By Tracy Wisneski
After a few years of a white-hot market with historically low inventory and interest rates, we’re transitioning to a more “normal” market. This presents both challenges, as well as opportunities.
Setting Seller Expectations
Setting client expectations is arguably among the chief duties (and values) of REALTORS®. Sellers rely heavily on our knowledge of an ever-changing market in order best position their homes for sale and successfully maneuver negotiations and closing. In a shifting market, that duty is even more important. Many sellers are still expecting at least 10 percent annual gains,multiple offers and closings in less than a month. Know your market, keep pace with changes and educate your sellers accordingly. Your value is even more prominent now.
For sale by owner will be feeling the pinch
REALTORS® know there is a great benefit to our services in any market, even a strong seller’s market. However, during a more normal market, it’s even more challenging to sell a FSBO. As their days on the market increase, they are more and more likely to list with a professional. Brush up on your FSBO converting skills and increase your listing inventory.
Should Sellers List First or Find a New Home First?
It’s always a little tricky when a homeowner must close on his or her home before buying their next home. Market timing is important to consider when making these decisions and this market shift requires a change in strategy. Many homes are taking longer to sell now, so it may be prudent for some sellers to list their homes for sale or even have a contract first before submitting offers on something new.
However, well-priced entry level homes in good condition are still in low supply and high demand, so in some markets, those sellers may do better to search for their new home first before putting their house active on the MLS. Know your market and share that experience with your clients. Help them consider various options for going from one home to another.
New Selling Models like Opendoor and OfferPad
These selling models have made their way to the Tampa area and they’re picking up quite a bit of listing inventory from sellers who’d prefer to not go through the traditional listing process. With this additional competition, it’s important for REALTORS® to be clear on the value they bring to the transaction, and how it is unique from the other options available to sellers and buyers.
Expireds are back!
While buyer demand was far outpacing supply, expired listings fell to the bottom of the lead pool. Precious few listings were expiring at all, and the ones that did expire were extremely difficult to sell for one reason or another making them far less desirable. In 2019, expired listings are once again a viable lead option.
Rising Interest Rates
Rising interest rates not only affect the pace of the market, they also directly affect how much house buyers can afford. It’s very important to be sure that your buyers have updated pre-approvals and estimates that reflect the current rates. If you’ve been working with buyers over several months, it’s important to guide them to update their approval and get a new estimate.
The good news is that there are various loan products, so if you’re communicating with trusted lenders, you’ll be well positioned to help your buyers identify the best loan for their needs.
Rents in the Greater Tampa Area are rising at a much higher rate than the national average. St. Petersburg leads the pack with a 7.2 percent Year over Year (YOY) increase, Tampa rents went up 5.2 percent YOY, Brandon’s YOY increase was 5.6 percent and Lakeland rents went up 6.5 percent, according to a 2018 report by RENTcafe*.
While that is problematic, it is also an opportunity to convert renters into first time buyers. The Tampa area remains a market where it is more affordable to own than to rent. Consider how to get that message to the right renters, and you will increase your pool of buyers.