A Look at the 2018 Real Estate Market
As the busy summer moving season draws to a close, now is the perfect time to take the temperature of the real estate market. A hot market means movers are busy while a cooler market means you may have to rethink your marketing strategy.
Either way, understanding the trends can help your moving business win bids from your competitors, provide better customer service, and earn more referrals. To help you prepare your fall marketing efforts, we’ve put together a recap of this year’s real estate market to date—and what industry experts will be watching over the next few months.
Is the market cooling off?
In 2017, the real estate market was expected to cool down, but that didn’t happen, according to Forbes. Instead, a hot market continued to be fueled by tight inventories, rising home prices, and stagnant mortgage rates. At the same time, online real estate marketplace Zillow.com reported that the value of the entire U.S. housing stock increased by 6.5 percent—or $2 trillion—in 2017. That was the highest gain in home values since 2013, when the U.S. was still recovering from the 2008 recession.
Fast forward to July, 2018, when Bloomberg Businessweek asked if the U.S. housing market was headed towards its worst slowdown in years and reported the following statistics:
- Existing-home sales dropped in June for a third straight month
- Purchases of new homes are at their slowest pace in eight months
- Inventory has begun to grow again as buyers move to the sidelines
In August, Realtor.com reported that while mortgage rates were dropping, more buyers are choosing to wait it out. Some homeowners are opting to stay put, renovate, and keep their existing lower mortgage rate. And first-time buyers are waiting out the market to see if the higher home prices and bidding wars cool off.
Zillow confirms these findings, hinting that the seller’s market is slowly beginning to weaken because of stretched buyers and a slight increase in inventory.
There are also some signs that competitive housing markets across the U.S. are losing some steam, according to online real estate broker Redfin:
- The percentage of homes that sold above asking price slightly declined year over year in July for the first time since March 2015.
- The number of homes on the market that had to drop their asking price went up to twenty-eight percent in July—that’s a 3.2 percent increase over last July.
But as you know, real estate is highly dependent on location. In July, Redfin ranked the ten most competitive large cities to purchase a home as follows:
- Fremont, CA
- San Jose, CA
- Seattle, WA
- Oakland, CA
- Aurora, CO
- San Francisco, CA
- Tacoma, WA
- Denver, CO
- Boston, MA
- Sacramento, CA
If your business serves one of these cities, you should expect to see some slow down. Bloomberg agrees that in hot markets like Denver, Seattle, and Austin, Texas, the highly competitive market for previously owned homes is starting to cool. According to Zillow, however, less-expensive markets may still experience a boom in sales and prices, as bargain hunters jump into the fray.
Over the next few months, industry experts will be keeping tabs on a number of factors expected to impact the market, including:
- Rising mortgage interest rates and record-high housing prices
- The elimination of lucrative tax breaks for homeowners
- Flattening rental rates
What does all of this mean for your moving business?
Even though the market may be showing signs of a less frenzied pace, the fall is the perfect time to fine-tune your marketing efforts to ensure that you continue to fill your sales pipeline and keep Fall and Winter busy.
While families with school-aged children are less likely to move as school is starting, there are plenty of other people who do: empty nesters, millennials without kids, and relocating executives. Not to mention people doing renovations in time for the holidays who may need help moving items into storage.
What’s more, listings that didn’t sell over the summer will be reduced. This is the time of year when homes are on the market longer, which gives you the opportunity to extend your busy season well into the fall and winter. If a home hasn’t sold in 90 days, we will recycle the lead so they can keep you top of mind.
The key is to keep a steady source of leads in your marketing pipeline.
If you’ve been sending postcards, now is the time to expand your criteria to reach as many leads as possible and follow up with previous leads. It’s vital to continue your direct mail efforts through the fall so that you can capture business now through the end of the year.
For more tips on how to do just that, read our Mover Marketing Tips for Fall.
Categories: Real Estate News