Wow, what a difference a year makes! Comparing this time last year to now, active listings are down 44%, average month’s supply of inventory is down 47%, and multiple offers/escalation clauses are the norm rather than the exception (greater Seattle market). I don’t know that anyone anticipated the market we are in today. The question is has your value proposition changed?
Our client’s world certainly has changed. It’s no longer Sellers hoping to get a reasonable offer within 30-60 days. Now it is how to get multiple offers within a week, determine the best price and contract combinations, make sure the home appraises, and prevent the hordes of Buyers from trampling the rose bushes during the open house! What about Buyers? This market is especially difficult for Buyers. Not credit approved yet? Forget about your offer being considered. Just saw the perfect house but want to sleep on it? Yikes, good luck it will still be available in the morning. What about those Buyers who are losing bidding wars time and time again?
So has your business changed to match this crazy new environment we are in? How has your marketing plan/listing presentation changed over the last 12 months? With so few listings it is less about marketing (buyers have no problem finding well priced homes) and more about your strategy for encouraging and managing multiple offers. What are you doing differently to write/present winning offers for your Buyers? Do you have a strategy for identifying off market properties?
2013 will be a terrific year for those Brokers who have adapted their value proposition to the new market. Our Brokers are already ahead in sales and commissions over the same period last year and last year we were up double digits from the year before! If you haven’t changed your approach to the new market and would like some help, give me a call. I would be happy to share with you what is fueling our success.
You could feel the turn of the market in mid-summer of last year. While prices continued to be soft in many areas, the close-in markets in Seattle and the Eastside started to show signs of stabilizing as did affordable housing ($300,000 or less) in most of King County. We are now seeing multiple offers in many price ranges. First time home buyers moving out of rentals (or their parent’s basement) and investors who want rentals, are competing against each other in the low end. Move up buyers who have been sitting on the sidelines are now coming back in to the market before interest rates and prices rise. High end buyers have regained confidence in their stock portfolios and are coming back in with cash or huge down payments.
What does the market look like for 2012? With inventory down over 20% overall and down 32%+ in Snohomish County, it is a Seller’s market in most areas however the level of distressed properties (24% in King and 35% in Snohomish counties) will continue to put a damper on prices.
How does this impact our businesses? As always, well priced listings are key. Buyers do have fewer choices but are more informed than ever and won’t bother with overpriced properties. If a seller won’t price and prepare their home properly, don’t take the listing. Our brokers utilize a unique 16 step seller process that helps us only take listing that sell quickly. As for buyers, with fewer quality properties on the market, they need to be prepared to act quickly and decisively. Being pre- approved by a reputable lender is a given. Making sure your buyers are fully informed on the market so they have the confidence to write an offer when they see a good value is critical. We use a 10 step buyer process to clarify our buyer’s needs and educate them on the market so they can make a confident decision after viewing 5-8 homes rather than 20+ homes.
So what will your business results be in 2012? The brokers in our office increased their commissions 25% in 2011 using our proven processes even though the market was down. We should all have a plan in place to outperform the market. If you don’t and would like help to create one, please contact me. I would be happy to share with you our practices and help you make 2012 one of your best years ever.