Today was the opening session of the RIS Leadership conference in NYC. Alex Perillo, President and CEO of the Realogy Franchise, was one of the best speakers. He opened by showing how the real estate situation we are in now is a by product of the basic principle of supply and demand. In 2003 we were at about 4.5 months of inventory on the market, this drove prices up. In July of this year we are at 10.6 months, this is driving prices down. The last time inventory levels were this high was in 1985 and it took approximately 8 years to get to what is considered a 'normal' market of about 6 months of inventory.
After delivering this news, Alex did a great job of giving advice on what to do to help correct this market, or help drive business enough to bring inventory levels back in check. Here were his top take-aways:
1) Know your local numbers inside and out. Don't just know what is happening in your city. Know it down to the zip code, or the neighborhood, or even the sub division. And know things like inventory levels, days on market, list to sell ratios. This will help arm people with information and data and help them make good decisions and see you as a valuable consultant to the process.
2) Get price adjustments. Knowledge from point 1 will help you do this. Using this data you'll be able to make statements like "I'm not telling you to lower your price, the market is". Do monthly CMAs to every seller so they are staying very current with what is going on.
3) Have the courage to say NO to over priced listings. Taking on overpriced listings adds to the problem of too much inventory, and it is inventory that is just going to sit there and make the market look bad. With high inventory, prices will remain low.
4) Become a rainmaker. Data mine your archives. Who bought a home from you 7 years ago? Reach out to them and recommend strategies around the opportunities in your market. Look to your spheres of influence and figure out unique opportunities to help them or people who are in their spheres.
5) Aggressively market to renters. The government has given us a finite window of time to reach out to this group with the first time home buyer's credit. And then think beyond that to parents who may have kids starting college or grandparents. Interestingly, Alex said that as he talks to people, most do not understand the difference between a tax credit and a tax deduction, so there is an opportunity to explain this to people and let them know about the hard dollars that are available.
6) Rebuild consumer confidence. It is estimated that 5 million homes will still be sold this year, regardless of all the bad press real estate is getting. The media would lead you to believe 500 would be sold this year. 5 million is still a lot of houses. For the last year Alex has been campaigning Realtors across the country that the best way to do this is by dedicating 20% of your existing advertising budget to SOLDS. He spoke of this last year at this conference as well, which I blogged about. People want to know that they aren't alone in buying property, and promoting this inventory set will help get that message across to them, in a non sales way, but in a way that is driven by facts.
Sara Bonert {Real Estate Internet Marketing}
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These are all good points. I dont know that it is possible to know the numbers exactly but you could have an overall feeling for different areas and then pull the numbers when you need them.