The National Association of REALTORS® (NAR) Power Broker Roundtable this month discusses adapting business strategy to today’s economic climate.
Moderator:
Robert Bailey, Broker/Owner, Bailey Properties, Santa Cruz, Calif.; Liaison for Large Residential Firm Relations, NAR
Panelists:
Nelson Zide, Executive Vice President, ERA Key Realty Services, Framingham, Mass.
Chris Kutzkey, Broker/Owner, John L. Scott Real Estate, Yreka, Calif.
Linda Formella, Broker/Branch Manager, Michael Saunders & Co., Holmes Beach, Fla.
J.D. Rinehart, Broker/Owner, Rinehart Realty, Rock Hill, S.C.
Robert Bailey: According to a recent survey by “Business Roundtable,” rising optimism about the nation’s economy is putting smiles on the faces of conservative corporate leaders in a wide variety of businesses. What does it signify for the real estate market, where, for the most part, we have been dealing with low inventory, tough access to credit, and a generation of hesitant and demanding first-time buyers? We thought this might be a good time to survey some of our own industry leaders to get their take on the state of the market—and find out whether their business strategies are changing in response. Nelson, what’s it look like in the great Northeast?
Nelson Zide: Well, you put your finger on the crux of it, Robert, especially in terms of low inventory. Changing economics aside, our focus is still on listings. We want our agents out there showing people that they can afford to move—that they have more equity than they think they do in their present homes—and that the longer they wait, the more it will cost as prices and interest rates tick up.
Chris Kutzkey: What’s decided in D.C. has a definite impact, and there are a lot of Congressional unknowns at the moment that could affect rates and loans. For the most part, though, our strategy is not yet changing. We have a rather indecisive market in our mostly rural area, and it’s vital that we train our agents to know the differences between far-flung communities and go after the elusive listings we know are out there. Today’s buyers and sellers think they know everything because so much information is available to them online, so it’s more necessary than ever to know your market, to get out there and knock on doors, and to be immediately responsive when calls come in.
J.D. Rinehart: There’s no question interest rates will go up, but life events still keep people moving—and the simple fact is that in 90 percent of the United States, it’s cheaper to buy than to rent. We want our agents spending 99 percent of their time reaching out to their sphere of influence. In a sense, the new “knocking on doors” is social media, but great marketing, no matter how you do it, is more important than ever.
Linda Formella: On the West Coast of Florida, I’m pleased to say, we’re looking at an uptick in available properties, but with summer coming, our busiest season is over and sellers are a bit more anxious. We are making certain our agents do careful price analyses to be sure the pricing is right. As for loans, we are not really a first-time buyer-friendly area. Our appeal is to retirees and second or vacation homebuyers, so loans are generally not a problem. Also, we put a lot of time and effort into targeted marketing, so as long as rates don’t rise dramatically, we see no reason to change strategy.
RB: What about underwriting?
CK: It’s calmed down a little, I’m glad to report, and as Nelson mentioned, many owners now have more equity than they realize. We’re pushing our agents to get out in the community, talk to people, educate both buyers and sellers.
JDR: That equity means a lot of people can afford more “move-up house” than they thought—and part of the process of educating consumers is helping buyers understand how to set themselves up for the loan process.
LF: The real estate market is always cycling, but overall, lenders are more approachable than they were even a year ago. So long as rates rise slowly and the home interest deduction is preserved, I think we’re looking at a very encouraging real estate climate.
RB: As you know, both of those are issues at the very top of NAR’s Congressional watch list. It’s good to know they’ve got our backs in protecting American homeowners.
NZ: The good news is, millennials these days are out there looking in greater numbers. They’re picky, and they know what they want, but we’re seeing as many as 40 or 50 people at some of our open houses and we’re fielding multiple offers. In most cases, these first-time buyers do have the resources, and they’re coming in fully preapproved—so again, the emphasis for us is getting sellers off the fence and finding more inventory for people to choose from.
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