As of March 20201, active property listings are down at least 20% year-over-year. Pair that with attractive interest rates, and a feeding frenzy for hot properties ensues. Investors are looking to gobble-up attractive properties, and buyers are moving to booming areas or investing in second homes. The COVID-19 pandemic has given rise to new migration and relocation patterns.
In short, 2021 promises to be a wild ride for the real estate market. How can investors, brokers and agents adapt?
Amp Up Your Networking and Research Strategies
"When the market shifted and inventory dipped, we took a joint approach to building our business and successfully serving our customers," says Nick Ron, CEO of House Buyers of America. He "networks like crazy," working with agents, brokers and investors to find out who has properties.
"Frequency is key right now," he asserts. "Stay top of mind with your sphere of influence and you will prevail."
Ron also advocates for automation. Keeping track of leads and analyzing what aspects of outreach are working best for you will help you focus your time and energy on the best channels and campaigns.
Investors, brokers and agents can also use automated systems like PropStream to ensure they are paying a fair price for properties by delving into trends, neighborhood qualities and accurate local estimates for rehab costs.
See the Market Through a Buyer's Eyes — And Get Creative
"Find more inventory for your clients," advises James McGrath, co-founder of yoreevo, a New York-based brokerage company. "When one of my buyers misses out on a property, I look for nearby listings of properties that have been taken off the market and reach out to the sellers. McGrath has discovered that if you go to a prospective seller with a committed buyer who is ready to make an offer, you can overcome objections.
Having multiple deals in play can help a broker or agent avoid client disappointment. That can be a two-way street. James Badia, sales agent at Pam Harrington Exclusives in South Carolina tries to have a couple of buyers ready to make deals, so sellers' transactions can move rapidly. Badia also likes to keep his clients aware of potential new listings before they come on the market. When clients perceive a broker has the best "inside intelligence," they are more likely to remain loyal.
Optimize Virtual Appeal
Even in a low-inventory market, some homes may sit longer than they should because they are not appealing online, where many buyers start their search today. Susan Strawgate Code of Westchester, New York-based Houlihan Lawrence stresses the importance of staging.
"If a buyer isn't grabbed and interested within the first four to five photos online, they won't pursue a property," she says. So even though demand is high, to get the momentum going, brokers must work with sellers to create "online curb appeal."
"Sellers still need to remember that buyers are more educated about market value than ever," Code continues. "They still won't look at an overpriced house or a house that shows poorly. They would rather pay more at the historically low-interest rates, for a house in better condition, rather than take savings out of the bank to improve it."
Explore and Analyze
Brokers and investors can open up new inventory by looking at neighborhoods they may not have previously considered. Familiarize yourself with up-and-coming geographies and communities and educate yourself and your clients about areas they may not have previously considered.
Buying and selling today requires brokers, agents, investors and buyers/renters all to be fleet on their feet and ready to make a (good) deal rapidly and smartly. In a tight market, knowing the facts and marketing smartly are more important than ever before.