Scott MacDonald
Summertime market…it’s gonna be fun!
The spring real estate market is hopping along as we enter the summertime “fun in the sun” buying and selling season. Our inventory levels remain very low for this time of year – we actually have seen inventory levels on the decline in recent weeks. Multiple contract situations are more the norm than the anomaly, which can be frustrating for buyers. Prices have stabilized but we need to see them increase to help out people in the area that are still underwater with their house values. Although we have people still underwater on their houses, distressed property inventory remains very low – only 11% of all inventory consists of short sales and foreclosures.
The big news this month seems to be the rise in consumer confidence in our area compared with the rest of the country. My feeling is people are becoming more optimistic in Northern Virginia because we have jobs and our housing market is strong. We have a 1.5 month’s supply of resale properties and a 1.1 month’s supply of rental properties. People are not only out looking at properties but they are actually buying houses. Agents are working hard and diligently working on listings and contracts. The environment around the office is fast paced and optimistic as the agents are busy helping our clients buy and sell houses. Our lenders and title partners are expressing a lot of the same sentiments with the market and its activity. In addition, there is a lot of “good” publicity surrounding the real estate market which is a welcomed reprieve from the last several years of nothing but negative news. All of this information will propel us into the summertime selling season so if you are looking at your options with real estate, give us a call.
The Market is Hot, Hot, Hot!
The spring market is in full swing. This past weekend I was with an agent and they had 3 contracts on 3 different listings that went on the market the previous Thursday. One of them had multiple offers. In addition, we put a house back on the market last week that was on the market previously for about five months with no activity and got a contract on it over the weekend. So there are a lot of buyers out their looking, inventory levels seemed to have increased, but only slightly, interest rates remain low, days on market and months’ supply continue to stay relatively low as well. So if you are looking to sell, now is a great time. The trees are in bloom and the market is hot just like the weather! Let us know what we can do for you this Spring!
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!
The Power of 5
When it comes to social media, remember the power of 5…
1. Become a member of 5 social networks. Don’t worry about being a member of them all! Concentrate on the basics, twitter, facebook, linkedin, youtube, and a blog. Keep it simple, link them together for more efficiency and be active on them.
2. Post 5 times per day on any of your social media sites. Valuable content can be found in newspapers, friend’s posts, blog feeds, etc. Find something to post just 5 times a day. Use a program like hootsuite to schedule your posts. 10 mins in the morning and you’re done with your posts throughout the day.
3. Read 5 articles or blogs a day. Getting into the habit of reading will give you the knowledge you need to speak with others about the market, post on sites about it and might even inspire a blog post. You know you can post articles that you read on your blog…write a brief comment about it and link it back to the article’s source…it can be that easy.
4. Upload 5 videos per week. These videos can be ones that you take personally or videos that you “favorite” on youtube. Subscribe to video channels, simply click on the favorite button if you like a video and it will appear on your channel. Share it with Facebook and you’re done! Videos should be quick and informative, so interview your sellers, your buyers, your fellow agents, etc. Get creative and post it!
5. Post 5 blogs a month. Blogging can be intimidating where you think it takes a long time to put it together. It doesn’t have to be a long article. It could be a quick 2 paragraph post discussing something you heard today. Don’t stress yourself by feeling that you have to write a very meaningful and motivational piece. Simply write in your own voice…your readers will appreciate that. They want to hear from you and are interested in what you have to say. So let them hear it!
So this is what Deja Vu feels like!
The real estate market reminds me of the Bill Murray movie Ground Hog’s Day because I continue to say very similar things each month. We have very low inventory of houses, fewer than 4,800 in all of Northern Virginia. It has been this low for over 5 weeks and we haven’t seen inventory levels this consistently low since 2005. Interest rates remain at historic lows and it appears as if they are going to stay this low through 2014 unless something unforeseen happens in the economy. Lastly, we continue to see a drastic decrease in distressed property inventory in Northern Virginia and the onslaught of foreclosures will not happen locally. We have just 592 short sales and 290 foreclosures on the market and Notice of Trustee sales are only averaging 2 pages per day. Short sales and Notice of Trustee sales lead to foreclosures and if we don’t have them, we won’t see them.
The one thing that we typically don’t see this time of year is the number of attendees at open houses we are currently seeing. It is more typical than not to hear our agents having 20-40 people attend an open house and receiving multiple contracts as a result. This type of activity is more likely to happen in the spring but warm weather and consumer confidence building has helped spur this activity. As I have said in the past, if sellers properly price their properties, have it in prime condition and have it staged, they are receiving multiple offers because buyers are buying.
What are we reading in the news about the rest of the country and the market that will indirectly affect us? While delinquencies and defaults slowly improve in the housing economy as a whole, FHA’s portfolio has not had the same good fortune. The woes of FHA are creating increased pressure on the agency to reduce risk and increase costs to its borrowers, most of whom are first time buyers. In December, about one of every 10 FHA mortgages or 9.73 percent, were seriously delinquent, or more than 90 days past due. Compare that to all mortgages, whose seriously delinquent rate fell to 7.3% in December from 7.8 a year earlier. For nine straight months, FHA delinquencies have risen while mortgages in general have improved. We will keep an eye on this for you and let you know when the costs increase. On a positive note for those going through short sales and loan modifications, President Obama Proposes Extending Tax Waiver on Mortgage Debt Forgiveness that is due to expire at the end of this year. The Act ensures that homeowners who received principal reductions or other forms of debt forgiveness on their primary residence do not have to pay taxes on the amount forgiven. In addition to this, some banks are paying people to aid in their short sales. JP Morgan Chase went national with short-sale incentive offers last year, paying up to $35,000 in some cases. Bank of America is testing incentives from $5,000 to $25,000 in Florida to see if they should be expanding to more states. Wells Fargo’s incentive offers range of less than $3,000 to $20,000. Short sales, even with incentive payments to borrowers, can save lenders money compared with the expenses involved in completing foreclosures. Let us know if you need our assistance with either of these scenarios.
If you have questions about your personal situation, please feel free to call us. We are here to help you with all of your real estate needs.
Is the spring market coming?
In Northern Virginia our inventory levels of active resale homes for sale continues to decline. We are down to just over 4,600 homes on the market and we have a 1.8 month supply of homes. Houses that went under contract the last 7 days hit a 6 month high this past week. In a nutshell, houses are selling. Why is this happening? Interest rates hit another record low, we are creating jobs here, rental rates are increasing and our population is growing putting more demand on housing.
Last week I was asked when will we see the spring market or in other words, when will more houses be coming on the market? Some people say when the banks start releasing foreclosures, some say mid-March, and some say when their price rise. Let’s analyze each of these responses.
So far we have not seen the foreclosures hit the market and as a matter of record, the inventory has actually decreased to a 6 month low with only 311 currently for sale. In addition, “Notice of Trustee sales” published have actually remained very low as well averaging only 3 pages per day versus substantially higher numbers in 2008-2010. Lastly, I started tracking short sale inventory just over 2 years ago and we are at an all-time low in this area as well – only 651 are for sale in Northern Virginia.
As far as the inventory levels increasing in mid-March, only time will tell but several agents have indicated they have houses in the process of being prepared to go on the market around this timeframe. If they are not only preparing them for sale but are going to price them accordingly, they will sell. Two properties we listed on Friday received multiple offers because they were price properly and in the right condition. And now for the statement, “when my price increases, I will sell” is a tougher one to answer for many people. Rise compared to what? When they were purchased? Compared to 2004-2007 prices? Compared with the last sale in their neighborhood? Until these questions can be answered, we can’t help them.
We continue to have one of the best real estate markets in the country and it will be this way for the foreseeable future. Please feel free to contact us to learn more about how this market affects you and your situation.
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.
Scott's Motivation and Real Estate Market Updates 