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How to KNOW what is happening next in your real estate market: Why does it matter? Pricing is affected! Seller and buyer expectations shift. Price reduction scripts become necessary. Spokes of your lead generation wheel may shift. Commissions are affected; changing markets mean prospects need you more! Because prospects need you more, you’ll be competing more often for the best business (most motivated).
Here’s What To Watch For:
1- NODs, increasing or decreasing? Track Pre-foreclosures in Zillow for free. What zip codes and price ranges are seeing this type of activity? Some zip codes may have virtually none and others have increasing numbers.
2- BPO orders, increasing or decreasing?
3- BPOs being ordered, for what purpose. Establish value for re-fi or foreclosure? Mortgage Lenders association reporting high level of refi’s to pull out equity.
4- Price reductions (MLS Data), number and frequency and in what price ranges or zip codes?
5- Number of Expireds, increasing or decreasing?
6- Number of FSBOs, increasing or decreasing. Odd fact, number of FSBOs increasing can be an indication of a slowing market. Owners not wanting to
accept that their property is worth less than they think may try FSBO.
7- Builder incentives. Financing, bonuses to close quickly.
8- Interest rates. Know the impact of small rate increases.
9- Consumer sentiment… what are people saying in your local market? What’s the ‘word on the street’?
10- Pending home sales. Interesting fact: Pending home sales exceeded last high water mark in 2007. Crash followed.
11- Months supply of homes in all price segments in your market.
12- Increasing rents.
13- Funny, but true things to watch out for:
* Fancy agent marketing, over produced agent videos. All signs that the market has probably topped. Agent ‘ego’ marketing is an indication of an over inflated market.
* No one talking about profit. Brokerages (and teams) being OK with making less than 10% net.
* Investors backing (VCs) companies that sell stuff to agents. CRMs, lead generation etc.
14- Slow or no showings on listings you thought would be hot.