There are no Good or Bad Markets

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It’s funny hearing people talk about “the market” because I don’t quite know for sure what they are talking about, and more often than not- neither do they. Are they talking about the Salt Lake City market, the Utah market or the imaginary “national market” that only exists in the media.

And it’s interesting to hear people talk about good markets and bad markets. “This is such a great market” or “this market sucks!” are a couple examples. Well, what exactly is so great about it, or what makes a certain market suck? In a local real estate market like Salt Lake is in right now it depends on your price range whether it’s a buyer’s or a seller’s market, but above $300,000 it’s a buyer’s market, so what does that mean- is that great?

There are no good or bad markets because it’s all a matter of your point of view. Usually when people talk about the market being good or bad- it is from the view of the seller. Typically a “good” market means that homes are selling fast, while a “bad” market means that homes are not as easy to sell, meaning it is a buyer’s market. But if it’s a buyer’s market isn’t that good for the buyer’s? And if interest rates are really high and there isn’t much inventory plus nothing is selling then it’s probably a fantastic rental market.

Right now the Salt Lake City real estate market is going through a transition into a buyer’s market and to listen to some people it’s the end of the world. Because of higher inventory levels and tougher loan guidelines, seller’s are finding it more difficult to sell their properties, so they are frustrated.

Some of the frustration comes from people wanting the market to be like it was last year. And some of it is that so many agents got into the real estate industry during the last few years while the market was so hot (the Salt Lake Board of Realtors membership has more than doubled in the last three years) and expect that is just how the market always is, or at the very least don’t know what to do when the market doesn’t favors the sellers anymore. And much of the frustration comes from the media telling people that the market is “bad” or “slow” or whatever other headline superlatives they can dig up to create interest.

But here’s the thing- all these agents have homes for sale with all these sellers and they are all looking for buyers now. But we (my team of agents) have buyers. Because of our business model and meeting buyers through our websites, about 90% of our deals are on the buyer side. When this was a seller’s market it was easy to get buyers but tougher to get the listings. Now it’s easier to get listings (because there are so many selling and it’s impossible to sell FSBO) and the buyers are at a premium. So for us, this is a fantastic market- we love this market.

The amount of traffic to our websites is still rising and we are getting as many buyer leads now as ever. And now our clients have much more inventory to choose from and the prices are much more reasonable for them. For a buyer looking in the $400,000-$800,000 price range this is a great market. And if you are a seller that bought your home three years ago for $350,000 and now it’s worth between $490,000 and $520,000 so you sell it for $500,000 to get it sold, is this a good market because you made $150,000 or a bad market because you couldn’t sell it for $520,000?

It’s all in your point of view. Less homes are going to sell in the next twelve months so some agents think that means the market won’t be as good, but I disagree. I think if the number of sales decreases by 50% a lot fo bad agents will get out of the business and that’s a great thing. I’m not so concerned about the total number of sales in the market. As far as business is concerned- I look at it like this- whether 2000 homes or 500 homes sell next month I don’t really care. I just want to sell 20 of them- so whatever is left over is fine, I don’t need them all.

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Visual Aid of Real Estate 2.0 Companies

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If you’re wondering who the players are in online real estate today, you’ve just been given a new tool. 1000WattConsulting has put up a visual aid showcasing the top players in the RE2.0 space, complete with categories and links.

Real Estate 2.0 is like Web1.0 for the rest of the world because the real estate industry as a whole, didn’t really embrace the internet until about 13 minutes ago. And most Realtors and brokers are still confused about how the whole thing works. Understand, most real estate in America is still sold by agents who got the job because they either knew the seller or were referred to them. There are over 50,000 real estate agents who blog now, but there are over 2 million real estate agents. That’s less than 2.5% of the agents that are blogging. I read somewhere that 12% of agents have websites now, but most are crappy template sites (same website, different agent photo).

So this isn’t just a visual showcase of the Real Estate 2.0 companies, it’s a showcase of the innovators and pioneers in an industry that has long needed them.

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PS- Thanks for the nod…

(h/t to FoREM)

People Don’t Buy Homes Online

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I’ve been utilizing the internet to sell homes longer than almost anybody. My first real estate website was built back in 1998 (which might be considered Web.05) and featured a few spots where I could change the photos and info about homes and a few pages of clip-art and text. It was crude, for sure, but also high-tech and innovative back then. Heck, I was a broker with the first company (Prudential California) to ever accept a real estate contract on a house online. Site unseen, but the buyer had an inspection period to come see the home before the close was finalized.

Today I run a team of Realtors and have multiple websites that have flash, motion video, map-based search, Web2.0 looks and feel, consumer-generated content, self-updating information, virtual tours, online offers, and even property notifications by text message or email. Last week I brought some clients into the office to search for homes with me and the MLS was down so we jumped onto BlueRoof.com because the website takes the MLS info and downloads it onto my own servers twice per day so although we couldn’t access home info on the MLS, people in the office could still search for homes on BlueRoof.com. That’s all good stuff, but does it sell any homes?

My websites today are certainly much fancier than they used to be. They have a lot more stuff and they give a lot more information to the consumer (or agent) using them. But at the end of the day, when I sell a home it’s not because of my website, it’s because I did the work.

People meet me through the internet, but ultimately they want the same things I want when I’m shopping. They want someone to help them look at options, make a decision and coordinate the transaction. Whether I’m shopping for a car or for mutual funds, having solid professional help is what I want. And home buyers aren’t typically going to buy a home simply because they saw it online. They want to go out and walk through the home and see the location and hear about the area. They want to feel the space and listen for a train going by or a neighbors annoying dog that barks too much. And you need to be there to experience these things.

It’s become cliche to say “buy a home online” or “find your home online”, but the reality is that while people do find homes to look at while searching online, they aren’t actually buying their homes online. They aren’t sitting down in front of their computers and pulling out their credit cards to make a purchase. The reason good Realtors are selling as many homes now as ever is the same reason the internet has not disintermediated the Realtor from the transaction- people search online and find agents and inventory- and then they contact a Realtor to help them.

People are using the internet now more than ever to search for property, that’s for sure, but ultimately they aren’t finding homes online, they’re finding us.

Utah’s Mid-Priced Housing Market Softens, Lower Priced Market Stays Strong

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The housing market for homes priced between $400,000-$800,000 in northern Utah is showing signs of softening due to high inventory levels. We are not going through a correction or a decline, simply a slowing. The Salt Lake Tribune today reports that homes priced over $500,000 are being hit the hardest, which I can confirm. I listed a home for $509,900 two days ago and when I pulled comps there were hundreds of active homes in the area, in the price range that we need to compete against.

The media likes to play up anything they can, including a shifting housing market, but things aren’t usually nearly as dramatic as the media makes them out to be. The media is chicken little, running around screaming about anything they can, while I’m out in the field everyday seeing what’s actually happening.

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(Searching between $500-$700k on BlueRoof.com in the south end of valley returns almost 500 homes for sale)

In the lower price ranges homes are still flying off the market in days, many still getting multiple offers. Three of the homes I have listed under $250,000 in the last couple weeks sold within the first couple days at full price or more.

Some areas of town are seeing this more than others. The south end of the Salt lake Valley and the northern part of Utah county are seeing the most inventory in the $500,000 price range, making it difficult to sell in those areas. Even in Sugarhouse, where homes usually sell very quaickly, are sitting longer. I have two listing around $400,000 in Sugarhouse that have been on the market for more than a month. Our team just put one under contract for over $500K in Sugarhouse, but it was priced very well.

Looking at data from the MLS the number of active listings in Salt lake County has risen each week for the past two months and has increased from 5212 active listings on June 1st to 6984 on August 17th, representing an increase of 1772 homes, or a 35% increase in the last two months. That’s a lot of inventory coming on the market, and a lot of that is in the south end of the valley.

The average days on market has risen, but not by much (from 27 days in August 2006 to 33 days this year), showing that homes that are priced well are still selling fairly quickly.

Another sign of the softening market is that less people are trying to sell For Sale By Owner (FSBO), seeing their homes sit on the market longer and getting less activity. We’ve been having quite a few FSBO sellers contact us recently to ask about listing their properties, many have been trying to sell for months and are now realizing they may need a good Realtor now that the market isn’t a seller’s market like it was last year.

One listing I have at $1,250,000 in the south end of the valley has seen more activity than some of our homes listed in that mid-price level around $500k, even though there are more homes over $1Million on the market this year than last.

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The market continues to stay strong overall because of the nation-leading job growth and people moving into the area. And the area is still experiencing appreciation (probably 6-8% this year), with some area prices rising by more than 15% for the year, especially in the under $250k price ranges. The Deseret news has an article from yesterday saying the local market is still rosy.

Overall, it’s a good time to buy in the Salt Lake area because there is such a great inventory, prices are steady and sellers that need to sell are pricing their homes accordingly, and with the job growth and influx of people moving into the area we should see a good, healthy growth and appreciation over the next few years. It is still very easy to qualify for a loan and first time home buyers would be wise to buy now and have their money work for them instead of throwing it away on rent.

For the latest area stats see chart.

Where are all the Singles- 2007?

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Money magazine has it’s new list out with Best Places to live and such (the Best Places is a compilation of smaller cities). The top Utah city on the list was Cottonwood Heights at #100. I live in Cottonwood Heights and I think it should be much higher, but it’s not my list…

They also claim that you’ll find the most singles in State College, PA, Durnam, NH, and Amherst Center, MA (all college towns of course). But they might all be fatty’s as the skinniest people live in Marin (north of SF), Blaine(Idaho), La Plata (Idaho), Teton (Wyoming), Garfield (Colorado), and the last two counties I lived in San Francisco (CA) and Boulder (CO)counties.

Counties with the fastest growth over the last 6 six years has three northern Utah counties at the top with Tooele county (next to Salt Lake to the West) at the top spot with 112.5% growth (!), followed by Summit and Wasatch counties (next to Salt Lake to the East) at #4 and #6 respectively. I have a feeling Salt Lake county might be making the list soon with all the jobs we have coming into the county.

The youngest list is obvisouly a list of towns, not counties, or Salt Lake would again be at the top. But for youngest towns, northern Utah had three at the top, with Eagle Mountain (#12), Cedar Hills (#16), and Oquirrh at #23.

There’s No Room at the Top for Wimps

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We’re all prone to having our moments of weakness, where things aren’t going our way or everything seems to be falling on us at the same time. Especially in a sales industry like real estate, with the financial ups and downs and the pressures that come with it, it can be draining emotionally.

Sometimes I need to retreat and spend time with family just to keep my sanity. Sometimes the pressure turns to anxiety and it’s tough to stay focused on the road ahead. But I know that’s precisely what I need to do to make things right and take care of my responsibilities.

This is one of the traits that I believe seperates those at the top of their game from the rest- the ability to focus under pressure. We’re all busy and we all have pressure, but it’s what we do with that pressure that makes the difference.

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Do you fold under the pressure or do you focus?

Most people fold. They crumble and become less useful in every area of their lives. Most people have the inherent flaw of retreat during those times that they are most needing to perform. But in business this causes anxiety and stress and simply furthers the problem. Curling up into the fetal position and bawling like a baby will not help things get better, and while I can understand the natural tendency to do so, and can even relate to some degree- I keep a discernable barrier from the emotion of it all because I choose a different way of handling my pressure.

I see people throwing their hands in the air and giving up all the time in this business- sometimes for a day or a week and sometimes for good. People leave the business or go into hibernation because a deal went south on them or several deals fell apart at the same time. Or because they are going through a tough stretch with no business.

I have these same stretches where business seems to flow in rapidly and times when it seems like things are slowing down. When things aren’t coming in though, I go out and I get business. And I think others who are at the top of their game, and the best in their fields do the same. They get out there and they take the bull by the horns and get things done.

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-If you find a man at the top of a mountain, he didn’t fall there-

I don’t know who first said it, but I like it. Here are some things that I personally do to push through pressure…

Stay flexible in my approach but focused on my result.

I decide what the result is that I want and become determined to make that result happen no matter what. It’s imperative to stay focused on the result I am looking for so I have direction and a way to clearly see whether or not I am moving toward that result.

My approach might change several times. Think of water finding it’s way down a canyon side. It’ll change direction a bunch of times but eventually it will find it’s way to the lowest ground- and that’s how I look at my approach and the way I reach my result. If something isn’t working I’ll change what I’m doing and then change again and again as long as I’m moving toward that result.

Take time.

When things catch up to me and the pressure gets heavy I take time, maybe ten minutes, maybe two hours, to relax and clear my mind so I can return to the issues from a different perspective. Sometimes I’ll go to a movie in the middle of the day to forget about everything for a while and then when it’s over I’m calm and can look at things again more clearly. Sometimes I take ten minutes and sit at a park or at home in silence and just think about the stillness and how big the world is around me and remember how small these problems are to the rest of the world. Somehow putting things in perspective against time and history helps me look at them in a better frame of mind.

Utilize my energy.

The pressure and stress I feel is all energy and I can choose to take that energy and use it to make me move. Sometimes I take that energy and turn it into anger because anger is such a strong emotion. I wouldn’t suggest doing this unless you can compartmentalize well (as I do) so you don’t end up taking out stress on those around you, but I’ve been able to take my energy and use it to get me off my butt and out there working.

Swallow my pride.

Sometimes I don’t want to do the work because I don’t like it. I don’t like cold calling or knocking on doors anymore than the next guy, but when I need business I’ll go out in the rain and knock doors asking for business if I need to. I’ll call five hundred people in a day or hand out business cards to everyone I come across that day. There are usually more productive ways to spend my time, but I will exhaust every option and do whatever it takes to keep things going strong. This is the business I am in- sales. And in sales I am responsible for my own success- I have to go find it and that’s what i signed up for when I took the career I did.

Reach high.

I don’t suffer from low amibition. Sometimes I like to take a break and spend more time relaxing, but I keep my standards high and I maintain results that I can be proud of. Some people reach their goals well, but their goals are far too low for their ability and situation. Hey, if you need more- go out there and get it. Having high standards motivates me and keeps me from being feeling average.

Don’t whine.

I can’t stand when people stand around whining about how unfair things are and expect their lot in life to improve without putting in the work. Don’t stand there and shout about it- get up and do something about it. I’ll raise my voice if I think it’s going to help my cause, but I’m not going to complain just to complain- I’ll have a solution or some opinion I think will help the discussion. Whining is for suckers and the people ot the top of their game don’t have time for it.

Keep my frame of mind.

It’s important for me to stay in the right frame of mind and sometimes that means to just toughen up and stay numb to some of the distractions. I try to remember my talents and why I believe in myself. Not affirmation- dedication. And this can make all the difference in the world for me.

There will always be people out there that does more business than I do and make more money and have more time and blah blah blah- so what? I work hard because it makes me feel good taking care of my family and having success. And I like my work. Big reward often comes with big risk, and being in a commission-only sales position is risky, but rewarding for those who get off their butts and take charge of their career.

No matter what area of your life you find challenging right now- decide to change it and go do the work. If you expect to reach the top, any “top”- your “top”, whatever that is for you, you can’t be a wimp getting there.