Marketing
My Concierge is at Walmart. Where’s your’s?
August 8, 2012
A new brokerage came into the Valley is launching a new and interesting campaign.
Opening an in-store location in the Walmart on State Street in Boise, West USA Realty is going where no one has gone before…(Sear’s experiment with in-store real estate offices in the 90’s doesn’t count).
West USA Realty with broker Tim Bassett is located just to the left of the main Walmart entrance, by the Bronco’s Store in arguably the highest retail foot traffic zone in the Valley. Standing in line it is impossible to miss the huge blue “Walk-In Location” sign above their space.
The Idaho Business Review did a story on this on August 3rd: “Big Ticket Item: Shoppers can pick up a home in this Walmart.” Not exactly.
Its clear from the story that the reporter hand a preconceived notion of the “typical” Walmart shopper not being a candidate for home ownership. Having spoken with Daniel Frydrych, Vice President of Franchise Development for West USA Realty, I can tell you that they know that lots and lots of home buyers and sellers shop at Walmart. They currently have successful franchise locations in Walmarts in several western states.
So there is no argument that they’ve got a huge number of “eyes on product”.
Let’s look at what they’re offering. Many studies suggest they are offering exactly what consumers want….a high touch concierge that is there when they want them.
We know today that practically everyone starts they’re real estate deal on line. Then what? If they’re like you and me, they have to stop looking to do something else; feed the dog, take their kids to soccer, buy groceries…stop at Walmart for 100 rolls of paper towels.
Standing in line and fretting about how many more things they have to get done before they can go back on line and look at houses, they look up and see a big HD screen showing beautiful listing photos and a friendly professional looking agent smiling back and a sign that says “Walk In”. I’m going in.
One our industry’s biggest problems is dropped leads. For whatever reason a call does not get returned or an email gets deleted and the consumer is left out in the cold. Once we can begin engagement with a consumer they usually stick with us.
Think about the last time you were in a hotel in another city and wanted to know where to go to dinner or how to go to a show. Sure you probably looked at Yelp or Urban Spoon or Fandango before you got there, but as you walk through that hotel lobby there’s the Concierge desk with someone to offer to personally help you…and they know the answer.
That’s what I think this can become.
The first challenge for Tim and his crew will be to make good on their offer to provide outstanding professional service from the first moment to EVERY person who asks for it. No prejudging based on what the person is wearing or if he shaved that day or any of the other characteristics of the popular YouTube “People of Walmart”. This will take a lot of discipline.
The second challenge will be to employ creative social technology to engage the consumer to reinforce the concierge mindset. Once I get home from my shopping I’m going to want the same level of service on the website as in the store.
According to Tim they’ve already taken a few listings; one for $350,000.
Don’t forget…this model is already working in several other states…and Walmart is a smart company. The continue profitable ventures and eliminate those that aren’t.
I talked to the Walmart Manager (he’s been on the job for 3 weeks). Walmart believes this is going to be a great thing for West USA Realty and Walmart.
Best of luck to our new neighbor.
Read Full Post | Make a Comment ( 1 so far )
March market report…I told you this was going to happen.
Sales in March 2012 were 515 in Ada County, a decrease of 2.2% compared to March 2011. Year-to-date sales are 1,353; 7.2% over the first three months of 2011.
Even though sales were down a little; dollar volume for March was up 7%…(more on this in the “Median Price” section below)
Historically, March sales outpace February by an average of 30%. March 2012 sales increased by 17% over January 2012…(more on this in the “Inventory” section below)
Nationally we know that one job is create for every two homes sold. With 1,353 sales so far in 2012 we have helped to bring 676 jobs to Ada County. We also know that for each homes sold there is a $60,000 cash infusion to the community; based on YTD sales we have added $81Million to our valley’s economy so far this year.
Of our total sales in March… 43% were distressed….down 1% from February 2012. In March 2011, 58% of our sales were distressed. REO sales were a little more than half of all distressed sales and short sales were a little less than half.
Pending sales at the end of March were 1,134; an increase of 16% from the end of February. In general pending sales increase in strongly in March compared to February; and should continue to increase all the way through April or May. The percentage of pending sales in distress decreased 8% from February, totaling 33% overall. This is our first month below 40% in several years. Of Pending Sales in distress, short sales outnumbered REO’s 2 to 1.
At the end of March, we had 23% more sales pending than at the end of March 2011.
February median home price was $154,900; up 14% from March 2011; and down 2% from February 2012. Median home price is up 22% since January of this year.
New Homes median price for March was $201,558; an increase of 6% from March 2011.
The number of houses available continues to decrease. At the end of March our total active inventory was 1,879 homes. This is down 3% from February and 29% less than last year at this time. The last time we had an active inventory this small was in December of 2001! Interestingly enough…sales for that month in 2001 were 517…essentially the same is March 2012.
At the same time, the percentage of distressed active inventory dipped 1% to 33%. We have been hovering between 33% and 36% for the last year. We remain well below the 40% levels set last spring….when we were on the increase. Of our Distressed Inventory 91% is Short Sales and only 9% is REO.
In Ada County we now have less than 4 months of inventory on hand…3.9% to be exact.
The price category in shortest supply is <$119,000 with 2.3 months. In the range of $120,000 to $159,999 we have 3.1 months. All price points up to $250,000 have less than 4 months supply. We have benefited for nearly two years from inventory levels much lower than national average. Now, however, we are seeing a measurable slowdown in sales as the inventory continues to fall. Multiple offers are much more prevalent; now becoming the norm.
REALTOR® Magazine online offer great insight into managing multiple offers with theirNegotiating Toolkit.
Based on March sold data, our most desirable price point is <$120,000 at 30% of all sales. The next largest price point sold is $120,000 to $160,000 which accounted for 24% of total sales. The biggest increase was in sales between $200,000 and $250,000; which were up 100% from January 2012 to 18% overall.
Comparing Sales to Inventory, for key price points… @<$120,000 we sold 50% of all that we had in March; for $120,000 to $160,000 we sold 33% of all that was available; for $160,0000 to $200,000 we sold 32% of the total available.
Translated to a retail metaphor…the shelves are getting pretty bare.
There is no longer any doubt that, in Ada County, we are exiting our “recovery” mode and are full into “acute inventory shortage” mode.
The challenge to our continued recovery is available product. To all of you builders out there…please come back. Sorry about the last few years. We really need you now.
There continues to be broad speculation on the impact of REO properties coming onto our market in a way that would upset our continued recovery. The level of consumer demand, and the nearly bare cupboards of home inventory suggest that we will be able to withstand the impact.
Read Full Post | Make a Comment ( 4 so far )
Our 5-Point Housing Solutions Plan
NAR worked with two well-respected policy think tanks – the Progressive Policy Institute (PPI) and the Economic Policies for the 21st Century (e21) – that organized and conducted a policy meeting on October 4. New Solutions for America’s Housing Crisis brought together policy leaders, industry representatives, Members of Congress, thought leaders and the media to present ideas and make actionable recommendations intended to stimulate the growth necessary for a sustained recovery in housing and extend an ensuing positive effect on job creation and the broader economy.
It’s no secret our nation’s housing markets remain depressed and continue to suffer. While no one thought the crisis would carry on so long, markets are slowly recovering and are in need of immediate policy solutions to address the myriad challenges in order to stabilize housing and support an economic recovery.
We have long maintained that the key to the nation’s economic strength is a robust housing industry. And, we remain steadfast in our belief that swift action is needed now from Congress and the Administration that could directly stimulate a housing recovery.
NAR unequivocally endorses many of the bipartisan ideas and recommendations that came out of the meeting and we wholeheartedly urge Congress and the Administration to undertake their consideration promptly.
In letters sent Oct. 24, 2011 to the Chairman of the Federal Reserve Bank, President Obama, and Congress, NAR provided recommendations and solutions to stabilize and revitalize the housing industry and economy:
Recommendation 1: Do Not Risk Weakening Our Nation’s Housing Markets Any Further
- Recraft the Qualified Residential Mortgage rule mandated by the Dodd-Frank Act to include a wide variety of traditionally safe, well documented and properly underwritten products. Requiring a 20% down payment coupled with stringent debt-to-income ratios and rigid credit standards – as defined under the proposed rule by six federal regulators – would be detrimental to prospective home buyers, especially first-time and middle-income buyers.
- Restore higher loan limits supported by FHA and the GSEs to provide liquidity in housing markets and to assure mortgage financing options while stabilizing local housing markets. On September 30, the loan limits in 669 counties and 42 states declined. Already, this has had a harmful impact on our fragile housing recovery. Sellers have had to lower their price in markets where mortgages backed by FHA and the GSEs are no longer available. Buyers are confronting higher mortgage rates and larger downpayments because only private mortgages are available in these high-cost markets. In some instances buyers have given up their home search entirely.
- Resist proposals that call for changing the tax rules that apply to homeownership now or in the future. Without a doubt, now is not the time to change the mortgage interest deduction or any other housing incentives. Making gradual or targeted changes would send the wrong signal further undermining confidence and further depressing home values.
Recommendation 2: Restore Vitality to Our Communities and Neighborhoods by Reducing the Foreclosure Inventory
- Support S.170, The Helping Responsible Homeowners Act, sponsored by Senators Barbara Boxer (D-CA) and Johnny Isakson (R-GA). Their bill would remove refinancing limits on underwater properties for borrowers that have been paying on time, and would eliminate risk-based refinancing fees charged by Fannie Mae and Freddie Mac.
- Support bipartisan Senate efforts calling for improvements to the Home Affordable Refinance Program (HARP). Led by Senators Barbara Boxer (D-CA), Johnny Isakson (R-GA) and Robert Menendez (D-NJ), the time is appropriate to enhance HARP and provide refinancing opportunities to at-risk borrowers as an alternative to defaulting on their mortgage loans.
- Direct Fannie Mae, Freddie Mac and servicers to prioritize short sales above foreclosures.
- Support all necessary foreclosure/loss mitigation efforts to keep American families in their homes. Reology Corporation’s President and CEO, Richard Smith, has proposed a debt for equity approach to help underwater borrowers in trouble keep their homes and lower their monthly payments while lenders take a smaller hit than they would have with a default and foreclosure. We call on Congress to introduce legislation adopting this innovative proposal.
Recommendation 3: Open Opportunities for Private Capital to Return to the Mortgage Marketplace to Foster New Demand among Responsible Homebuyers
- Open up the FHA Section 203(k) rehabilitation loan program to investors to encourage purchasing of foreclosed property. This will facilitate the rehabilitation of the existing housing stock and help reduce the inventory of foreclosed homes.
- Require the GSEs to temporarily suspend investor financing limitations, especially the limit on the number of mortgage loans allowed for any one investor/borrower (currently 4 for Freddie Mac and 10 for Fannie Mae). This will give small, private investors the opportunity to absorb some of the excess inventory, resulting in the stabilization of prices for existing real estate-owned (REO) properties.
Recommendation 4: Support a Secondary Mortgage Market Model that Includes Some Level of Government Participation
- Reject proposals that call for full privatization of Fannie Mae and Freddie Mac. This is not an effective option because private firm’s business strategies will focus on optimizing their revenue/profit generation. This model would foster mortgage products that are more aligned with the businesses goals than in the best interest of the nation’s housing policy or the consumer.
Recommendation 5: We Call on the White House to Hold a National Housing Summit to Articulate a New National Housing Policy and Move the Provision of Housing to the Front of the Nation’s Domestic Agenda
- Homeownership matters! It represents the single largest expenditure for most American families and the single largest source of wealth for most homeowners. The development of homeownership has a major impact on the national economy and the economic growth and health of regions and communities. Homeownership is inextricably linked to job access and healthy communities and the social behavior of the families who occupy it. We recognize the serious public debate as to which tax and spending policies will best support the sound fiscal management that our nation requires.
- However, we urge caution against dismantling or eliminating vital resources for housing that provide important economic, social, and societal benefits. We call on the White House to empanel a body comprised of public and private industry participants to fashion a national housing policy that is flexible enough to address the varying needs across the nation, whether it’s homeownership or rental housing, production or preservation.
In conclusion, we emphasize again the recovery of the broader economy depends on housing. The last two and a half years have shown that, with housing prices bumping along the bottom, a robust economic recovery will remain exceedingly difficult. The National Association of REALTORS stands ready to work with Congress and the Administration to move this 5-point plan to help restore housing and grow our economy.
Read Full Post | Make a Comment ( 1 so far )Hip hip hooray…July Market Report gives us something to celebrate.
July sales were 564 in Ada County, an increase of 42% compared to sales in July 2010…yep…that’s right 42%!
Historically, July sales are 9.75% below June levels. July 2011 had 8.6% fewer sales than June 2011.
I am really happy to report that year-to-date 2011 sales, which total 3,580 are ahead of YTD 2010 sales; 3,524. As of the end of July we are 56 units ahead of year-to-date 2010! That’s a 1.5% increase.
Of our total sales in July… 42% were distressed….down 5% from June 2011. In January 2011 57% of our sales were distressed. (Short sales 15% and REO’s 27%). Distressed sales continue to cast a long shadow over the market, but they are no longer the “majority” of transactions!
For homes sold in July, the average number of “Days on Market” was 79. This is down from 89 days last year this time and down from 93 days in January 2011.
Pending sales at the end of July were 937; and decrease of 3% from the end of June. Looking back at pending sales from March 2011 to July 2011, we see an average near 1,000 at the end of each month. This is another sign of the long term recovery we are experiencing. The percentage of pending sales in distress was essentially unchanged from June, totaling 43% overall. We are now at four consecutive months below 50%.
July median home price held on to gains made in June. Overall median price was $152,750; down 6.6% from July 2010. This is the second highest median price we’ve had so far this year.
New Homes median price for June 2011 was $212,000; the same as June 2010.
The number of houses available for sale at the end of July stayed below 2,600 for the second month in a row. This is down 2% from June and 33% less than last year at this time. Currently available inventory compares to early 2006.
At the same time, the percentage of active inventory that is distressed dropped almost 1% from June to 33%. This is the fifth consecutive monthly decline and keeps us below the 40% levels set last spring….when we were on the increase.
In Ada County we have 4 months of inventory on hand…historically this number defines a strong “seller’s market”. The price category in shortest supply is <$119,000 with 2.8 months available. This is closely followed by the $200,000 to $249,000 with 4 months. Consumption of inventory is expanding to all price ranges. In the price ranges from $250,000 to $499,000 we have less than 6 months of available inventory. These are the lowest numbers in more than a year!
There is also positive news on some of the higher priced inventory; $500,000 to $699,999 inventory dropped for a third month in a row to 7.2!
We continue to “benefit” from inventory levels much lower than national average.
So…what about the impact of the last few days on our recovery? That sort of depends on who you’re asking.
This morning the Wall Street Journal headline is: “U.S. stocks surge as investors eye a rare dose of encouraging jobs data and stronger revenue at Cisco”. As of noon today the Dow was up nearly 400 points.
Inman News reports: “Market turmoil has home buyers on edge” but then says: “So far, investor flight to the relative safety of bonds and mortgage-backed securities that fund most home loans has pushed the cost of borrowing down — a boon for both homebuyers and homeowners looking to refinance.”
NAR continues to advocate for all of us in our continued opposition to “policies that ensure qualified borrowers can obtain safe and sound mortgage financing. NAR called on regulators to revise the unnecessarily high down payment requirements of the Qualified Residential Mortgage (QRM) exemption from risk retention requirements under the Dodd-Frank Act. A broad QRM definition will encourage sound lending and reduce future defaults without delaying or denying homeownership to millions of creditworthy borrowers.”
The Federal Reserve Board has pledged to keep interest rates at near zero until 2013.
NAR’s Housing Affordability Index is at 176.6; the third highest on record. The index measures the relationship between median home price, median family income and mortgage interest rates; the higher the index, the greater household purchasing power.
So…you decide who to listen to.
To paraphrase an old southern saying: “If the Lord’s willing, and the creek don’t rise”, we’re going to continue to push our way out of this.
Read Full Post | Make a Comment ( 3 so far )To underwrite or not to underwrite…one way or another someone’s going to get hurt.
I had lunch today with Dirk Scott from Home Federal Bank and two underwriter friends of his.
They started sharing “war stories” and I started getting dizzy.
Let me set the stage for a minute…both of these individuals are experienced, talented, capable professionals. Their combined market knowledge is as great as anyone’s in the Valley. When they say something is out of whack, you can take it as gospel.
We started talking about what causes an otherwise beautiful loan application to end up in the trashcan.
First and foremost we have to remember that all of these answers are driven by the eventual consumer of home mortgages…investors. Investors might be Wall Street or more often the big banks.
All underwriting decisions are based on one simple question:” Can I resell this loan?” Anything that returns and answer of “No” will result in an immediate denial.
It doesn’t even matter that the “No” might be inaccurate. There is such paranoid conservativism being applied to these decisions that even the hint of a “No” is enough to get a resounding “No”.
For instance…in this golden age of technology, intelligent local underwriting is lorded over by DU and LP. Two simple acronyms that spell the end of a deal for lots of us.
DU (Desktop Underwriter) and LP (Loan Prospector) are two automated review systems operated by Fannie and Freddie that have the ability to red or green light every mortgage loan processed.
Worse yet, these automated systems are built based on algorithmic models controlled by bureaucrats in DC and do not allow for the nuances of local markets or local underwriter expertise.
From time to time Fannie (who controls DU) or Freddie (who controls LP) can “turn a dial” and tighten or loosen underwriting review standards. Local underwriters never know when an adjustment is coming or how severe it might be.
An identical loan could be approved on Monday and rejected on Friday because of tinkering to DU or LP, and the local underwriter will be powerless to explain why.
What’s one of the biggest reasons that DU/LP will kick out a loan…unique properties. Carriage houses, above garage rentals, shops, barns, outbuildings are almost guaranteed to muck up the review process.
Second reason, too many improvements. Remember the advice you’ve given buyers: “Don’t buy the nicest house in the neighborhood.” When they ask why, just say: “Because unless you want to retire there, you’re not going to be able to resell it.”
Too many improvements or too many unique aspects of a house will cause problems with the comparables. And, problems with comparables will cause DU/LP to collectively say “No way.”
DU/LP are simple at heart. They want an IDENTICAL property within a certain distance that has sold within a certain number of days.
Absent the above, no loan. Simple.
So what’s the answer…?
There are ways to improve the likelihood of getting an approval. Or, of educating a seller to be able to approach a sale in a more realistic way.
Join us on August 18 at Agent2Agent as a panel of underwriters tells us how.
In the meantime, our Government Affairs Director, Miguel Legarreta is talking to NAR to find out how we direct some of our advocacy efforts at lessening the subjective nature of DU/LP.
Stay tuned.
Read Full Post | Make a Comment ( 1 so far )100% or Half The Job for Your Clients?
Have you been asked to discount your real estate services lately? If so, I have to ask, just what do you intend to eliminate for that discount?
Our clients and customers expect a certain level of professionalism in everything we do, whether it is listing a home or selling a home. Why would we do half a job for a seller? Why would we pay only half attention to a buyer? Not to mention, what does discounting tell a client about your negotiating skills?
For a Seller, when we take a listing, most REALTORS® have certain systems in place. I challenge you to actually write down everything you do, line by line. That list alone will make an impressive listing presentation; believe me, it is what I present to sellers. We don’t “just” put a property in the IMLS, we market the property as many ways as we can, and nowadays there are more than just a few resources we can use for marketing. We network our listings, we advertise our listings, and we preview other listings to be informed about the competition for our listings. And, that is just the tip of the marketing iceberg.
For a Buyer, when we receive that first phone call, a REALTOR® will ask the basic questions and meet with the buyer as soon as we can to establish a relationship. The notes we take for their “wish list” helps us in our IMLS searches, and the initial showing will give us a better understanding of likes and dislikes. We make sure that a buyer will receive suitable listings of interest, we have tools such as Listing Book to utilize, and we preview other listings to keep up on the market for specific buyers. Again, these are just a few of the tasks involved working with a buyer.
I don’t know about you, but I value my time and energy. Of course, there are always circumstances in offering a discount – family, best friends or working two transactions.
So how much do you value yourself and your real estate skills? What are you willing to cut?
Read Full Post | Make a Comment ( 1 so far )Homeownership still the American Dream
At some point in time most people are faced with the decision to either buy a home or continue renting.
Renting can make sense for those not yet ready to take on the responsibility of homeownership, but for those in a position to purchase a home it can offer immediate benefits and long-term value.
Research suggests that homeownership also strengthens communities. Homeowners are more likely to be involved and engaged in local issues, and they move less frequently than renters. This helps prevent crime, improve childhood education and support neighborhood upkeep. According to the National Association of Realtors® study, Social Benefits of Homeownership and Stable Housing, homeowners are more likely to vote and they volunteer time for political and charitable causes more frequently than renters.
Data from the Federal Reserve Board shows a typical homeowner’s net worth is 46 times that of a renter’s. Something to keep in mind when you are thinking about buying.
For many people, owning a home is part of the American dream. It continues to be a goal of individuals and families from all walks of life. The NAR 2009 Profile of Home Buyers and Sellers survey reveals buyers most often cite the desire to own a home as the primary reason for their recent home purchase.
Which is why NAR has focused on “What Matters Most” for their 2010 Public Awareness Campaign to remind homeowners, buyers and sellers alike that homeownership remains the foundation of the American Dream.
Ad Spots are already appearing on TV, Radio, Print and NAR is even trying out online radio spots. Have you seen the new ads? what do you think of them?
Read Full Post | Make a Comment ( 1 so far )Making Your Marketing Money Go Further
In this ever changing economy, agents are scrambling to find the most effective way to stretch their marketing dollar.
The Real Estate Book, a leading publisher online and in print of real estate information in North America recently conducted a survey of top real estate agents nationwide to find out how they are marketing themselves and their listings in the current economy. It is no surprise to find out that the Internet has played an integral part of new marketing plans, but what is clear is that a shift has occurred in the type of advertising.
Top agents are no longer using mass media and have shifted to targeted real estate media. 75% of their marketing spending is dedicated to specialty print, personal websites, and Internet advertising. Newspapers ads and radio spots are rapidly becoming a thing of the past.
A few quick stats:
* 57% of the survey respondents spend over $500 per month on advertising, marketing, branding, and promotion. The median monthly amount was $620.
* The median amount spent on Internet marketing is $196 each month. 38% spend more than $250 per month on all forms of Internet marketing.
* 86% of the respondents had a personal web site in addition to their broker web site. 61% spent money on search engine marketing to promote themselves. 25% used blogs or social media as a promotional tool.
* Only 5% of those agents surveyed expect to spend more on newspaper ads.
In a time where consumers can access so much information, agents have to be creative to stand out from the pack. Ultimately, a consumer is looking for an agent they can trust, who is knowledgeable about the market, and who is experienced.
To read the full published article, follow the link.
What have you found to be effective?
Read Full Post | Make a Comment ( None so far )
acarblogs
judycanblog
laurie barrera
marclebowitz
Miguel Legarreta
Susan Hansen
