The booming real estate industry is the healthiest it’s been in the last 30 years with home sales and prices near where they were during the housing boom — and there’s none of the drama involved due to a more stable economy. So what’s in store as the industry looks ahead to the year to come?
Sales and interest rates will likely increase
The National Association of Realtors (NAR) predicts sales will increase by nearly four percent in 2018. Additionally, interest rates are expected to creep up as well — however, they’ll still be considered low, compared to historical levels. If you have qualified buyers who are on the fence about purchasing, use this opportunity to encourage them to purchase before mid-year so they can take advantage of these lower interest rates.
Millennials may continue to put off purchasing a home
The percentage of first-time buyers fell slightly in 2017, according to NAR. One reason is many millennials are feeling financial pressure from student loan debt, coupled with relatively low wages, which makes it difficult for them to put a downpayment on a home. Millennials who may be interested and qualified to purchase now may find it difficult to do so. In pricier markets, many feel squeezed out of the market and unable to purchase even a so-called starter home.
Low inventory, especially for new homes
While there may be a 3.9-month supply of homes, according to the most recent monthly report from NAR, we’re approximately 250,000 units light on what is necessary to meet the 50-year average annual demand level for new construction. The pressure will be felt more strongly in certain markets, however the overall speed of the housing market will act as a stabilizing force. The good news is that single-family housing starts are projected to increase more than nine percent in 2018, according to the U.S. Census Bureau, which will ease pressure in many areas.
What can you do to leverage these trends?
Regardless of what’s going on in the market, there are three things you can do now to serve the clients in your database:
- Connect. The clients in your database are better than any lead you can buy. Take the time to connect or check in with them. Offer them a free comparative market analysis of their home and remind them you’re never too busy for their referrals. The more you develop your relationships with your clients, the fuller your pipeline of leads will be.
- Serve. By providing your clients the highest level of service, you’ll stand out from your competition in your market. After you speak with a client, write them a personal note to say you enjoyed catching up with them. This seemingly small gesture has a big impact on your clients.
- Learn. A true professional never stops learning — they continue to grow their knowledge and skills, even when they’re at the top of their game. In fact, it’s because they’ve committed to learning that they’re able to achieve success in the first place. Focus on sharpening your skills this year. Read books from influential business people and thinkers, listen to podcasts and sign up for seminars that can help you enhance your skills and knowledge and network with other top producing real estate professionals.
When you focus on providing clients great service, you can differentiate yourself in your market to thrive in 2018 and beyond.