While an improving job market and continuing low interest rates have sent consumer confidence soaring, and research tells us that pending home sales in all four major regions rose this spring, stubbornly tight inventory continues to stymie the market’s full potential. What can real estate professionals do to get more listings on the market? Find out in this month’s NAR Power Broker Roundtable, brought to you by the National Association of REALTORS® and Jim Imhoff, NAR’s Liaison for Large Residential Firms Relations.
Jim Imhoff, Chairman & CEO, First Weber Group, Madison, Wis.;
Liaison for Large Residential Firms Relations, NAR
Rei Mesa, President/CEO Berkshire Hathaway HomeServices Florida Realty, Miami, Fla.
Katie O. Williams, Executive Vice President, LIV Sotheby’s International Realty, Denver, Colo.
OB Jacobi, President, Windermere Real Estate, Seattle, Wash.
Jim Imhoff: An improving job market and continuing low interest rates have sent consumer confidence soaring more than 10 points over where it was a year ago. According to research from NAR, pending home sales in all four major regions rose this spring, and for the U.S. as a whole, pending sales are at their highest level in nine years—and the median sales price across the nation has risen by more than 8 percent in the last 12 months. All of that is good news. The fly in the ointment is the stubbornly tight inventory. What can real estate professionals do to get more listings on the market? Rei, what’s the situation in Florida?
Rei Mesa: In the first quarter of the year, we saw a 5.1-month supply of single-family homes, with an especially limited inventory in entry-level properties. We’ve created jobs here, but not higher-level jobs, and sellers are tending to stay put for a variety of reasons. They’ve got equity in their homes. They’ve refinanced to a comfortable interest rate—and they’re not sure they can find the home of their dreams or even that they will qualify. We are seeing a slight increase in listings this summer, but I think we are looking at tight inventory at least for the foreseeable future.
Katie Williams: In January of this year in Denver, we had 32,000 residential properties on the market. We now have 6,250. That’s a steep drop, a scant two-month supply; and while we’re seeing a slight uptick this summer, I tend to agree that this is going to be a long-term challenge.
OB Jacobi: We are really struggling for inventory in Seattle, and it’s been a three-year downslide. Rei mentioned jobs. We have jobs in Seattle—big companies like Amazon and Google are expanding—so lots of people are coming in, but there’s not enough inventory to house them. Small apartments are renting for $350 per square foot—penthouses for $450 per foot. So sellers are in the driver’s seat, and buyers are scrambling to compete. Of course that’s forcing prices up, and our sales are up 4 percent over last year. That is, as you say, the good news. But sales would be even better if we had more homes to sell, and I’m afraid we’re not looking for a major increase anytime soon.
JI: New construction is lagging behind demand as well—and so for all these reasons, our agents have to compete hard for listings. Most sellers know at least four REALTORS® who know that a house priced right will sell quickly at or above its listing price. So what are we doing to give our agents an edge in this highly competitive environment?
RM: Without question, it’s back to basics, and that means knocking on doors, leaving flyers, and calling everyone you know to promote your service and expertise. Talk to people. Want to move up? Need more space? Ready to downsize? I may have a buyer for your home.
KW:Sphere of influence is extremely important—and understanding that some people aren’t selling simply because they fear they won’t be able to buy. But we find our buyers are mostly willing to be flexible when they find the home they want—so we ask our agents to work from the buy. List a client’s home with a 60-90 day contingency so the seller has a little breathing room—and work with that seller to find the home they want to move to.
OBJ: Relationship-building is crucial if you’re going to successfully compete. We’re relying less on Internet leads these days and more on relationship selling strategies that help our agents build strong connections and inspire trust and loyalty—and, ultimately, more business in any market environment.
JI: So the old fashioned marketing techniques are more important than ever, especially while the market remains unbalanced.
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