re/max
And the market goes on and on and on…
It is amazing what a difference our real estate market has experienced this year versus the last few years. Previously we were inundated with short sales, foreclosures, dropping prices and very little confidence in the market.
Today, we are at a low point in the number of short sales and foreclosures on 
the market since I started keeping track of them over two and a half years ago. In October of 2010, we had 1,460 short sales on the market, today we have only 386. Additionally, foreclosures are at a low point as well. In November of 2010, we had 516 foreclosures on the market and today we only have 178. Additionally, prices were falling in the Northern Virginia area. According to RBIntel.com our market prices bottomed out in February of 2009 with an average sales price of $307,225. Today our average sales price is $469,800.
We are still off our highs of 2006-2007, but we are headed in the right direction. All of this information coupled with low interest rates has restored confidence in our market.
Rates? Did I just mention rates? Yes I did and they are ridiculous! Yesterday I heard one of our clients locked in a rate of 3.25% with a lender credit of 2%. We continue to see rates decline which leads to the question of how low can they go before more people act on refinancing or purchasing? Only time will tell.
The last area I would like to touch on is our rental market. The inventory of active rentals remains low and interest in these properties remains high. At this time, many people prefer to rent over buying as they remain skittish about buying or are in a situation such as a recent short sale which prohibits them from being able to purchase. This situation has resulted in rental rates rising making investing a viable option for many people – maybe even you!
If you would like more information on how these numbers affect you whether buying or selling a house, or if you would like to discuss becoming an investor, pick up the phone and give me a call. I would love to speak with you about your situation in more detail.
Are you the 20%?
Have fun and make a difference! That was the premise of the speech I heard today from Doug Smith, compliments of Leslie Wish, McLean Mortgage Group. If you’re not having fun at your job, then why are you doing it? That was his lead into discussing the Paredo Principle and how we, as Realtors, fit into the rule.
The Paredo Principle is the rule of 80/20. Twenty percent of the Realtors are doing 80% of the work. The 20% are defined as professionally persistent and instinctively insistent. We’ve heard it all before, but asked us what was the difference between those that are in the 20%? What are the 20% of Realtors doing that the 80% Realtors aren’t doing? And once you figure out what those tasks are, how can you do more of them to make your days more productive?
Doug has put those differences into his 5 C’s for Success and differentiation from the rest of the pack. These are the things that the 80% lack and the 20% excel at…
1. Confidence: How do you answer the question “how’s the market?” What do you do when you walk into a room of people you don’t know? Confidence is an ability that many of us lack, simply because we are afraid of making mistakes and looking bad. Instead of saying that the market is great and that the numbers are this and that, say “It’s remarkable, I’ve never seen anything like it!”
2. Contacts: The opposite of contact is reluctance. Reluctance can be to pick up the phone and make that call. The more contacts you have in your sphere, the more contracts you will write. So who’s in your contact zone? Business partners, family, friends, transaction partners such as home inspectors, etc. Don’t be afraid to tell your friends and family that they have a friend in real estate. Many agents think they shouldn’t reach out to their friends in case the transaction goes bad and results in losing that friendship. That all goes back to a lack of confidence.
3. Control: Control of your business, your time, your career, your clients. Agents who have a plan, a written plan, have more control over their business. Those that take it a step further by having a plan each day, a to-do list; have even more control over their business. Agents who control or “drive” the conversation when speaking with clients, maintain more control of the transaction and get the job done! Doug spoke about Sales Speak. Here’s an example of Sales Speak presented by those in the 80% and those in the 20%…
80%: Did you think you might want to see a few houses this weekend?
20%: Let’s go see 3 or 4 houses this weekend. What day is better for you, Saturday or Sunday?
Or
80%: So, you like the house? Ok, great, do you think that maybe you might want to make an offer on it?
20%: What do you think? You like it, great. Let’s make an offer.
The difference in the two shows that the 20% agent is steering the client to move forward with the transaction because that’s what they hired the agent for. They didn’t hire the agent to make their own decisions. They hired him/her to help them make the best decision based upon the needs/requirements they expressed to the agent for their new home. Think about that next time you are on the phone with a client. You might just find out that all this time you’ve been using speech associated with the 80% and it might be time for a change.
4. Consistency: Extraordinary people are not truly extraordinary; they just do it with ridiculous consistency! Those who are consistent see more results than those that do things from time to time. Doug mentioned 3 things you can do daily to generate 13-15 sales per year and add 1,440 contacts to your database per year and those are (1) handing out 1 business card a day, (2) use some form of correspondence 2 times per day either through email or snail mail, and (3) make 3 calls per day to anyone…past clients, lender, agent, friend, etc. The more you do things consistently, the more it becomes a habit and you will find yourself doing them instinctively while receiving more business.
5. Courage: Courage hides behind the things we fear the most. Courage is acting in the presence of fear. In cases such as these, we need to change our focus, take responsibility for ourselves and expect more of ourselves. We can do it and should remind ourselves everyday either through affirmations or changing your focus and mindset. It takes courage to do a lot of things, but once you start to do those things the easier they will become.
Doug ended the session with a great quote by Mary Kay-Ash, “Most people truly have no idea what they are capable of. It’s so much more than we think.” This rings true with the 20%. They have the 5 C’s, they have more sales, they know more people, they make more phone calls, and they work more hours than those in the 80%. Implementing the 5 C’s in your life will help you move (if you’re there) in to the 20%. Based upon the number of agents in the United States (965,000) and the projected number of transactions that will take place this year (4,400,000), agents in the 20% will average 18-19 sales this year. Wouldn’t you like to be in that top 20% of all Realtors in the United States? Stick to the 5 C’s and best of luck! Now go sell something!
A great time to buy…now?
It is definitely an interesting time in real estate in Northern Virginia. We have extremely low inventory levels that remain below normal for this time of year. As an example in January of 2008, we averaged 15,500 active listings, in 2009 it was 10,200, in the year of Snowmagedon in 2010 it was 4,800 because people took their houses off the market and agents couldn’t get out and about to list them, in 2011 it was 5,800 and now we are at 4,700. What is interesting to note is the month’s supply of houses in the same time frame – 2008 it was 10.8, 2009 4.0 and since then it has been 2.3 in 2010, 2.8 in 2011 and this year 2.2. What this clearly indicates is there are buyers out in the marketplace looking for homes in the winter months – not just the spring months now. Interest rates remain very low – below 4% for 30 year fixed rates – jobs are being created here so people are moving into the area and rental rates are rising throughout Northern Virginia.
If your family circumstances, job status, or you just have the desire to sell your house and move up to a bigger home, now is a great time to do so. Houses that are priced right, in the right condition and staged properly are attracting offers. One of the biggest parts of this equation is the price – price sells today. Sellers cannot price a little high for negotiations as we have seen that they languish on the market in this situation. Price it competitively and it will sell.
Buyers have a great opportunity today. The housing affordability index is at an all-time high and in many cases house payments are less than rental payments even before considering the tax benefits of home ownership. For buyers looking for the long term benefits of home ownership, there historically has not been a better time. Prices are remaining stable, interest rates are low, and the housing industry is on the rebound meaning we have already hit the bottom and we are on the upswing if you were trying to time the market.
Whatever your situation is, we can help. Please feel free to contact us to discuss your personal needs in more detail and see if now is the right time for you to make a move.
My Top 10 Predictions for 2012
Credit unions in real estate – if the merger between Pen Fed and Prudential Caruthers is successful – and only time will tell – more credit unions will look to enter the market. If the merger muddles along as it is now, other credit unions will remain on the sidelines. This one will be interesting to watch as NAR and RPAC spent so much time and money keeping banks out of the business.
The Presidential election – Nearly 1/3 of voters say how the candidates view housing will impact how they vote. The foreclosure crisis and 11 million people with negative equity are what concern so many Americans. Next to unemployment, the stance they take on housing will drive the election. Therefore, agents will need to get busy listing and selling houses the first half of the year as I see people going back to the sidelines after July to see who wins and what policy they will put in place for housing.
Interest rates – if they go higher, they will crush the fragile housing market which the Federal Reserve will not allow. Unlike last year’s prediction where I predicted rates to get to 6% and was wrong, this year I believe they will stay in the 4 – 5% range but closer to 4% than 5%. This is what will keep some people in the home buying mode.
New home sales locally will continue to rise. The shortage of resale properties available, the fact that 20% of our market is distressed and buyers are tired of the short sale process will continue to drive buyers to new homes. Price will continue to also play a role in the new home market. Builders will have to stay within reason and not price themselves out of the market.
Land values in our area will continue to rise. Fueled by lack of inventory and new home sales, land values will continue to increase. We are seeing new signs popping up on vacant land already.
Existing home Sales forecast will stay flat. Unemployment, the election, strict lending guidelines and the fallout from foreclosures will keep people at bay from jumping into home purchases.
Lending guidelines will stay strict and may get even stricter. As such, it will make our job as Realtors even more challenging. Both buyers and sellers need to choose a professional and only work with local lenders – not internet lenders.
Foreclosures in NOVA versus rest of USA – we will continue to see low levels of foreclosures in NOVA for the first 6 months of the year, at least. Notice of trustee sales are down in the papers, short sales make up less than 14% of our market and as such, foreclosures won’t be as prevalent. The rest of the country needs to be leery as unemployment and dropping values continue to put pressure on home owners and foreclosures will follow as a result.
Investor market and rents – as the inventory of houses shrink throughout Northern Virginia, people remaining leery of the housing market, and lending guidelines continue to tighten – our rental market will continue to be strong and rents will increase. The good ole supply and demand theory of economics. This will in turn bring more investors into the market.
Now you have my Top Ten Predictions for the real estate market in Northern Virginia. Let’s meet up again this time next year and see how I did! Get it? Got it? Good!
Now, go sell something!
Scott's Motivation and Real Estate Market Updates 