We are only several months into 2013, and we are already seeing some major market changes. In the following Q & A, J. Lennox Scott, CEO and Chairman of John L. Scott Real Estate, will let us know what we can expect this year, and how we can work with the new market changes to achieve maximum success.
Maria Patterson: What will be the most significant difference between 2012 and 2013?
Lennox Scott: I believe the market will continue to intensify, meaning buyer confidence will continue to increase, and at the same time, we will have a continued shortage of inventory. It’s a continuation of the foundation set in 2012 of the market shifting back toward a seller’s market. This will definitely continue in 2013 where we expect the majority of sales activity taking place in multiple-offer markets. Prices are going to continue to rise and we’re going to continue to see an inventory shortage. At the same time, the local homebuyers have come back into the market—the residential investor. With the feds buying mortgage backed securities to keep interest rates low, it’s created this historic market condition where the economy is rebounding, interest rates are low, and we’re still seeing adjusted lower prices. Prices were coming off the bottom in 2012 and will continue to mature upwards in 2013.
MP: How have you adjusted your operations model for this year?
LS: We’ve repositioned the company for this improving market. Over the last five years, we’ve repositioned the company for the next 5–10 years ahead, understanding that real estate goes in 10-year cycles. We’re expanding our sales force again and recruiting. Productivity has skyrocketed for current associates. Business has gone up with 35 percent fewer brokers in the market. For the veteran agents who stayed the course and put in double efforts, they are now being rewarded.
MP: What will be the most significant driver of business growth in 2013?
LS: We have a mature investor market for residential real estate that will continue. They’re competing with first-time buyers and transferees moving in. Residential investors have helped transition the market—they’re mature, they’re ready to move, the numbers pencil out for positive cash flow. On top of that, we have the local homebuyers that are confident that prices have bottomed out and that they can now move forward. They’ve been waiting five years or longer to act and life events take place and they’re ready to move into the next phase of their lives.
MP: What is the consumer mindset for the year ahead?
LS: It will be very positive, especially in those areas where there is job growth. The economic vitality that’s taking place, the job security, the optimism in the market—these are all very positive things. It seems like every sector is positive.
MP: What product or service—technology or otherwise—stands to become your greatest asset this year?
LS: It’s all about mobile apps. Everything is mobile and everything is video. There has been a huge paradigm shift in terms of the delivery of information. There are more minutes spent on mobile than at our desktops. We really raised up and invested heavily in our mobile apps. They are branded for each individual broker associate, which follows what we’ve done in desktop. It’s all about creating a credible relationship with today’s buyers and sellers.
For more information, visit www.johnlscott.com.