Updates from August, 2012
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By Pete Bakel
Housing market confidence among Americans continues to trend in a positive direction despite stalling optimism about the economy and personal finances, according to results from Fannie Mae’s June 2012 National Housing Survey. Results indicate flattening economic trends may be contributing to waning consumer expectations about their personal financial situation. Nevertheless, Americans’ continued positive sentiment about housing appears to remain buoyed by low house prices and interest rates at historically low levels.
“While consumers remain cautious about the general economy, their attitudes toward the housing market continue to improve,” says Doug Duncan, senior vice president and chief economist of Fannie Mae. “Although this positive trend may be short-lived if the general economy falters, one might ask whether consumers are increasingly seeing the current environment as a unique opportunity to buy a home while home prices remain depressed, rental costs are increasing, and interest rates are near historic lows.” Print This Post
by The KCM Crew on January 3, 2012
1. Buyers Will Return
In 2011, a lack of consumer confidence in the overall economy dramatically impacted the housing market. Buyers were afraid to make a purchasing decision on any big ticket item. By the end of 2011, consumer confidence began to return and sales increased. Economic conditions will continue to improve throughout 2012 and consumer sentiment will solidify. Once that happens, home buyers will realize that now is the time to buy.
2. Foreclosures Will Increase
The ‘shadow inventory’ of foreclosures which has been growing since the robo-signing challenges of late 2010 will finally be introduced to the market. Distressed properties sell at discounted prices. They will impact the housing values of the non-distressed homes in the area.
3. Prices Will Soften
As more and more foreclosures come to market, there will be greater downward pressure on the values of houses in the region. Foreclosures impact values of non-distressed properties in two ways:
- They will eat up some of the buyer demand in the market.
- They will impact the appraisal on ALL transactions in the area.
An increase in foreclosures will have a negative impact on values. This will cause more homes to be underwater.
4. Short Sales Will Increase
As mentioned above, we strongly believe that home prices will soften through at least the first half of 2012. Falling prices will force more homeowners into a position of negative equity. Negative equity is one of the triggers that cause people to strategically default on their mortgage obligations. If this happens, there could be an increase in the number of foreclosures. However, we predict that banks will take preventative measures which will help many of these homes avoid foreclosure by easing the requirements in the short sale process for both homeowners and real estate professionals.
5. Great Agents Will Be VERY Successful
Real Estate professionals who have invested the money, time and energy to truly understand what is happening and why it is happening will separate themselves from their competition and do very well this year.
Those who take that next step of learning how to simply and effectively communicate the market to their clients will be seen as industry leaders. These experts will dominate their markets.
This blog will help you with the what and the why. If you are looking for help with how to communicate this information to clients and customers, go here. Print This Post
December 9, 2011
Most agents are well versed in the local information and news that affect their neighborhoods. But, the national stats and over-simplified headlines make it hard to keep up with what’s really happening in the big picture.
Here are a few key indicators and some expert advice on what they mean for today’s markets from Trulia’s Chief Economist Jed Kolko.
Unemployment among 25-34 year-olds & future housing demand
Many life changes happen for young adults between the ages 25 and 34 that affect housing. From developing careers to making decisions about marriage and households, Jed Kolko, Trulia’s Chief Economist says, “A key measure for housing demand and homeownership is the unemployment rate for this group and the share of this age group that is employed.“
In a recent post on Trulia’s Insights Blog, Kolko offered a great example of how Unemployment for this age group has affected home sales:
“During and after the recession, household formation dropped for this age group, and more of them than ever are living with parents or other adults rather than renting or owning their own place. These folks will wait to form their own households and consider homeownership only when their job prospects improve.”
Local construction activity & spending
You don’t have to be an economist to understand the impact of shifts in housing supply and demand. The more supply of a certain item exists, then each individual item is less valuable to buyers. For example, if there is only one Nintendo Wii left on the shelves, people would be willing to pay more to have it versus if there were hundreds available. That’s why Kolko says it’s important to watch your local construction trends:
“New construction activity is a good cue to what’s going to happen in your local market: more new construction today will mean more inventory for buyers or renters — and more competition among sellers or landlords — in the near future.”
Those effects clearly relate to prices, but construction starts don’t just mean increased inventory but they also have a spending effect. Kolko says, “New construction puts more money in the hands of workers – and their incomes will kick-start spending that will boost demand for housing.”
Vacancy rates and price changes
Most agents know, vacancy rates mean housing supply. Smart agents know these vacancies affect home prices. But, by how much?
Kolko says, “The effect of vacancies on nearby home prices is strong: one academic study estimates that a vacant home can lower the price of nearby homes within 500 feet by as little as 0.7% and as much as 10% — depending on whether the vacant home is a foreclosure or just neglected.”
When you see the housing statistics, whether national or local, remember that the story and the effects are often deeper than simple numbers. To get updates on the latest housing statistics and explanations you can understand, check out more from Jed Kolko on Trulia’s Insights Blog.
About the author
Jovan Hackley is part of Trulia’s Industry Education team helping agents and brokers build their businesses. Print This Post
RISMEDIA, December 22, 2010—It’s that time of year again. With the dropping of the disco ball on New Year’s Eve come predictions for the New Year. Melanie Attia, e-mail marketing expert and product manager for Campaigner, a leading e-mail marketing service provider, believes businesses and consumers will be interested in watching the following trends in 2011.
1. Social media and e-mail. Integrating your social media and e-mail marketing efforts will continue to grow in importance. It’s been reported that e-mail campaigns that include social media lift success rates by 20%. Quite simply, 2011 will be the year social media extends the reach of our e-mail messages to networks of influencers who ‘share’ your content, endorsing you to their network of friends, compelling them to subscribe to your list, and opening up new sales channels in this modern version of a word-of-mouth campaign. It’s up to you to ‘be everywhere,’ on every social network, which leads us to number two on our list.
2. Corporate social identity control. Start by searching for your company name or organization online. What do you find? Make sure you secure a Facebook fan page for your business. After all, they’re free and all the cool kids are doing it. While you’re at it, head on over to LinkedIn, another great place to aggregate your contacts and get endorsements from those you’ve done business with.
3. QR codes. The younger and more talented sibling of the lowly bar code, the QR code rose to prominence in 2010, popping up in supermarkets, magazines, and even on signage such as bus stops. Read through the lens of a smartphone camera, QR codes lead those who can’t help but scan them to Web pages, giving you another way to help you grow your subscriber list, or to give your recipients a way to redeem a discount, be it online or in store.
For more information, visit http://www.campaigner.com. Print This Post
NOTICE: In an effort to better the offerings of KCM, this free monthly newsletter will now focus on what each real estate professional needs to be doing right now in order to stay ahead. Each month we will give you 5 Quick Tips to help you achieve success in your market, as well as some inspirational words to keep you going. Therefore, we have decided to rename it KCM Quick Tips. If you are looking for more news-related articles, hop on over to The KCM Blog, and if you’re interested in seeing more visuals that you can share with your clients, discover the benefits of a KCM membership.
1. We must make sure we have our pricing presentations down pat.
Pricing will be a major issue over the next 4-5 months. NAR has just reported that, in the third quarter, prices have fallen in more than half of the country. Most experts agree that prices will continue to soften until at least the middle of 2011. You will need great pricing visuals and dialogue for your listing and price correction appointments. Pricing will also be an issue whenever an offer is being negotiated. Be prepared to discuss the issue with both sellers and their listing agents.
In the next several issues of Keeping Current MattersTM (KCM) we will arm subscribers with at least 5 visuals a month on the pricing component of their presentations. That is how important we believe this issue will be to an agent’s success in 2011.
2. We must make sure we are working FSBOs and Expired Listings.
Please do not assume that the FSBOs that have not sold or that the expired listings are not worth your prospecting efforts. In almost every case, improper pricing will have been the issue. Will a percentage just not be motivated? Of course. However, there will also be a percentage that just didn’t understand how to price the house properly. Remember, good agents can deliver good news but only great agents can deliver tough news. In today’s market, pricing has become a tough discussion. Many of those expired listings weren’t lucky enough to have a great agent. Be that great agent for them. Contact them and set an appointment to discuss how you can help them understand the current market.
If you need help finding and contacting FSBOs and Expireds, take a look at RedX* (http://www.theredx.com). They are a great asset to any agent who has determined to make these two categories a part of their 2011 income.
*We receive absolutely no benefit either financially or otherwise if you subscribe. We just want to pass along a service some agents have been asking about, we have checked out, and believe can help you.
3. We must read NAR’s 2010 Profile of Home Buyers and SellersIt’s free and jam-packed with great information. Why is newspaper advertising no longer significant when marketing a home? Are industry web sites more powerful than private listing sites? How many agents does a seller interview before listing their home? Don’t miss this fabulous piece from NAR.
You can download it at http://www.realtor.org (sorry, a direct link is not available)
In December, we plan to break down the best of the report into useful graphs and charts for easy use by subscribers of KCM. As always, it will be ready for download no later than the 10th of the month.
4. We must ‘work’ every holiday party.Be very visible and vocal this holiday season. When attending parties and family get-togethers, remember people will look to you to explain how the housing industry is doing. Be proactive in helping people see the tremendous opportunities in this market.
Not sure what those opportunities are? Spend some time on The KCM Blog (http://www.KCMblog.com) for some ideas. It’s free!
5. We must be prepared to ‘snap back’ the first week of January.Don’t be one of those agents who spends the first two weeks of January ‘getting ready’ to do business. Get your presentations, marketing programs and prospecting plans organized in December. That way you hit the ground running as the New Year begins. That head start will pay dividends for months. Jump out in front in order to stay out in front throughout the year!!
If the KCM Crew can ever do anything to assist you in achieving your goals, please contact us!! Print This Post
By Ken Trepeta
RISMEDIA, December 8, 2010—The National Association of REALTORS® (NAR) has been working closely with the members and staffs of the House Financial Services Committee and the Senate Banking Committee to ensure that Wall Street Reform legislation did not adversely affect REALTORS®. Below is a summary of the most important actions NAR took on key issues and steps that NAR is currently taking to address outstanding items. (More …) Print This Post
By Chris Bibey
RISMEDIA, November 18, 2010—Are you worried that your direct mail campaign is stalling? Even though changes may be in store, you are probably closer to success than you ever imagined possible. By following the five tips below, you can save your direct mail campaign from disaster, and subsequently use this marketing strategy to increase sales and profits.
1. Be consistent. As a real estate agent, you should realize how important it is to be consistent with your marketing efforts. Direct mail is not something you should use one month, forget about the next, and consider again in the future. Instead, get on a schedule, regardless of what type of mail you are sending, and stick to it.
2. Hire a professional. Even though you may enjoy doing some things on your own, when it comes to marketing your services with direct mail, it is essential that you hire professional assistance. This is a good idea for two reasons: 1. A professional can customize a campaign to suit your exact needs based on their past experience and success. 2. Your job is to help people buy and sell homes. The less time you spend on marketing related tasks, the more time you have for client interaction.
3. Think outside the box. Every day, consumers across the country receive loads of junk mail. If you don’t do something to stand out, your mail has a very good chance of getting lost in the shuffle. Maybe you should send a sales letter or brochure if other agents in your area are only utilizing post cards. Or maybe you should opt for a post card that is unique in its design and presentation. No matter what, it is important that your direct mail stands out.
4. Stay organized. Your marketing efforts need to be well organized, regardless of who is in charge and how many pieces you are sending. Do you know where your mailing list is located? Do you know which people on your list are past customers and which ones are prospects? Organization goes together hand-in-hand with tip number one above. When you are organized it is much easier to be consistent with your strategy.
5. Track your results. Are you getting better results from post cards or sales letters? How much money are you spending on each campaign? Are you losing money, breaking even, or coming out on top? These are the types of questions that you should be able to answer. Once you know which type of campaign is working best, you can then focus your time and money in the right place.
By implementing these five tips, you should notice an improvement in the overall success and efficiency of your direct mail strategy. Print This Post
by The KCM Crew on November 16, 2010 ·
It is amazing how masses of people can believe something that is absolutely untrue. The greatest example of this is that at one time the vast majority of people believed the world to be flat. Today, we want to debunk another commonly held belief – that newspapers sell houses. Somehow this notion gained believability even though the facts consistently prove it to not be true.
We should know what methods perspective purchasers use to find the home of their dreams when we are selling our house. That would enable us to develop the best marketing strategy to attract a buyer. The National Association of Realtors (NAR) has just released the 2010 Profile of Home Buyers and Sellers*. This report is recognized by most as the best compilation of data on today’s buyers and sellers because of the enormous amount of data available at NAR’s fingertips.
Let’s look at the actual search habits of today’s buyers as reported by NAR:
It might interest everyone to know that less than 2% looked in newspapers, magazines or home buying guides when starting the search process. What do most buyers do?
We can see that buyers today want to explore their options online (combined 47%) or check with industry professionals (combined 27%). You might be ready to argue that the use of the internet is a new phenomenon over the past year or so. However, the report looks back over the last nine years. Though it is true that the percentage of those using the internet has dramatically increased (from 8% to 37%), it might interest you to find out that even back in 2001 only 9% of buyers found their home through print media (again, that number is now 2%).
If you want to develop a great marketing strategy to give your house maximum exposure, forget newspapers and look toward the internet. Where on the internet? The NAR report breaks down the most searched web sites this way:
The buyer is attracted to the type of sites that have the greatest number of listings. These sites are normally generated by the real estate industry. You should make sure your home is on as many of these sites as possible. That will give you the best chance of attracting your buyer.
Print media never was a great way to market a house for sale and its effectiveness is diminishing each year. Meet with a local real estate professional and put together an internet marketing strategy worthy of your home. Print This Post
By Wendy Lowe
RISMEDIA, July 26, 2010—Mention e-mail marketing to real estate agents and you may find that many are still hesitant to move away from their tried-and-true snail mail methods. Others, however, are rapidly discovering that e-mail marketing is just about one of the most effective means of generating sales.
Want proof? When Shop.org surveyed retailers for their State of Retailing Online 2009 report, they found that e-mail was the most-mentioned successful tactic overall. The Ad Effectiveness Survey commissioned by Forbes Media in February/March 2009 placed e-mail marketing second only to SEO for generating conversions. And, research conducted in 2009 by the Direct Marketing Association (DMA) demonstrated that e-mail out-performs all other forms of direct marketing.
The bigger question, of course, is why? Out of all the hundreds or even thousands of messages consumers are exposed to each day, why is e-mail marketing so effective?
There are several reasons, and real estate agents who embrace these principles will quickly find themselves joining in the chorus of praise. (More …)