s getting better, it’s getting better all the time (Lennon/McCartney).

NAR just released the slides their Chief Economist,  Lawrence Yun, used in his State of the Housing Market address at their mid-year meetings, May 14-19.  The 31 slide package is fascinating and DEEP, and you can view the entire thing HERE, but I want to reproduce six of the most powerful charts here on the Set Fee Blog.

First is the issue of affordability.  Housing is more affordable today than it’s been in years.  Really:  we’re talking pre-1970s affordability.

And, at the same time, mortgage interest rates are ridiculously LOW:

Note the projection of rising rates starting this year.  If history teaches us anything, this is good for housing sales.  In the past, slowly rising rates after a period of flatness pushed many fence sitters into the market, anxious to get the best rate before it’s gone.

This near tsunami of good news has contributed to a significant rise in REALTOR confdence:

It’s interesting to see the low point from July through October 2010.  That was the period immediately after the two housing stimulus tax credit programs.  As we all realized there would not be another similar program to bolster sales (and that the two we already had produced no long term benefit), we just got . . . depressed.  But by the end of 2011, our own economic Prozac had begun to kick in and now we’re nearly giddy.

Look what’s happened!  Pending contracts are rocketing upward at a magnificent pace!  We’re almost back to where we were at the beginning of 2007 when everything fell apart.

Pendings are nice, but mostly because they predict upcoming sales, and it’s sales that count.  Check out our Q1 2012 closed sales stat:

Breathe a sigh of relief:  it looks like steady recovery may be a reality.  But assuming no other catastrophy befalls us, there are still challenges in this improving market, notably in terms of inventory.  I can’t help crowing like a rooster, ‘I told you so! I told you so!’, but I did tell you we were looking at a housing shortage back in November and then in more detail in December.  That’s when the media was still sqwaking about how bad things were going to get when the mysterious ‘shadow inventory’ hit the market.  I am still not sure I believe in the shadow inventory, but it remains a topic of conversation.  Even Dr. Yun has a slide showing the continued rise in the numbers of homeowners 90 days or more late on their payments and/or in the foreclosure process.  I didn’t include that slide in my magnificent Six, but here is the state of new and resale inventory:

New homes for sale have been at a numbing flat line since 2009 and we’re getting back to 2006 levels on existing homes.  This one fact, coupled with the preceeding five slides tells me something very important:  if you have any notion about buying a home, you’d better get busy NOW.  Everything is picking up (including prices), rates are better than they will ever be, and the pool of houses to choose from is shrinking.  Be ready to bid against other buyers on your dream home:  I’m hearing more and more about multiple offers on good properties.  Don’t let that discourage you – the deals are still abundant – but if you snooze now, you’re probably going to lose.

Once again, if you’re interested in Dr. Yun’s full package of 31 slides, you can view it here.

How Do You Present Your Pricing Today?

Here is a blast from the past . . . well, from six months ago. I just re-read it and it occurred to me it’s an important message for right now. Please give this a little consideration, Help-U-Sell folks.

Help-U-Sell is certainly NOT a For Sale By Owner company.  Yes, it’s true:  in the late 70’s Don Taylor pioneered the use of the phrase ‘For Sale By Owner’ on the Help-U-Sell For Sale sign.  In time, that phrase morphed to ‘For Sale With Owner,’ but the intent was never for Help-U-Sell to be a stripped down FSBO package vendor.  Our vision has never wavered from the notion that Help-U-Sell is a full service real estate company.

Having said that (and fully embraced it without reservation), I think it might make sense to examine our Consumer offer – the one to Sellers, specifically – and how we present it.

Pictured below is the graphic that is often used with sellers as we talk with them about putting their home on the market.  It acknowledges that there are really three ways a home might sell and prepares the seller for the good news that we charge them, not on some arbitrary percentage basis (no matter how the house sells), but on a logical pricing model that varies depending on how it sells.  This chart forms the real heart and soul of most Help-U-Sell listing consultations.

*Note:  the savings in this example are versus an ordinary broker charging, say, 6% commision on a $300,000 home.

We use the first option, the ‘You Show’ option to talk about seller involvement in the sale process through holding open houses, showing prospective buyers through and talking the listing up at work and in the neighborhood.  If they procure their own buyer in this way, then the Low Set Fee is all they pay; which means  maximum savings.

The second option, ‘We Show,’ is the place where we introduce the idea that one of the Buyer Agents in our own office may be working with a buyer for whom the home might be perfect.  If the seller opts we can include this option as well. (Notice, in this example, the broker charges a set fee on the showing side too and it’s equal to the listing set fee.  There are variations out there, but let’s remember: we are a set fee real estate company.  Shouldn’t the showing fee also be a set fee?)

Finally, option three has us putting the listing in MLS and having the seller be prepared to compensate an outside company and agent should they have a buyer and affect a sale.

Regardless of which options are selected at the time of listing, the seller will always pay based on how the house actually sells.  Even if we put it in MLS, if the seller ultimately finds his or her buyer, all they pay is the option one price: the Low Set Fee of $3,950 in the example.

There was a time when many sellers opted for  option one or one and two, choosing to stay out of MLS all together, thereby ensuring a large savings.  With the downturn in the market, however, this has become a rarity.  Most sellers, with the advice of their Help-U-Sell brokers, want to pull out all the stops when it comes to initial marketing and so go into MLS from day one.

All of this brings me back to option one.  I think it might be helpful to remember that a whole lot of marketing  happens in that option:

  1. A proper price is recommended.  Any truthful agent will admit that 75% of marketing is done the night the home is placed on the market, when the seller chooses a price.  Properly priced homes, marketed well, sell. Period.  Improperly priced homes don’t sell, regardless of how much marketing is done.   That simple Low Set Fee option comes with the credible advice of a knowledgable expert (you) on matters of pricing, terms,  fixing up, showing procedures and a multitude of others things.
  2. The brilliantly beautiful RED Help-U-Sell for sale sign is installed in the yard.
  3. Flyers on the property are created and made available inside the house and out.
  4. Directional Signs, Open House Signs, Sign-in Registers and other tools for holding an effective Open House are given to the seller along with expert coaching on how to hold a effective Open House event.
  5. The Buyer Agents in the office are briefed on the home so that they can talk intelligently about it when inquiries come into the office and do so in such a way that caller interest is maintained, even heightened.  And what do we do with these inquiries?  If the only option the seller has chosen is option one, we send them directly to the seller for showing.
  6. Dozens of photos and a virtual tour are created for the listing so that potential buyers can see it in its best light when deciding whether to proceed with a showing.
  7. The listing is input into www.helpusell.com and is available there for prospective buyers all over the world.  In addition, once on helpusell.com, the listing is syndicated out to dozens of other consumer oriented real estate websites for maximum web exposure.
  8. A QR Code for the listing is generated and made available for use on flyers and on the For Sale sign so SmartPhone enabled buyers can get the information they want, when they want it.
  9. A knowledgeable expert (again, you) is available to help with questions and concerns, to write any purchase agreement and to handle all the details of transactions processing and coordination all the way to and through a successful closing.
  10. And more . . . meaning that every office has other things they may do on an option one only listing.

Look at that list!  That’s a lot of stuff! And you know what?  That may be enough to affect a sale even in today’s tough market, a sale that could yield a very happy seller who saved thousands!

I’m not suggesting you abandon the MLS (although I am looking forward to the next generation MLS – the one that is not connected to your Board of Realtors and whose policies don’t restrict your business).  However, I’ll go back to what I said earlier:

A properly priced listing, marketed well, will sell.  Period.  And that applies no matter what the market realities.

Maybe it’s time to start offering this option more vigorously to our equity sellers who are willing to price right and are interested in saving maximum dollars.  It’s hardly ‘For Sale By Owner.’  It’s full of good marketing and advice.  And remember:  there is a direct coorelation between seller savings and seller delight; between seller delight and word-of-mouth advertising; between word-of-mouth advertising and the growth of your business.

 

 

 

 

 

What I Learned About Twitter At Agent Reboot

From Katie Lance:

Twitter is about AMPLIFICATION. Used properly, it amplifies your message, your reputation and your visibility. The question is: what does ‘used properly’ mean?

It means, first, connecting with the right people. If you are in real estate, that’s a pretty localized business. How do you connect with local people?

    Sign into your Twitter account
    Go to search.twitter.com
    Click on ‘Advanced Search’
    Next to ‘Places’ put your town or target market name
    Experiment with the other search parameters

As you scan through your results, identify people who interest you (Persons Of Interest?) or who might be interested in what you might share. FOLLOW THEM. You’ll find that many will reciprocate by following you. And, oh, by the way, why not start following everyone who follows you?

So, you’re building your network on Twitter, creating a long list of people, mostly in your local market who will receive your tweets. What’s next?

Tweet Value. By that I mean make certain your tweets are short, relevant, interesting. Don’t overtweet and don’t constantly tweet. Tweet Value.

Maybe the best way to communicate what ‘Tweet Value’ means is by reproducing Katie’s list of Twitter ‘Don’ts’:

    Irrelevant and stupid content
    Tweeting listings
    Constant self promotion
    Spam
    Automatic responder messages (turn it off)
    Not responding to messages

Now, let’s talk about your Twitter Profile. You have exactly 140 characters in your Profile to describe who you are and what you do. Spend a little time on this. You want the people who view your profile to see you as someone who will ‘Tweet Value’, not junk. Something like:

‘Selling the Downtown San Diego Lifestyle for 17 years. Cyclist, Kayak-er and Dad to my kids. My wife rocks!’

That’s an active guy who loves his family and has a depth of experience in my geography. Probably worth following.

Finally: Twitter can be chaotic. Heck with ‘can’ – it IS chaotic. It screams for organization. Check out:

Hootsuite.com or Tweetdeck.com

Either of these apps can help you organize your Twitter experience into something manageable.

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