Please welcome AG’s newest contributor Mike Simonsen, CEO and Co-Founder of Altos Research, which offers live real-time real estate research. Mike is the reason you see live data graph widgets on the nation’s top real estate website and he’s the reason financial firms and traditional news sources have reliable information. Mike is a frequent public speaker (at Inman and elsewhere), is very active in social media and you can even find him on Twitter. Please welcome Mike in the comments.
On Wednesday, NAR announced that home prices fell again in January to a national median price of $170,000, sales rates fell again to their lowest level in years, and nearly half of all transactions are on distressed loans.
“Everyone knows the real estate market sucks, right? Why would I ever want to publish the bad news to my clients?”
I get this question from real estate agents all the time. Also common is it’s omnipotence-begging cousin, “Can’t you make the chart go UP for a while?”
The underlying fear is, “if I talk about the market, no one will buy or sell anything.”
Newsflash: This is precisely why market data matters. In general the market sucks and everyone knows it. But I’m not in general. I have a home to buy (or sell) in a particular price range, in a particular part of town. I have a timeframe. I have investment goals. Market data helps me understand my unique situation, sets my expectations, and compels me to take action.
We tell people there are only three questions in real estate:
- What’s for sale?
- How much is this home worth?
- How’s the market?
Our industry is well tuned to answering the first two. You have your MLS, your IDX search on your site, open homes etc. You have CMAs, appraisers, and your professional opinion on property valuation. Heck you can even see the big real estate 2.0 web players focused on these two questions.
But all the other questions stem from #3. And with all the craziness out there, these are now the most important questions you can address: “How long is this going to take?”, “We like this place, do we have to make an offer today?”, “I’m thinking of buying, shouldn’t I just wait and see?”, “Why should I listen to you about where to price my home (I want to try higher)?”
Remember that real estate data is not about communicating the “good news.” It’s about illustrating why your recommendation makes sense. It’s about helping your clients see the path to their goal. In fact, the most important phrase that real estate statistics provide is: “Let me show you what I mean.”
So let me show you what I mean.
Last week the inimitable Russell Shaw posted a letter from John, an agent looking for advice about his business. Russell distilled John’s problems to:
1. Most listings currently being taken are not selling
2. Zero buyer deals in escrow
3. Overall market has changed enough that “comps” are now meaningless
4. Not enough time left over to work on organizing for the future
Russell describes these conditions as fundamentally pricing issues – and the business challenge to get the seller to accept price reductions 2,3,4 or 5 times. I’ll add the corollary that detailed market data is the way to illustrate the strategy, the urgency to the client – to compel the client to take the right action. In this case I would illustrate to the client these statistics:
- The days-on-market trend for properties in this price range. (“Look, it’s taking 7 months for anything to sell, because the only buyers are bargain shopping.”)
- Percent of properties on the market with price reductions (“This is what your competition is doing. We can be ahead of this curve or behind it.”)
- The magnitude of those price reductions (“Let’s look at how aggressive we need to be. Really.”)
The great news is that you already know the story your clients need to hear, the strategy they need to take. (Or you can visit the sage Mr. Shaw for inspiration.) Statistics and data are not the source of this strategy. They are merely the map, the illustration, the evidence of your expertise. After all, in these unprecedented times, wouldn’t a map come in handy?
“House has spark” – burning up the MLS with typos and other bloopers
The year is starting a march toward its natural ending, friends…and it seems a few real estate careers may be also. This week I found some real head-scratchers in local real estate ads and the MLS. However, I get submissions from all over the U.S., so no one is safe from the eyes of the Blooper Scooper. Check out these blunders:
Do You Smell Smoke?
“House has spark” (Apparently your real estate career isn’t the only thing going up in smoke.)
“Big pep area in kitchen” (Is that the cookie jar where Mommy Dearest stashes her uppers?)
“Dull Viking ovens” (Methinks there’s something in the cookie jar that will perk up those dull Vikings.)
“Large greenhose in back” (Large, naked Jolly Green Giant in yard.)
“Mush added to this house” (Was that the overflow from between your ears?)
I Think I See Flames
“Beautifully remolded guest” (Another cosmetically-altered Barbie hits the Hollywood party circuit.)
“Enjoy a drink poolslide” ( Hell, if the pool is sliding, I’ll need a whole pint of Jack.)
“Each bedroom has own bedrooom” (Hello-o-o, Alice, how are things down there in the rabbit hole?)
“Separate pod to build GH” (That should please my pea-sized buyers.)
“Play room for the kiss” (Something tells me this is the back seat of a ’67 Chevy.)
“Ideal for gusts” (That’s great…if you want to live in a wind sock.)
“Impaccably detailed” (Incredibly challenged)
“Stylish pewder room” (Try burning a match.)
“Stone pillars flake driveway” (Flakey agent got stoned in driveway.)
Nothing But Embers (This Week’s Fave):
“From a bygone error” (You have just written your own epitaph.)
“New bd pans inc” – Making a Splash on the MLS
I have two things to say this week: 1. When you drink, you can’t think. 2. When you drink you can’t- … uh, what was I saying? Oh, yes – the MLS. It was so full of bloopers this week that I am led to conclude that happy hour started Monday and never stopped. Read these and tell me if it is any wonder I was driven to throw back a few martinis myself:
Booze ‘N’ Fools
“Free membership to gin inc” (It seems someone else beat us to it, Martini Mary.)
“Grab now use imagination” (That’s what Arnold said to his housekeeper.)
“House has new edition” (Agent lacks erudition.)
“Babblying broke runs in back” (Bumbling buffoon runs amuck.)
“Drop by for cocktail ho” (Oh, is the Sunset Strip for sale?)
Puff ‘N’ Stuff
“Near Sacramento airpot” (I believe his name is Jerry Brown.)
“Claw me for selling” (I’m too busy clawing my eyes out over your spelling.)
“Reduction on mid-century ner Holywod” (Another mid-sixties porn star is looking for work.)
“We can sake your home” (Can I get fried rice with my sake?)
Proof or Goof
“Nice streem” (Said Grandma to Grandpa after his diaper exploded.)
“Nice for dog kids” (Uh, they’re called ‘puppies,” pal.)
“New bd pans included” (Thank you, Nurse Nancy – can you warm those first?)
“Good stable in neighborhood.” (Have you contacted Mary and Joseph?)
“Drawing for plasma” (Is this a blood-bank?)
And This Week’s Winner Is:
“Good school in areola” (Thanks for keeping me abreast of things.)
PROOF OR GOOF, FRIENDS – I’M WATCHING EWE 🙂
My secret office organization tip – Sharpies and tape
If you’re still practicing to be OCD, here is a secret I don’t typically share with anyone, but I’m willing to share with you today…
I used to be obsessed with the P-touch machine. I labeled everything. Drawers, shelves, folders, canisters, and anything that I could think of putting a label on.
But the label makers weren’t as pretty as my own handwriting and didn’t come in every color a Sharpie does, so I got the brilliant idea one day to write in light blue sharpie in my beautiful handwriting on clear tape, placed neatly on the shelves in the pantry. Visitors thought I had written on the cabinets, “what if you have to move things?” they asked. “It’s just tape, look!” I said as if I was performing a complicated magic trick.
Not just shelves!
It’s great to use this tip on files and folders so you can reuse them (especially if you have custom files or designer files), on drawers at the bottom of each section where pens and tape goes, and especially in the break room.
No more label maker, no more refill cartridges and no more mess, especially someone else’s mess! Trust me, this is an OCD person’s dream organizing tip!
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