Appearing on Inman Connect’s morning show, RE/MAX Chief Customer Officer Nick Bailey gave advice to agents on how to overcome the lack of housing inventory.
An inventory shortage shouldn’t be what’s standing in the way of real estate agents having a record year in 2021, RE/MAX Chief Customer Officer Nick Bailey said Thursday during the Inman Connect morning show hosted by Laura Monroe, Inman’s global head of community.
“Your number one job as an agent right now is to manufacture inventory,” Bailey said. “The first time move-up buyer and the second time move-up buyer are huge right now, that’s what pushed transactions way over the forecast for 2020 and we still have that rolling right now.
Bailey said there’s only one home for sale in his neighborhood right now, but he guarantees there are at least a dozen or two dozen households that want to move, they just haven’t listed yet or started the process.
“It’s your job to figure out who those 12-24 are because they are out there,” Bailey said.
Bailey touted RE/MAX’s own acquisition of artificial intelligence platform First, which uses machine learning to try to predict which contacts in your sphere are getting close to selling.
The key to being successful in manufacturing inventory is actually taking the step to reach out to those individuals, Bailey explained. You won’t be able to just find them online, you’ll need to text, call, reach out and find out if they still like their house.
While the current housing market is marked by low inventory and competitiveness, it won’t always look this way, so educating yourself as an agent is important to long-term success, according to Bailey. Especially at the number of total Realtors tops 1.5 million, an all-time high.
“This industry has low barriers of entry, but high barriers of success,” Bailey said.
Ten years ago, in the wake of the Great Recession, that number plummeted below 1 million. In the industry right now, over 50 percent of agents have been licensed less than 10 years, meaning they’ve only been on one side of a run-up in a seller’s market, Bailey explained.
“I urge caution to agents and caution to brokers, that the market will not always look like this,” Bailey said. “Educate yourself so that you know what the other side of the market looks like because 87 percent of real estate agents who get their license don’t have their license five years after they get it.”
While the market will inevitably change, Bailey doesn’t believe the industry will face a massive foreclosure crisis in the near future as it did during the Great Recession when the economic winds finally shifted.
There are foreclosures in every market, Bailey explained, but right now, 34 percent of households in the United States do not have a mortgage, 63 percent have positive equity and only 2 percent of homes in the U.S. have negative equity.
“If you look at it 10 years ago those numbers were opposite,” Bailey said.
The combination of low inventory with positive equity and mortgage rates that might creep up slightly but will continue to be near record-low means the housing market is still going to have a lot of opportunity for agents, Bailey said.
“Don’t furlough yourself,” Bailey said. “Talk to people — never a better time to call someone and say, ‘do you still like your house?’”