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The market has kept agents on their toes for at least the last year and a half now with plenty of buyers but not enough inventory to keep them all satisfied.
Speakers at Inman Connect Now on Thursday discussed the latest market trends and what they’re willing to spend money on at the moment, while cautiously making a few predictions for the future during a panel moderated by speaker and consultant Valerie Garcia called How To Make The Most Of The Current Market.
Garcia noted that agents across the country are seeing low inventory, but wondered what else panel speakers Jonathan Spears of The Spears Group in the Florida Panhandle and Jennifer Cameron of Coldwell Banker Bain in Seattle were seeing in their markets.
“One trend that we’re seeing that’s really unique is this influx of new construction buyers,” Spears noted. “I work in a second-home market … and our primary purchaser is purchasing their second, third or fourth home.”
Spears said that trend has spurred his team to think more about how to market new construction, specifically. Some of the strategies that have worked for them thus far have included high-resolution renderings and live video walkthroughs.
Cameron, on the other hand, is seeing buyers who care more about a home’s location than the property condition, being more willing to take on fixer-uppers and showing a deep interest in green-friendly homes with the potential for solar energy.
“I’m seeing a real shift from buyers who, let’s say, wanted everything meticulously perfect [to] being more focused on location, but more open-minded to what can be,” Cameron said.
The speakers agreed that no market lasts forever, which is why they’re preparing now in case of a shift.
For Spears, that’s meant staying on top of new inventory that’s just about to come to market and giving sellers a bit of encouragement to list, to try and avoid too much buyer burnout.
“Remaining on top of the inventory and understanding how we can put deals together that both come to market and pre-market has been a really big opportunity for buyers and sellers and we’re trying to take new strategies with sellers in particular to build the maximum amount of urgency,” Spears said.
After more than two decades in the industry, Cameron feels pretty confident she can weather whatever the market throws at her at this point, but added that she’s just trying to keep her team focused on the basics of the business in order to prepare for a shift.
“I’ve scaled a team for the first time, we are laser focused on our goals, our objectives, we have a strong business plan, a strong marketing strategy, we’re making sure all our operations and systems are very tight and we’re putting it on paper,” she said.
Cameron and Spears said their savviest customers who are seeing the greatest success right now are those who are listening to their agents’ advice and making smart decisions based on that advice.
Cameron said she’s honest with buyers about the current market situation and lets them know straight off the bat, “this is going to take a lot of trust, and here’s what you need to do to win.”
She’s also honest with sellers, letting them know that in order to get the most out of their investment and maximize the profitability on their sale, they can’t just put their home on the market without advanced preparation.
“They get a lot of mixed information from real estate brokers that come in and say, ‘In this market, there’s nothing you need to do to your home …’” Cameron said. “But I walk in and I’m asking them to do all these things, to pre-inspect, make repairs, make renovations, and I’m saying the opposite … This is your one opportunity to maximize your profitability, but you have to do all these things.”
Spears added that his savvy clients are analyzing their assets and making smart investments in his vacation rental market.
“The savviest customers we have are looking at the liquidity events that are happening in their life and businesses and maybe some of the historical gains they’ve had in their investment portfolio and eyeing a hard asset they want to invest in,” Spears said.
One of his clients realized she was losing money by leaving cash in the bank instead of investing it, so she found an opportunity to invest in a rental that her family could also utilize when they’re visiting town.
In terms of investing their own money, Spears and Cameron agreed that marketing was one area of their business worth spending on.
“I am spending money being very focused on my marketing and I know that’s sometimes tough,” Cameron said. “So my farm in my area is expensive and sometimes you’re not seeing a return or a smaller return and you want to give up — this is not the time to give up, it’s just because we don’t have as much inventory … Marketing in a down market is even more critical than marketing in an up market.”
“Our team is heavy into marketing — our marketing dollars account for one of the largest aspects of our outflow in the business and for us, our customer’s not here [permanently],” Spears said. “My customer maybe spends two to three weeks here annually, so how do I get in front of them? For me it’s direct mail, investing in farming a specific area.”
What Cameron is not spending money on — after learning the hard way — is things that don’t align with her business plan.
“Things that are not in the sight line of my goals — my focus, my strategy, my plan,” she clarified.
Spears added that while investing in the human capital side of his business by hiring on key players like a full-time media director and a CEO to run his team, he’s veered away from investing in static print ads, which don’t serve his business as well.
Looking to the future, Spears and Cameron were hesitant to make predictions about where the market would go, but both agreed the low inventory crisis would likely continue.
“The first thing that comes to mind when my customers ask me this is, ‘I don’t have a crystal ball’ and I always look to the past to forecast the future,” Spears said. “I’ll give you four words: Continuation of low inventory.”
“I always hate predictions because sometimes you’re right and sometimes unexpected things happen,” Cameron added. “But what I don’t expect is an ease in inventory, we just have too many buyers in the Seattle area.”