Read the blog below:
Anthony: It’s finally happened. It’s happening. What we have all been hoping for is happening. Are you prepared? Are you ready? Are you able to properly explain it to your buyers? Are you able to properly explain it to your sellers? Are you able to show them why this is happening and what’s happening, or you’re just are allowing your prospects to go into Lala Land with their own beliefs?
Anthony Lamacchia here, Crush It In Real Estate on Sunday night, sitting by my kids playing kickball. I have been invited 16 times into the game, so I’m going to join them soon, but I want to talk about the market. Let’s take Massachusetts, as an example. 3,100 homes listed the week before last. 3,000 listed last week, meaning yesterday to last Sunday. Now, this burst of around 3,000 listings usually happens late March, early April.
This year, it waited an extra five to six weeks. Why did that happen? The vaccine, the virus, sellers being scared of listing because they don’t know where they’re going to go. Now that they’re seeing other people list, they’re more tempted to list. They’re more willing to list because they’re feeling more comfortable that they’ll end up finding what they want but what does this change bring? It brings a lot of good, but it also brings a lot of confusion in the eyes of the consumer. Consumers, i.e. buyers and sellers, start to have beliefs that are inaccurate.
For example, “See, it’s happening. The market is going to crash.” No, market cannot crash when we have 2,700 single families for sale in a state – or 3,100 now, whatever it is- in a state of 7 million people. They start to get these ideas in their head that the market is going to crash. Buyers also got somewhat acclimated to an extreme under-supply of homes and 20, 30, 40, 50 offers on every home. Really everywhere, not just here up in Canada, South Florida, California, everywhere. This is a systemic problem.
Well, now that there’s more inventory, the buyers get spread, instead of 20 people at an open house on Sunday. Think about it. Just take the numbers, for example. There was about 1,500 to 1,800 homes getting listed per week, if you go from late May, back to school vacation week in April. Taking out Memorial Day weekend, there was less, but school vacation week in April. All of a sudden you have 3,000, then 3,000.
Now, that’s double the amount of new inventory. What happens to buyers? Buyers are more spread out. Instead of 30 people being at an open house, there’s 15 because there’s double the inventory. Instead of 15 offers, there’s seven offers. What happens is, buyers start to think. “Why is no one else interested?” They don’t realize it’s such a good opportunity. I’ve been telling buyers the truth for years. I’m one of the only realtors that I know who says on TV, anywhere, “Hey, best time to buy, summer and fall. Best time to sell, winter and spring.” Lots of people say, “Oh, don’t say that, you’re going to scare buyers.” It’s true, late winter or early spring is not the time to buy.
What’s fascinating about buyers with their behavior is they don’t listen. They think I’m trying to sell them something. Then they get burnt out. They get buyer fatigue, buyer exhaustion in the winter and in the spring, and then they give up, they sign leases, they get out of the market. Now, when it’s getting easier, they’ve taken themselves out of the market.
You should be talking to your buyers about this. If you’re a Massachusetts realtor, use massrealestateupdates.com as a resource. You’ll be able to see the amount of inventory listed per week. We’re going to post updates tomorrow, around one or two o’clock, and you’ll be able to see what’s going on. If you’re in another state, if you’re in South Florida, if you’re in these other places, more homes are getting listed and more buyers are finding properties. I even heard our Florida realtors, finally, in the last two weeks, say, “You know what, you’re right. It’s getting easier, it’s getting a bit easier.” You have to be prepared for that and you need to show your buyers this.
Now, let’s talk sellers because both sides get confused. This is a business that is built on emotion. I have news for you all. As frustrating as it can be, embrace it because that’s why we have jobs, and that’s why we will always have jobs. The greed of the American consumer, all of us, never rests. Sellers never miss an opportunity to overplay their hand. They never miss an opportunity to overdo their greed and screw up their position.
Right now, there’s an insane amount of sellers that think market is just getting stronger and stronger to be a seller. No, actually, it’s not. In the winter, it’s at the strongest. As spring goes on, as I’ve been saying, each week, more and more buyers find homes. Every week, 2,000, 3,000 buyers find homes, and more sellers come on. I always do this with my hands right? In the winter, there’s this many buyers, this many sellers. Well, now there’s this many, this many buyers this many sellers. It gets a little bit better.
Anthony: Charlie, come say hi, bud. I’m teaching people here, we’re going over the market with people. All right, you could listen and learn something here. Say hello. This is Charlie, everybody.
Charlie: Hi.
Anthony: Charlie wants me to play kickball, so I got about two minutes left. With sellers, what you need to do is use the On Market SnapShot, use inventory reports. Show how many homes were for sale in the winter. I don’t care what market you’re in. You go look at how many homes are for sale in the winter and you go look at how many homes are for sale now. There’s more for sale now than there were in the winter. I don’t care what market you’re in in North America. It doesn’t matter to me. That’s the case.
You’ve got to show that to your sellers so that you can get your sellers to understand that “Hey, Mr. And Mrs. Seller, no, it’s not better for you right now than 90 days. You need to price realistically because if you don’t, you’ll sit on the market.” Now, some sellers have to do that to learn. With listing homes, a sign in the yard is better than a sign on the trunk. In most cases, you’re going to take the listing, but you’ve got to set that expectation. Remember, I said this, the next 30, 60, 90 days, you are going to see more aggravated sellers. You’re going to see sellers start to say to agents, “What’s going on? Why is my home selling right away, my neighbor sold right away.”
You’re right, your neighbor sold right away because they listed in the winter when there were two homes for sale in their neighborhood. Now, there’s six. Now, there’s more to choose from. I mean, listen to these numbers. It’s still ridiculously low inventory, but it’s improved since the winter. It’s two sets of conversations, and you’ve got to use the reporting. I mentioned the reports that we put together on massrealestateupdates.com. We have newhampshirerealestateupdates.com and then in Florida, we put out reports there, too. It doesn’t matter what market you’re in. Use the data in your MLS so that you can show your buyers the difference in the market. Want to say hi again.
Anthony: You can say again, don’t be shy. You have to use it because you have to show them. When you only tell them, they look at you with one eye like, “This is a salesperson.” The market changes here. When I say the market changes, don’t hear that and go, “Oh, Anthony Lamacchia says the market is going to crash.” No, I didn’t say that. What I’m saying is the frenzy has backed off a little. Still multiple offers, still that stuff going on, but it’s not what it was 90 days ago.
We need to adapt, you need to be prepared to have those conversations with your buyers and sellers. Not only have the conversations, but show them the data. When you show them the data, you’re going to be more apt to get your sellers to listen and not overplay their hand. You’re going to be more apt to keep your buyers in the game. We all know a buyer buying in the next 90 days is way better off than a buyer that was buying in the last 90. That’s just the way it goes. That’s how the market works.
That’s all my friends. I hope that makes sense. I got to go play kickball or I’m going to be in big trouble. It’s almost my damn bedtime so I don’t know how this kickball game is going to be, but I got to go. See you guys. Charlie, want to come say bye? Come say bye. Say bye.
Charlie: Bye.