“How’s the Market?” Episode 1 – January 2019

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Starting this week, I’m proud to introduce an all-new, once-a-month show in conjunction with “The Oracle” Steve Harney and the whole KCM Crew.

We’re calling it “How’s the Market?” and it’s intended to keep you up-to-date on market data so you can make sense of it, communicate it clearly with your clients, and become that “knowledge broker” consumers know they can turn to for all their real estate needs.

PS: if you’d like to get more insights into what Steve Harney and his team at KCM can do for you click here.

Let me know your feedback in the comments below!

Below is a transcript of the show…

How’s the market? How often do you get asked that question every day? That’s exactly why here at Tom Ferry, once a month, in conjunction with KCM, Keeping Current Matters, we’re going to distill the data. We’re going to keep you up to date, and we’re going to help you make sense of it so you can do the same for your buyers and your sellers in your market.

Today, we’re going to look at buyer behavior and some surprising stats. Let’s start with each year where the Federal Reserve banks, center of microeconomic data, asks, “Do you believe that home ownership is a good investment?” Well, in 2016, my friend, 59% of people in the United States said, “Absolutely, yes.” In 2017, that number jumped to 60%.

So, with all the craziness of the changing market halfway through 2018, what do you think the number was? Well, it actually jumped to 65%, which means the American people understand home ownership is a really good idea. But other data shows they’re a little confused right now and maybe even a little scared. I’m sure you see this.

According to the foot traffic report from the National Association of Realtors and the showing report from showingtime.com, the number of buyers looking at home has fallen dramatically. It was off by 5.4% nationally and has decreased more than 12% in the western U.S. When people are nervous, and you know this, when they’re nervous about buying, it doesn’t just affect them. It also affects the potential sellers who are thinking about putting their home on the market.

So what do we need to do? The answer is educate and reassure. Let me say it to you again. What we need to do is educate and reassure. Just like I’m filming this for you. I hope that you’re doing the same, and that it’s not just on a piece of paper, a flyer, or a newsletter. The bottom line is the message should be that home ownership is and has always been a great investment. And, as cliché as this sounds, now is the time to buy.

Now, you know if you just say that, and you don’t back it up with stats, like 2016, ’17 and ’18, what people are thinking about. If you don’t use the stats, you just sound like a cheesy salesperson. So use some of these stats to maybe illustrate or tell a better story about the national market and, if you’ve got it, the local market.

So let’s start with historical home price appreciation. It’s historically been 3.6%. Now, I don’t know about you, but if you put a little money in your bank, you’re certainly not getting 3.6, and you’re not growing any net worth unless you’re doing things that get you 3 or 4 or 5 or 10%. What was fantastic was in 2018, it was 5.1% appreciation across the country. In 2019, with all the nuttiness, it is still projected to be 4.9%, which is 33% above the historical average.

Now, if you’re not a data nerd and this isn’t your thing and you just come out and say, “Now is the time to buy,” you look like a cheesy salesperson. Use the stats. Use the data nationally, which is how the world views real estate, and then locally always.

So now, let’s take a look at what that can mean for someone who actually buys today. According to the Home Price Expectations Survey, which takes into account the opinions of 100 of the most important real estate experts in our country, if a home buyer buys a home today for just, say, 250,000, that home in the next five years is going to increase your net worth by $39,520.

So think about that. Your net worth goes up by nearly $40,000 in five years for buying a home and enjoying the fact that you’re living in it. If you buy a $500,000 home, the projection doubles to almost $80,000 in five years. A million-dollar property is $160,000 increase to your net worth in the next five years.

On the flip side, the cost of not buying today is losing out, not just on that increase in your net worth, but with home prices continuing to appreciate and mortgage rates absolutely expected to continue to rise, it is cliché, but truly, the best time to buy in the next five years is absolutely today.

Now it’s up to you to customize this, to personalize it for yourself and ultimately take these stats and get them out in the marketplace. You’ve heard me say countless times before you want to have the strategy of preeminence. You want to be the agent people turn to because you studied the market and the trends more than anybody else, and you get it out in a beautiful, elegant way, sometimes just with your iPhone or whatever phone you use.

So, if I was talking to my friend, Steve, over at KCM, he would say, “I’ve got a few goals for you in the month of January of February.’ The first thing he’d say is … You’ve heard him say it. Don’t panic. Right? Keep a level head.

Number two, you’ve got to stay current every single day because we both know the market is shifting on a macro and micro level all over your town every day. So one thought is continue to stay with the KCM one-minute video every morning, just like I do.

Number three, you’ve got to control the narrative, which we’ve been talking about since the summer of 2018. We need to do our best to prove that many of these myths that people are having when they’re sitting at their office drinking their coffee with their friends, we’ve got to prove that these myths simply aren’t true.

Then my point to you is the same thing I’m saying to all my clients around the world. Continue to list like crazy and list more than you did in 2018. By controlling the inventory, your business will always shine.

So this is the first time we’ve done this. I can’t wait to read the comments. Give me your feedback. Let me know some of the questions you’d like us to answer, and we’ll take the time to dissect them and bring you that information so you can continue to be the expert in your town. Have a great day, and we’ll talk to you soon. Take care.

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