August 2020 Newsletter

“Well, we’re scared, but we ain’t shakin’

Kinda bent, but we ain’t breakin’

…in the long run”

So this month its Eagles lyrics. Why? Well, two things happened in the last few days of August, 2020: the major stock market indices all got back into the positive for the year, and Warren Buffet turned 90. And both are testaments to…(wait for it) the long run.

Buffet’s investment success is based in patience and long term value, not on rash moves. In his words, “simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”

There certainly was (and is) a lot of fearfulness in the age of covid, as evidenced by the significant hits to the markets earlier in the year. But in the long run, good solid fundamentals are the basis for success.

What does this have to do with the AARC, you ask? Well, many of us have seen big drops in traffic and demand in the early months of the pandemic, but have seen a lot of that decline erased in the summer months. From a marketing standpoint, your communications efforts generally don’t pay their dividends for months or years – getting prospective buyers into your sales “funnel” is an exercise in the long run.

So while near term budgets may be a bit fearful, you might also consider refocusing your retiree attraction efforts, and even being greedy. Because as Don Henley told us four decades ago,

“When it all comes down we will Still come through In the long run“

Bill Houghton
Chair, The AARC

The Light:  YOLO!  Second-Home Boom

Chris Dorociak, Ken Perlman and Lesley Deutch, John Burns Real Estate Consulting | August 28, 2020

Demand for second homes in drive-to destinations is surging. Nationwide, these convenient locations are benefiting from a rise in the YOLO (you only live once) mindset as people across the country look to get away and enjoy life as safely as possible during the pandemic. Developers and builders can take advantage of the boom by understanding second-home buyer preferences and a renewed focus on lifestyle in their communities.

Record-breaking demand for drive-to destinations. In July 2020, the Sierra Tahoe MLS logged its highest residential dollar volume in history, up more than 200% year-over-year. Sales at Long Cove, an upscale masterplan on Cedar Creek Lake south of Dallas reached an all-time high in June and again in July. Pending home sales in Bend, Oregon rose 150% year-over-year in July. And in Rehoboth Beach, Delaware, sales doubled compared to the same time last year, fueled by demand from New York and New Jersey.

Family refuge in less than four hours. Most second-home buyers, particularly those with school-age children, prefer to drive less than four hours. They desire a getaway to “invest in family,” as well as a place of refuge for the future.

The new “primary” home means longer stays. Because parents can work remotely and children can learn remotely, homeowners now measure second-home stays in weeks and months, rather than days. This use pattern flips the traditional weekend second-home model on its head. Now, households may stay at their second home for most of the time and travel back to their primary home on occasion. Elements such as high-speed internet, home offices, and learning spaces for children have become just as important in second homes as primary homes.

Buyers want to move in soon, which means a priority on a finished home. Today’s buyers are less interested in purchasing a homesite and spending years designing and building a custom home. Resort developers across the country tell us buyers prefer finished product so they can experience their second-home lifestyles right away. We recommend developers in second-home destinations focus on completed homes that are ready for purchase. For to-be-built homes, the build process should be simple and short and include design elements consumers want most. We are tracking consumer preferences and offer great resources to keep you on top of the latest trends.

YOLO in addition to FOMO. Last week, we featured FOMO (fear of missing out) as a reason that buyers are rushing to purchase new homes. The psychology of “you only live once,” or YOLO, is driving the surge in second-home sales. Households who may have otherwise waited have decided now is the time to buy, often using funds that would otherwise be allocated to more traditional vacation travel. Today’s buyers are showing more interest in lifestyle and use than rental potential and future appreciation. Developers who emphasize the lifestyle in their marketing programs will experience stronger sales.

Have questions about second-home trends and how to apply lifestyle themes in your community? Please contact Chris Dorociak regarding destination strategies. Contact Ken Perlman or Lesley Deutch for great ideas on community success.

New-Home Sales Look a Lot Like 2006’s Housing Levels

REALTOR Magazine | August 26, 2020

Buyers continue to rush to the new-home market. Sales of newly built single-family homes in July surged to the highest pace since 2006, jumping 36% higher than a year ago, the U.S. Department of Housing and Urban Development and U.S. Census Bureau reported Tuesday.

The Midwest saw the largest spike in new-home sales last month, a 59% month-over-month increase in July. All four major regions of the U.S. posted annual gains in new home sales.

“Consumers are being driven by low interest rates, a growing focus on the importance of housing, and a shift in buyers seeking homes in lower density areas,” says Chuck Fowke, chairman of the National Association of Home Builders. “Despite these positive conditions, affordability challenges remain, especially as builders are dealing with building cost increases, including a dramatic rise in lumber costs in recent months.”

The NAHB reported a recent spike in softwood lumber prices that has added an average of $14,116 to the cost of a new single-family home since April 17.

The median sales price for a new home in July was $330,600, up 7% from a year ago.

Builders: New-Home Prices Are $14K Higher Due to Lumber Costs

“New-home sales are benefiting from a suburban shift, as prospective buyers seek out affordable markets in order to obtain more residential space,” NAHB Chief Economist Robert Dietz says. “Moreover, sales are increasingly coming from homes that have not started construction, with that count up 34% year over year. In contrast, sales of completed, ready-to-occupy homes are down almost 24%. These measures point to continued gains for single-family construction ahead.”

Year over year, the Northeast posted a 21.7% annual increase in new-home sales in July, followed by a 20.4% yearly gain in the Midwest, an 8.7% increase in the Midwest, and a 4.8% uptick in the South.

Still, builders are keeping their inventories low. New-home inventory dropped to a four-month supply in July, the lowest since 2013. A six-month supply is considered a benchmark indicating a balanced market.

This Is What Every Agent Should Be Doing Right Now

Keeping Current Matters.com | July, 2020

The last couple of months have been a rollercoaster ride of emotions.

As we cope with the next phase of this pandemic, many cities and states around the country are slowly reopening. While we haven’t quite reached the normal we had before everything happened, we do see progress in one area: the real estate market.

High buyer demand coupled with low inventory is driving an even more competitive market than what we saw before. Which means this is the time to give yourself every advantage you can to win listings, convert clients, and keep your business going.

The market is in your hands.

Here’s how to make it happen.

The Real Estate Customer Journey

There are three basic phases to every customer’s journey: gathering leads, nurturing them and converting them into clients.

Here’s the breakdown:

Prospecting Leads: online advertising, cold calls, landing pages, website, social media
Nurturing Leads: emails, texts, phone calls, social media
Converting Leads: Seller signs contract, buyer purchases home

For many of you, converting leads is more difficult due to general apprehension about our economy’s future. But there are two very important steps in this process you can still be focusing on: prospecting and nurturing.

And when this passes, the agents who have done that will be ready to start back up where they left off.

Analyze and Revise Your Lead Generation
As the trusted advisor, your sphere of influence is looking to you to answer some tough questions, even if they aren’t openly asking them.

A picture says a thousand words, and visuals are the single best way to communicate data and hard facts.

Instead of trying to explain why the housing market won’t collapse, show them.

Here’s how to do it:

  1. Sign up for a free trial of KCM Pro
  2. Download the social graphics to your phone
  3. Copy the captions & hashtags
  4. Create a new Instagram or Facebook post.
  5. Upload the graphic, and insert the caption and hashtags.
  6. Publish and repeat.

Not only are you boosting your social media marketing and growing your following, you’re providing relevant market data that educates. It’s a win win.

CRM and Database

There won’t be a better time to organize your database. Don’t have one? Create one. Make sure all your leads are labeled appropriately. That way you have a solid list of promising prospects that you can hit hard and don’t waste time.

Email

The same goes for your email campaigns. If you use an email marketing platform, now is a great time to do a deep dive and see who opens your emails. If they’re interacting, that means there’s potential. If they aren’t, you can probably write them off as a cold lead.

On that note, a tone-deaf email could make or break your brand right now. Make sure you go through all of your campaigns and pause any that may send the wrong message.

Website

You should also be taking this time to update your website with the latest information. Create a new landing page addressing the needs of buyers and sellers in the market right now. Update images, include SEO-charged language. Comb through every piece of your site to make sure it reflects your brand and is easily navigable by prospects.

Social Media

This is especially true for social media. If your strategy usually consisted of sharing your listings, this is a good time to pivot. Fill your feed with graphs, charts and quotes that keep your followers informed and promote engagement.

In a recent Qualtrics survey of home sellers, 87% of respondents said they were concerned their home won’t sell because of the pandemic and resulting economic recession.

However, buyers haven’t skipped a beat. A recent report from ShowingTime reported that appointments to see homes (both virtually and in-person) have increased in every region of the country and are up 21.4% nationwide over the same time last year.

The key to creating balance in the market and helping inventory catch up with demand is building seller confidence. Sharing the right information will do that.

Amp Up Your Lead Nurture
Now more than ever, your leads, clients and sphere need to hear from you. They need a trusted advisor. It’s your job, and frankly your moral obligation, to educate them on the market and what it means for their real estate decisions.

There have been a lot of frightening headlines and many people expect the worst, but recent data shows that buyers are still looking for homes at nearly the same rate that they were before.

By keeping your contacts informed with facts and insights about what’s really happening in the market, you’re helping to calm fear while building trust and credibility with your clients.

You can do this by:

  • Creating market update videos
  • Sharing on social media
  • Sending emails
  • Sending texts
  • Making phone calls

Consumers are out there. The digital space is booming. The agents that are able to adapt and create new business in this environment will not only survive, they’ll thrive as the market continues to pick up.

See How Agents Are Doing This

By taking real estate insights, KCM content and local statistics, you can create materials that help calm fear and educate your community. Whether you’re throwing together a video, sending an email or being more vocal on social media, there are many ways that you can step up as a trusted advisor.

Here are a couple ways agents like you are doing it (and seeing success).

Share Market Insights on Social Media

If you’re wanting to get the right information out on the right platform fast, social media is a great place to start. By sharing data, statistics and insights, you’re not only filling your feed with useful and educational real estate information, you’re showing clients and prospective clients that you’re an industry expert.

In the examples below, you can see how KCM members put their Social Graphics in action on their feeds. Professionally designed and ready-to-post, all you have to do is download, copy and paste. They not only help create a consistent social media presence, they’re packed with important industry insights and include ready-to-go captions and hashtags.

Sign up for a 14-day free trial and start using KCM Social Graphics today.

Post a Market Update Video to Youtube

Tamara Inzunza, an agent in the D.C. area, had always wanted to get into making videos but, like most agents, was intimidated by the process. However, when COVID-19 hit and her clients were looking for answers, she realized video was the best way to keep them up to date on what was happening in the market.

One of the main fears surrounding real estate right now is that mass unemployment is going to lead to a massive amount of foreclosures. So, Tamara teamed up with loan officer and financial planner, Eric Wigren, to offer a special client webinar going through forbearances FAQs. Using KCM Monthly Market Report slides to detail special data points, she was able to create a video that helped discuss a hard topic easily and educated her clients through the process.

Bottom Line

With all the uncertainty surrounding today’s economy, people are searching for answers about where the housing market is headed.

Anxiety sparked from memories of the Great Recession is in full swing, and your clients are looking to you to calm their fears.

This is an important time to connect and correct any misinformation with research-backed facts so when everything is said and done, you stand out as a real estate expert that can be trusted.

Create videos, share real estate insights, and stay up-to-date with what’s happening in the market by visiting our Resource Page often.