July 2019 Newsletter

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Summer is still in full swing, but back-to-school for many families is just around the corner. And you may still have some time-off planned for the entire family or maybe an office retreat!

Thanks again to Wanda Allen for her motivating webinar, “Follow Up Strategies That Will Get More Clients and Close More Sales.”We hope this helped in your strategic planning to develop better follow-up skills to help close more sales.

Allow AARC to assist with your educational opportunities: become a “Seal of Approval” community, attend the AARC Conference in Chattanooga on November 6-8, join The AARC and receive the latest trends and research and marketing opportunities to help you reach the mature market!

And speaking of markets. According to a recent survey by Redfin, Millennials Are the Toughest Customers, but baby boomers aren’t far behind. Regardless, real estate pros can hardly ignore millennials as customers. They’re the largest buying force in the housing market right now. Millennials represented 42% of all new-home loans, higher than both the baby boomers and Generation X, according to a study earlier this year from Realtor.com®.

Hope you have a great rest of your summer!

Sincerely,

Rachel Baker Chair, The AARC


Roaring 20s Returns….Recruiting Retirees in a New Decade      

Chattanooga, Tennessee – November 6th – 8th, 2019

What’s All the Flapabout? The Roaring Twenties is hitting Chattanooga this fall!

The AARC Annual Conference is pouring new energy and ideas into the retiree community industry.

You already know that the ‘Roaring’ 1920’s were an iconic period—booming economic prosperity, jazz music, flappers, and cultural shifts that changed the country. Back then, like today, ‘cutting-edge’ technology was changing the landscape. In the 20’s, it was things like the washing machine and…the radio (creating a new thing called nation-wide advertising!)

As we find ourselves headed into the NEW Roaring Twenties, it’s geo-location tech, social networks, and unlimited market research available to every potential customer that are changing the way we do business. Next on the horizon, we’re seeing  an increasingly savvy and demanding audience of soon-to-be and current retirees.

Are you excited for what lies ahead OR are you wishing you could enact Prohibition on some of these speed-of-light market changes?

Be inspired and informed by our Keynote speakers, Jason Forrest and Mary Marshall, from the highly acclaimed Forrest Performance Group (FPG). Jason Forrest, CEO & Chief Culture Officer of FPG is recognized for decades of creating high-performance homebuilding cultures through complete training programs. Mary Marshall, Vice President of Marketing at FPG, is a nationally recognized sales expert, coach and leading expert in online learning systems.

FPG is an award-winning sales and leadership training company dedicated to creating your high-performance, high-profit, and “Best Place to Work” culture. We’re not just focused on launching your sales to new heights. We care about creating the sustainable culture behind your sales.

A Message from our Keynote Speaker 

At AARC, we’re ready to help you SEIZE this new, exciting era.

We invite you to join us to learn from the industry’s top influencers this fall…

AARC 2019 Annual Conference:  Nov 6th – 8th
“The Roaring 20s Returns: Recruiting Retirees in a New Decade”
November 6th, 1pm – 5pm (Welcome Reception to follow)
November 7th, 9am – 5pm
November 8th, 9am – Noon
The Read House Hotel, Chattanooga, TN

To learn more or sign-up, visit the AARC Conference page


The Housing Market is About To Shift in a Bad Way for Buyers

Diane Olick, CNBC | July 9, 2019

KEY POINTS
  • The housing shortage that fueled competition and resulted in sky-high price gains throughout 2017 and the first half of 2018 is on the horizon yet again, and supply could potentially hit a new low.
  • The number of for-sale listings was up 2.8% annually in June, but that was down from May’s 2.9% gain. Inventory gains began to slow this year from 6.4% growth in January to 5.8% in February.
  • Gains continued to slow throughout the spring and supply is now expected to flatten over the next three months and could hit its first decline in October of this year, according to realtor.com

Competition in the housing market finally began to cool this year, as listings multiplied and price gains moderated. Bidding wars became less frequent and spring sales perked up a bit. Well, forget that. The heat is on yet again.

The housing shortage that fueled competition and resulted in sky-high price gains throughout 2017 and the first half of 2018 is on the horizon yet again. Supply is soon expected to drop and potentially hit a new low, according to realtor.com, after increasing in the second half of last year.

The number of for-sale listings was up 2.8% annually in June, but that was down from May’s 2.9% gain. Inventory gains began to slow this year from 6.4% growth in January to 5.8% in February. Gains continued to slow throughout the spring and supply is now expected to flatten over the next three months and could hit its first decline in October of this year, according to realtor.com.

“It was only 18 months ago that the number of homes for sale hit its lowest level in recorded history and sparked the fiercest competition among buyers we’ve ever seen. If the trend we’re seeing continues, overall inventory could near record lows by early next year,” said Danielle Hale, chief economist at realtor.com. “So far there’s been a lackluster response to low mortgage rates, but if they do spark fresh buyer interest later in the year, U.S. inventory could set new record lows this winter.”

Part of the issue is that fewer owners are now listing their homes for sale, and there are several reasons why.

“It’s likely a combination of rate-lock, recently decreased consumer confidence and older generations choosing to age in place,” added Hale.

Mortgage rates are still pretty low, but so many homeowners refinanced their loans when rates were even lower that moving would mean paying more for the same mortgage, on top of paying more for a move-up home. Even those sellers who want to downsize would be moving into a pricier market.

Home price gains had been shrinking, but the gains increased again in June for the first time in 14 months, according to CoreLogic.

“Interest rates on fixed-rate mortgages fell by nearly one percentage point between November 2018 and this May,” said Frank Nothaft, chief economist at CoreLogic. “This has been a shot-in-the-arm for home sales. Sales gained momentum in May and annual home-price growth accelerated for the first time since March 2018.”

All real estate is local of course, and inventory is leanest in some of the nation’s most affordable markets. In the 46 major markets tracked by Redfin, a real estate brokerage and analytics company, inventory fell in June annually for the first time since last September. Cities like Memphis, Tennessee, Pittsburgh and Oklahoma City saw double-digit declines in the supply of homes for sale, while much pricier markets like San Jose, California, Seattle and Boston were still seeing inventory gains.

“Lower interest rates are bringing buyers back, but without enough homes for sale to meet demand, we expect to see more bidding wars, which will push prices up this summer,” said Redfin’s chief economist, Daryl Fairweather. “We expect small, inland markets where a typical home is still affordable for a middle-class family to heat up the most.”


Key mortgage rate dives below 4% ahead of Fed meeting on interest rates

Deborah Kearns, Bankrate.com | July 24, 2019

The benchmark 30-year fixed-rate mortgage fell this week to 3.93 percent from 4.05 percent, according to Bankrate’s weekly survey of large lenders. A year ago, it was 4.71 percent.

For homeowners who haven’t refinanced their mortgage yet, this latest rate decline could make a compelling case to act soon. The Federal Reserve meets next week and is expected to cut the key federal funds rate.


5 Key Factors Driving Brokerage Profitability

Realtor Magazine, NAR.com | July 29, 2019

Brokerages’ gross margins and company revenues are continuing to face downward pressure, according to a new report from REAL Trends looking at brokerage profitability. However, some brokerages are standing out from the pack and maintaining and driving profits.

REAL Trends surveyed hundreds of brokerages to identify the top five key drivers influencing profitability. The five profit drivers they identified are:

1. Team productivity

Sixty-six percent of brokerages surveyed considered teams an additional source of profit for their firms. REAL Trends and the California Association of REALTORS®, in separate surveys of teams nationwide, said the top services that teams bring to a brokerage are technology services, marketing services, low fees and costs, legal and regulatory support, and mentoring and coaching.

2. E-lead programs

Leads are the path to creating a steady pipeline of new business. “The key to success lies in maintaining aggressive costs per lead and in having a system in place to effectively route and nurture those leads for maximum conversion,” the report notes. Fifty-nine percent of brokers said they currently run a brokerage-paid lead generation program. Thirty-one percent said they spend between $1,000 to $5,000 per month on such a program.

3. Coaching and training programs

Seventy-six percent of brokerages say they have a coaching program. To help with agent productivity, firms say they’ve done coaching programs on topics like lead generation, farming, negotiation, and more.

4. Ancillary services

Some brokerages are boosting profits by offering ancillary services, such as mortgage, title, escrow, insurance, and property management areas within their firms. Of the brokerages who responded to the REAL Trends survey, 73% offered some type of ancillary service.

5. Technology platforms

About 37% of brokerages with a technology platform reported it as an additional source of profit. Seventy-two percent said their technology platform has proprietary offerings, and 83% of them reported those proprietary offerings effectively differentiate their brokerage. “While agent adoption is always a challenge, the key lies in your rollout, education, and overall value it provides to your agent,” the report notes. Thirty-percent of the brokerages surveyed said that half to 75% of their agents use their technology platform on a daily or weekly basis.

View the full report to learn more about how brokerages are driving profitability.