Amidst the discouraging outlook the national media is forecasting for the foreseeable future in the real estate industry, REALTORS® may find themselves looking at 2008 as a potentially unfruitful year. While the housing market IS undergoing a huge metamorphosis, the media scare may be unfounded. In reality, today’s market represents more of a balancing of the scale rather than a major slump. In a recent article posted in Broker Agent News, Roselind Hejl equated the current housing market to a “Back to the Future” for real estate. If anything, the real estate “gold rush” is subsiding, giving way to a more solid and stable future for sellers, buyers and those of us who make our profession in the real estate industry.
Reordering our thinking on the market outlook in 2008 can help us both strategize for the coming year, and also better meet the needs of our clients. A couple of key points to share with your prospects regarding changes in the industry could be:
The end or minimization of high risk financing that often ends in foreclosure or failure for the buyer.For the last few years, high risk financing meant almost anyone could purchase homes. By educating your buyers on the properties they can afford, based on financial history and income, you can help clients succeed at home ownership. Though the media has painted an overall grim picture, this is a buyer’s market. Serious buyers who are in the market for the long term, rather than those trying to make a quick profit, will find 2008 conditions to be prime. In a sense, the real estate market is returning to the form many of us remember from the past – to buy a house you will need a reasonable down payment, a solid income, and a stellar financial history. By showcasing listings to buyers on your website, you’ll be able to screen for the serious and qualified buyer.
Realistic home values balanced with the living wage. Across the nation there is a major decline in the value of homes; however, many local markets continue to thrive. Many areas that were under the radar during the housing boom are now thriving markets. Getting familiar with your market, and local economic conditions can be key to aiding buyers and sellers in your area. Employment rate, the influx or outflux of new industries, housing inventory and other local conditions are major factors in determining how to approach a selected market. Many markets that are experiencing a drop in home prices offer an opportunity to guide buyers to the perfect home at a less inflated price than seen in previous years. The coming year represents an opportunity for real estate professionals to showcase their worth as community and industry experts who are invaluable to the home buying and selling process.
Solid long term growth. The low barrier to entry posed by the sub prime mortgage industry in past years allowed many people to enter into home ownership for the short term. With new regulations hitting the industry, many of these purchasers find themselves ill equipped for the commitment of a 30-year mortgage. Buying a “home” should be a decision based on long-term considerations, and not solely on the hope of a quick profit. While in some areas property value may see a drop, over the next few years, prices will undoubtedly stabilize and grow at a reasonable rate, customary to the real estate market of the past. When advising both buyer and seller clients, keep long term considerations in mind, regarding both client goals and future market conditions.
In light of the above, the question becomes how to steady your ship and foster stable growth for you and your business. Today, real estate professionals who are proactive marketers and understand this industry requires motivation and ingenuity will succeed. Providing best in class service and advice that will help your customers achieve their goals and show that you really are an expert will make you indispensable to your clients.
Here are some quick tips to get you started for 2008:
- Don’t underestimate the listing appointment – Perfect your listing presentations. Show your seller clients you can get their property sold. Spotlight® Single Property websites can be created in minutes and can give you the edge with sellers. Also, advise them on the importance of a home’s curb appeal. Home improvements, fresh paint, and effective home staging also can help in a competitive market.
- Choose the right pricing model – Sellers can be unrealistic about proper home pricing. Follow your instincts and recommend a price that you feel is reasonable in the market. Build individual plans with your seller clients, and set goals based on their individual needs. For instance, if average homes in your market are selling in 6 months, factor the upkeep of the property, mortgage payments etc. and your client’s timeline into your plan. For example, a reduction in price may mean a faster sale, allowing your client to avoid the costs of maintaining the property over a longer period of time.
- Be proactive about your marketing. Stay active in community events, organizations, and network, network, network! Focus on quality leads, and spend your energy nurturing them rather than seeking them out. Employ up-to-date technology and online social networking to increase your productivity. A personal real estate website, online blogs and branding yourself on the Internet are just a few things that will help you stand out online as people turn to the Internet for real estate information.
While there is no doubt that hard times have fallen upon the real estate industry – staying motivated, and being clear with your clients about the state of their local market will allow you to paint a more accurate picture of the current real estate forecast in your locale.