A Shift in the Market: What you should know and do now
![A Shift in the Market: What you should know and do now](https://corefact-cdn.s3-us-west-1.amazonaws.com/corp/image/academy/ecd1fc20-b6d6-47be-bfc3-08daa9b81029/article_marketshift_august.jpg?AWSAccessKeyId=15AK267C51K3KYH17Y82&Expires=1725769385&Signature=HHxRQjWyVxePiBD7Iyt0QqBpkHA%3D)
The real estate market is cooling off. Many indicators, when taken together, show why it’s happening. Knowing why it’s happening can help you better prepare yourself and your clients.
The Facts
- Existing and pending home sales have dropped - NAR
- Monthly payments have increased by more than 50 percent in just four months because of higher mortgage rates - George Ratiu, a senior economist with Realtor.com.
- 80% of respondents said now is not a good time to buy - Fannie Mae
- A record high of 81% who think the economy is going in the wrong direction - Fannie Mae
- Housing is now the least affordable it has been since the mid-1980s - Black Knight
- The Federal Open Market Committee’s median committee member expects another 175 basis points of hikes before year-end - NAFCU
Big Takeaway
Get potential sellers off the fence now before rates increase, and equity starts to erode. Present the signs and let them know what it means to their specific situation. In most cases, homeowners have nested equity which could overcome any stress caused by interest rate hikes with another purchase. In some cases, sellers may want to move out of the city into the cheaper suburbs or out of the suburbs to the exurbs to help lower their housing costs.
Marketing Ideas
Email/Letter Template
I want to share with you market information that might help you evaluate if it’s time for you to sell your home. Leading indicators point to a shift in the real estate market. Here are some of them and how they would impact you getting the maximum equity on your home.
- Interest rates WILL rise more in 2022 - Rates have gone from 3.3% this time last year to 5.77% (as of this writing). Four hikes have been taken in 2022 so far, and more will be coming. Both sellers and buyers are impacted by rising rates. Affordability erodes as rates and mortgage payments rise.
- Inventory is low, yet buyers seem to be fatigued - In a survey by Fannie Mae, 80% of buyers do not think it’s a great time to buy. Part of that is because the inventory is so low, and they’re not interested in run-down homes. But, on the other hand, homes in good condition are still selling quickly. For now, anyway.
- A negative economy exacerbates the situation - Housing costs have surpassed wage growth and inflation by more than double over the past decade. Today's high inflation rate only furthers the problem. However, residential real estate is a hedge against inflation as long as affordability doesn’t deteriorate further.
We’re in a unique situation right now where home prices have grown in double digits the past two years, so most people have sufficient equity. Inventory of homes for sale is rising but still at very low levels, so houses for sale in good condition are in high demand. It’s still a “perfect storm” for home sellers. How long will it stay that way? Probably not much longer. All signs point to now if you’re even thinking about moving and cashing out your equity.
Voicemail Script
Hi [name], It’s Jessica Cellars with Cellars Realty, and I wanted to share some market information that might help you from losing the equity in your home. As you probably know, home values are at all-time highs, but they will not last. So give me a call at 555.555.5555, and I’ll share my thoughts on the foreseeable slowing of the real estate market. I look forward to speaking with you!
Direct Mail Options
Market Shift Series - NEW Templates Added
Postcards
Using our Market Shift postcards with a Home Estimate QR code is an instant way to see if potential home sellers are curious about their home’s value. Then, when they scan the code, you get notified and have a valid reason to follow up, whether with an acknowledgment note card or a lightweight CMA dropped on their doorstep.
Tear-Off Business Cards
Market Shift tear-off business cards get your message and a takeaway business card in the hands of your audience. It’s the perfect 2-in-1 direct mail piece to grow your brand and capture potential business using the Home Estimate QR code on the mailing side of the card.
Social Media Options
Market Shift Series - New Designs Available
Social Media Designs
Confidently guide your clients through this shifting market with our new Market Shift designs on Social Share. Share this example today and visit our Social Share platform for the entire series. Are you not currently subscribed? Start your free 14-day trial today and gain access to designs related to the current real estate market, community events, promoting your listings, and more!
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Email: CS@Corefact.com
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