In the Great Recession just a decade ago, homes were sitting empty around the country as homeowners defaulted on mortgages, encountered foreclosures, and sent the nation’s real estate markets into a downward spiral. Now some cities are being hit with an opposite problem: too many qualified buyers for too few houses. The number of homes for sale has fallen over the last year, and as spring and summer buying seasons kick into high gear, some would be homeowners are in for a big surprise.
Redfin CEO “Freaked Out”
Glenn Kelman, CEO of Redfin, told CNBC that “The inventory is reaching historic lows. It’s never declined faster than it did last month. It’s freaking us out — it’s affecting our business; it’s limiting our sales.”
While some areas have yet to see home prices return to pre-recession levels, popular urban centers are drawing in Millennials faster than current residents want to sell. This, along with other economic factors, are driving up demand for homes while inventory stays stagnant. This has real world impacts on both home prices and sales volumes.
Cities like Denver and Portland are seeing homes sell with sometimes upward of a dozen offers. Houses are selling as fast as they are listed. In these conditions, homes are selling as fast as they are listed. But if there are fewer homes listed, fewer homes will sell and fewer commissions will be generated.
This is what the real estate industry should be worried about today.
Slower Markets Lead to Faster Sales
Finding new clients is as important today as it has ever been. While your efforts with home buying clients may be met with some frustration in the current multiple offer environment, landing a home to sell is akin to striking gold. All you have to do is take decent photos and write a mediocre listing and it will sell quickly.
The Redfin data shows that homes are selling faster than they have been at any point since they began tracking in 2010. In April 2016, the typical home went under contract in 40 days. 1 in 4 homes sold above list. Redfin CEO Kelmin told CNBC that he doesn’t see this as a bubble, he sees it as a result of low inventory.
If inventory increases slowly, the rapid home sale trend is likely to stick around. This is great news for selling agents, but may cause buyer’s agents to groan.
Capitalizing on the Trend
Agents in hot markets with low inventory can position themselves as experts in selling homes quickly. After all, odds are that will be the case no matter how you list in the most popular cities in the country.
Focus on providing high quality customer service and be very, very responsive to ensure the home sells quickly for the best possible price. Networking with the local Millennial population will lead to a great payoff, as many Millennials are just “vacation movers” spending a couple of years somewhere before moving on. If you can meet them on the way in and maintain a relationship, you just might come to mind when it is time to sell in a few years.
Make Yourself Easily Found
A great website, activity on social media, and positive reviews around the web will help you succeed in real estate in the 2010s. To make yourself even more discoverable, join AgentHarvest. At AgentHarvest, we offer real estate clients access to listings of vetted, high quality agents like you. Before they buy a home, real estate clients need to start the hunt for the best agent. To find a great agent, they head to AgentHarvest.
Learn more about joining us today!