Read the blog below:
Anthony Lamacchia: Hey everybody. I didn’t think it would pick up that quick. I’m over here taking a drink of water. Good morning, everyone. Happy to be here with you. I wanted to start a couple minutes before 11:00 to give everyone a chance to log on. We’re going to have a whole lot to talk about today. One thing about COVID-19 in this whole situation, between COVID and real estate, there’s always things to talk about. There’s never a lack of things to talk about.
I’m happy to talk about good news today. The market has officially picked up. It has officially turned back on. Is it where it should be? No, but has it turned on? Without a doubt. Seller and patience and buyer and patience has caught up with people and people are getting moving. We’re going to talk to you about that, some market stats and some signs that it’s clear that it’s picked up.
Also going to be talking about the way forward. I talked about that Monday to buyers and sellers, but I’m going to talk to you a little bit about it with all the realtors here and how we should deal with it. We obviously got bumped out in Massachusetts till May 18th so we’ll spend a little bit of time on that. What does that mean? What do I think that means for buyers and sellers? What do I think will be a little different now that it’s May 18th, as opposed to May 4th. I’m going to break that down.
We had also done a second survey late last week, and we have the results back. I’m going to talk about it a little, but we’re not providing all the results to everyone. That’s only going to be provided to those that were kind enough to take it and help out. Also, as always, at the end, I’m going to do a Q&A. Super important to do a Q&A, answer your questions. I’m always here with you guys for an hour, hour and 10 minutes. That’s no problem at all. If you have questions, you can even start posting them now. That’s no trouble at all. We’ll be going over that.
We’ll also talk about what I expect for the summer. I have very specific recommendations for realtors on how you should handle your planning for the summer months, and how you should plan on managing your time for the summer months. I’ll give you a hint. It’s going to be busier than you’ve ever seen it, so get ready. Also, we’re going to talk about price drops. People are acting like- are prices dropping? Are prices– No. Not happening. Not happening, and if it does happen, it won’t be in the next four or five, six months.
I’m 100% certain on that, and I’m going to explain to you why. Remote notary bill got signed. That’s really good news. It enables closing attorneys to get deals closed without having to actually meet in person with buyers and sellers. Attorneys were going in with masks on and suits and it was kind of crazy. We enjoy opening up training to everyone. Most of you know at our company at Lamacchia Realty we do training every single Wednesday from 10:00 AM to 2:30.
Since COVID, I decided to basically open it up to everyone at 11:00 AM each and every Wednesday to go over real estate updates, to talk about different things realtors should be doing, talk about planning. One of the things I’m going to talk about today is really how to plan for summer, because it’s going to be like you’ve never seen it. I’m sure of that and I’m going to talk to you about some specific recommendations I have.
Also good news that the market has officially picked up. I’m going to go into that. I’m going to talk about moving forward. We’re going to talk about May 18th, as opposed to May 4th, so we have a lot to talk about. I’m just delaying a little to let people get on, but it’s 11:03. It’s game time. All right. I have updates for all of you. People watching from other states, I already see some tuning in from other states. I’m going to spend a few minutes on Massachusetts here but the updates are not very much different.
There’s a lot of similarities state to state but I’ll tell you something, to pick a random state. I got a nice email from a realtor friend in Tennessee over the weekend that said, “Hey, you know what, it really hasn’t changed here.” I talked to a friend of mine, Jeff Williams in Arizona and they went down about 20% for a couple of weeks and then right back up, so it really hasn’t changed a ton for them.
I was on a call the other day with great broker-owner out in Green Ridge realty up in Michigan and they’re very slow. That Governor really put the clamps down, no showings. Also people from Jersey, New York on there but then Florida is busier. It’s very interesting what’s going on. There’s no playbook for this. This is truly an unprecedented time and we’re all adapting. Honestly, I think the realtor community has done great adapting.
I’m so grateful to see how people are adapting and see how people are still doing business. It really makes me proud of the industry that we’re in and I’m very proud of our realtors at our company, because they’ve really done a great job and people are still selling homes. People are still buying homes but we’re doing it in a very safe fashion. To go over some stats with you, I want to spend a few minutes on it. Listings last week were up 30% over the week before.
Right around 1,400 homes listed for sale in Massachusetts last week, as opposed to the week before. The week before that was about 1,000. Normally we’re 2,500 to 3,200 at this time of year. Still a ways to go but we’re in the right direction and we’re through that low point. Properties pending. Basically, UAGs contracts accepted up dramatically about 25% last week over the week before, and I can tell you this week is even busier. Here’s my quick prediction.
Monday when I do my update on the Lamacchia Realty page at 3:00 PM I am certain I will be telling you even more homes were listed this week than last. More homes went pending this week than last. The percentage of homes pending compared this week to last will be higher. I’ll bet you I’ll be saying that. I made the same prediction last Wednesday, about this past Monday and I was right. Let’s see if I’m right again. I’m putting my neck out there, but we’ll see.
The reason that I think it’s busier is- you think about how people think. That’s what I spend most of my day doing, is how do I solve their problem? Socially, people are– Well, some people are straight-up getting sick of it. They’re just like, “Enough of this. Let’s get out and get to work.” Then there’s people that maybe three or four weeks ago, were in the stay-at-home. I will stay-at-home and now they’re like, “All right, maybe I will go out.” I said that four weeks ago.
I said, “Watch, two or three weeks, everybody’s willing to do it. When it turns into five weeks, six weeks, seven weeks, eight weeks, people will become less willing, because they’re worried about money,” and it’s understandable. It is understandable. Now, there’s a mix of emotions, but those emotions you’ve got to keep in mind are also the same with buyers and sellers. In late March, we’ll wait a couple of weeks, we’ll list in a couple of weeks.
Well, that turned into May 4th. Now may 4th turned into May 18th. Remember, I said this. There was a ton of people, I’m going to talk about our survey soon, that said, they’re planning on listing after May 4th. Do you think every one of those is automatically now going to say, “Okay. I’m waiting till after May 18th?” Not going to happen. Many of them are going to say, “You know what I was playing on May 4th. I was being patient. I’m done being patient. Everybody else’s listing their home, put my damn home on the market.”
I think we’re going to see a continual uptick in the amount of homes that are getting listed. Now, here’s my ask to everybody watching. Realtors in our company and outside, it’s time to start educating people. It’s time to start telling people that real estate is happening. If you notice, I wasn’t acting like that. I wasn’t talking like that two or three weeks ago, but I am now because I don’t want to see our market get hurt any more than it needs to, or hurt unnecessarily.
There are people, very smart people, that are asking me questions like, “Well, is anyone even buying or selling right now?” Guys, people buy and sell homes 365 days a year, every day for the last 100 years. It never stops. Does it slow down? Yes, but it never stops. It is very important that you all message that out and tell people what’s going on. Tell people how people are listing homes. Tell people how people are buying homes. It’s time to get back to that so that society realizes it because negativity can kill our business.
When I say kill our business, kill our industry. Our business never stops. Even if prices go down, there’s still people buying and selling, but it can really hurt housing prices, unnecessarily. Imagine all those buyers who sold during the last two years. Well, if everybody starts thinking prices are going to tank, you’ll see people backing out and then they could. We’re not seeing that. It’s impossible for prices. I had a long conversation with my dad this morning.
He called while I was working out and I had my earbuds in. He said, “What’s going on with houses?” I said, “Dad, there’s multiple offers all over the place. Literally everywhere. Everything that’s getting listed is selling.” He asked the key question because he understands real estate. “Is inventory going up?” I said, the amount of homes listed for sale is increasing, more people are listing but the inventory cannot seem to stay above 11,000 homes for sale in Massachusetts for more than like, three hours.
He goes on, “Then there’s no way prices are going down.” I said, “Exactly.” Now my dad’s an unordinary case. He has a son that’s real estate obsessed. He also very much understands economics and supply and demand at a much higher level than the average person. He also talks to me all the time, who gives him this information. It’s important that all of you are educating buyers, sellers, family, people need to know what’s going on.
I saw a video of Lennox Scott, John L. Scott, great real estate company out in Seattle. The owner said, “Listen, guys, you need to educate the public. You need to be telling people what is going on,” and he’s right. He was saying that about three weeks ago and I waited a week or two to say it. Now, I’m saying it, it’s very important that we do it. The blog that I wrote, and the marketing team helped with and other people, on why this is not 2008. Every realtor should read that, top to bottom, three times. It does nothing for me personally, if a realtor outside the company reads it.
What it does is it helps you understand the market and it helps you be able to fend off the questions that we’re all getting from buyers. Well, are prices going down? Is the market going to crash? You should see our survey. We said what’s your biggest concern? Everybody, my buyers think the market’s going to crash, my buyers think the market’s going to crash. Guys, it is impossible for the market to crash when inventory is lower than it was a month ago. Impossible.
You need to explain that to them. Now we’re going to go through a difficult period though because remember, the March housing data just came out last week. The news didn’t even cover it because March home sales were flat. End of May, you are going to see headlines across the country. Remember I said this, Wall Street Journal, Washington Post, New York Times, Boston Globe, housing goes down 50%, housing goes down 40%, it’s going to be ugly.
End of June, probably going to be worse. Why? Because sold statistics are trailing indicators. When they look at housing stats every year, what they tend to do is compare to the same exact month the year prior. You have to educate people on this. Of course there’s going to be less home sales this month. Month to date, as of this morning at five when I looked, 5,000 homes listed for sale in Massachusetts month to date.
Normally this time of year, 10,000 to 11,000. Last year was 10,700. We’re down 53%, 54%. It’s impossible for the market not to slow down. The fact that the homes are getting eaten up as they’re getting listed, and they’re selling right away and the total home for sale can’t go above 11,000 shows there’s no slack in the market. The market is strong. It’s being held together by the low inventory.
I saw Pam O’Connor, do a great- Pam O’Connor is the retired CEO from leading real estate companies of the world. She did an awesome video with Inside Real Estate. I want to say it was earlier this week, or late last week. Pam said everybody’s been complaining about low inventory for three years. She said something like this, she said, “Well, now, they’re going to be happy this low inventory because that’s what will save the market from collapsing.”
Again, statistically speaking, I want to plant this in all your minds, right now this morning, 10,800 homes for sale in Massachusetts, this date in April 29, 2008, 45,000 homes on the market right around there. Go look it up on our Market Snapshot. You cannot have a market crash with four and a half times less inventory. I think you guys get the point. The biggest thing I’m trying to get you to understand and encourage you to do is educate, don’t be salesy about it. Don’t, “Oh no, the market’s not going to crash, market’s strong, what are you talking about, the market’s great.” No, the market’s slower. Tell people it’s slower. it’s true.
Explain to them a crash is different. Prices have to come down. Like I said, people are adapting. People are rolling through it. I was at Home Depot twice over the weekend and they’ve got these glass barriers now at the registers. People are passing things, different stores, you see this glass hanging at CVS, for example, and you go up to the pharmacy counter, and you pass things underneath, they’re doing that so that people aren’t transmitting anything when they’re getting whatever they need to get from a store.
The point I’m getting at is people are adapting, companies are adapting. We’re not made as a society to be shut down. This is crazy. It’s never happened. I was saying to a friend this morning, if 10 of us sat together and said, “Let’s think of the five craziest ways that an economy could collapse, or the economy could dramatically slow down,” we would never have thought of this, but we’re going to get through it. It’s literally going to do this, our economy. right back up.
You look at GDP for, I think it was the first quarter. I think it just came out or was it last month, it’s -4.9. That’s not that bad. It’s not good, but it’s not bad. Q2 is obviously going to be down dramatically. Q3 will be the transition, and we will come out of it after that. Three consecutive quarters of negative growth equals a recession. People are adapting, people are getting in gear, or have gotten in gear really, as of 10 days, two weeks ago, and that’s why we’re rolling through this.
We’ve got to make sure as realtors that we are very, very safe. We need to be safe about the way we’re showing homes. Safe about the way we’re meeting with buyers and sellers, tenants, landlords, we’ve got to be safe, follow those instructions that we put out on safehomeshowing.com. We actually added something to it over the weekend that we didn’t think of.
Our friends in Chicago at Add Properties made us think of it because they put out an awesome video and they had- I think she must have been an actor. No, she wasn’t an actor. She was like their director of ops or something. She said, “Touching light switches.” We added that in. We said, “Tell the sellers leave the doors open that you want to, leave the closets that you’re willing to have people look at, leave them open, also leave the lights on that you want, for the lights to go on.”
If a seller doesn’t turn those lights on, buyers and buyers agents should be walking through like this not touching 50 things. Use those items on safehomeshowing.com because that will guide you. There’s a great infographic in there. There’s also signs that we’re using in our listings and our realtors are very much adhering to it and I hope that other realtors- I know that many other realtors have adapted to some of the recommendations we had literally across the country.
I know of companies in California, Atlanta, Florida, Texas, Arizona, Chicago, I could go on and on, that are using that information. Use it. Now we’re going to talk about May 18th. We got pushed out from May 4th. What does this change? Well, I had already alluded to it five minutes ago, I do not see every seller that was willing to wait until May 4th to list saying, “Now I’ll wait till May 18th.” Not going to happen.
I bet you a third or half of them will say, “List my home. I’m sick of waiting. I see other people doing it. If other people are doing it, I can list my home.” That might change what I had predicted. I had predicted that in the week or two after May 4th, there would be 10,000 or 12,000 homes getting listed. Now, it’ll probably be stretched out a little more from the fourth to like the beginning of June, and maybe it’ll only be 5,000 or 8000 a week. Either way, it’s still a lot.
I recommend, I said this before, encourage your sellers to beat the wave. Do not wait around to get completely on the other side of that date. When you get on the other side of that date, there’ll be a lot of sellers. Not a ton, but there’ll be some that’ll say, “I want to wait even an extra week or two.” You will be listing with so many other people, your listing could possibly get drownded out. That’s why I recommend that people encourage their sellers to list earlier.
Remember here in Massachusetts, you can list and not even show the home during the state of emergency. You can have it out there on the market and then eventually show it. That’s something that I see changing. Another thing that happened in the last week is schools got bumped out, canceled, the kids aren’t going back to the school until September. How else can I put it? It’s not exciting, but it’s understandable. I’m with the governor on that.
There’s been some things that I’ve agreed to disagree with. I’m not the one who’s making the calls. I have four children, they don’t properly wash their hands. They don’t know how to go into a store or anywhere without touching 52 things. I think it’s okay. The question becomes whether it’ll be summer camp? That’s interesting. I’m talking about these things because they do have an effect on our market. They have an effect on the workload of our realtors.
I’m going to be talking to you about that in a few more minutes on how I think realtors should be planning. Again, just to recap, what do I think is going to change from the May 4th to the May 18th? I don’t think everybody’s going to wait till the 18th. You’re going to see a lot of people that say, “Put my darn home on the market. I want to sell.” Also, because they want to be in their new home before the school year in September and they’re starting to say, “My window here is going to close.”
Well, I have news for you. A little glimpse into what I’m going to talk about in 10 minutes. Our season is going like this. It’s getting crunched, the year, but it’s going to be so busy. All right, survey results. A couple of things. Many comments from realtors about buyers and sellers getting used to it, being more comfortable, that’s why more are listing, et cetera. Still, a lot of people holding off on listing. We knew that. People planning to list after the stay at home order is lifted is still at 70% of realtors are saying that most of their sellers are waiting.
That’s 70%, the amount of homes that are going to get listed is going to be crazy. People are saying that the greatest motivation with buyers is the interest rates. These rates are free money. It’s fascinating to me, how low they are. What a deal you can get nowadays, from this kind of interest rate environment. You can save a substantial amount of money. One point on an interest rate over 30 years, $400,000 purchase is like- I don’t want to say the number off the top of my head. It may be $100,000. It’s a substantial amount of money when you do it out over 30 years, so have that in mind.
There was talk from realtors in the survey about buyers just getting impatient, sellers getting impatient but not as much, and I’ll tell you what that reminds me of. What do I say every single year? Why do I always say, “The sellers who list earlier in the year do better.” The reason is the sellers wait longer than the buyers. The buyers are impatient. Once the clock ticks midnight and January 1st of a new year comes out, buyers come out in droves, especially in that first week.
If buyers are out searching for homes, excited to find homes, sellers delay. They got this thing about the flowers and they don’t understand that they’re better off listing earlier. This is the same situation. Sellers are being a bit more patient than buyers. That’s why the sellers that list sooner are going to do better, remember I said that. There are some buyers on the sidelines. We’re still estimating it’s down– We had thought it was about our surveys and talking to people, we thought about 25 to 30% of buyers were on the sidelines.
We think that might be more like a 20 to 25 now. There’s more buyers coming out and that’s also partly because listings have increased, properties being listed. So anyway, for those of you that were nice enough to participate in our survey, the survey will be sent out to you this evening, and you can look at all the details. Now let’s talk about the crazy summer that I expect, and how all realtors should prepare for it. It is going to be an extremely busy summer. I am going to tell you a few things very bluntly right now.
It will be the busiest summer you’ve ever seen. If you want to sell a ton of homes this year, you seriously should probably cancel your vacation if you didn’t already, because it’s going to be that busy, and the season is going to get shortened. This year was a mild winter so it started earlier and the season gets stretched out from real busy from late February till August.
Well, now, a lot of the season got pushed forward. This is like- February 2015, we had all that snow and it pushed the year forward a month, and we were gangbusters busy, and it went all the way into the late summer. This is going to be more. This is going to be a more extreme example, I guarantee it. I’m 100% sure. You can quote me on this. You can write bad blogs about me if you want to if I’m wrong, because I’m that sure I won’t be wrong.
This will be the busiest summer that any of us have ever seen, ever. It is going to be because of what happened here, and because of so many people going over the sidelines for 60 days. So now you’re going to get the people that were already planning to list and to buy in May, June, July, August, plus all of the people that stayed on the sidelines in March, April and part of May on top of each other. So my recommendation to realtors is plan accordingly. Line up family members to watch your children if you need help with your children.
Line up babysitters. Line up nannies. I don’t know, that’s your business, we all have our own way of watching our children but I’m telling you if you still want to sell a ton of homes this year, you’ve got to make arrangements and you’ve got to do it differently. I do want to say, I’m the one that does time management trainings and talks about how it’s important that people get home for dinner every night, but I will tell you, I’m going to be a little more blunt about it. We’re all spending time with family like mad right now.
This is off the charts and I’m enjoying a lot of it, but- and I know many of you are enjoying a lot of it, and I know some of you are going crazy and can’t wait to leave, and I know there’s people getting divorced because they’re sick of seeing each other. In all seriousness, the time that you don’t have with your family, May, June, July and August, it’s getting made up for right now because of how much everybody has been together. If I was in your shoes- and I’ll tell you I’ve learned this from experience.
You’ve got to communicate that to your family, to your children, to your significant other and say, “Listen, since I’ve been held back, when I go back, things are going to be busier than ever before. If I don’t take advantage of it, this is going to be a lost year for me or for us.” Especially if you’re the primary income earner. You’re someone who’s used to making $200,000 a year and now COVID happened and you’re worried if you’re even going to make 150.
I have news for you. You might still be able to make 200, but be ready, you’re going to have to work like a savage in June, July and August. It’s going to be extremely busy. The amount of listings that are going to come on, buyers and sellers, people are going to be on top of each other. Buyers are going to be asking realtors to show them 10 homes, communicate with other agents in your office. Communicate with agents that don’t do as much business.
Maybe discuss with them a coverage plan that they could cover for you, so that you can keep your clients happy, because I’m telling you, you’re going to go from being slow over the last four weeks to being completely having a feeling of being run over, and having a feeling of being overwhelmed. We’re really going to go from one extreme to the other. I know this might not be exciting to hear, but I like to tell you guys what I really see.
All the numbers are telling me, every indicator is telling me, look at mortgage applications, they’re up again. Everything is pointing toward people getting back out there. Mortgage companies have said, once people are reemployed even for a day, they can get approved for a mortgage. You used to have to be reemployed 60 days or something like that. Now they’re saying one day, so things are going to turn back on. Now, everybody that got laid off in furloughed is not going to be able to just buy immediately.
Some people financially are going have to wait, but you’ve got to make sure that you manage your time correctly, set expectations with family, set expectations with whoever helps with your children, because if you don’t, you’re really going to miss out. It’s going to be very busy, but it’s going to last about four months. It’s going to be May, June, July, August, last week in August is when everybody else start going, “Did it slow down?”
Then the real test is going to come in, when we get to fall. That’s when we’re going to find out if we see a market adjustment of some sort because of what happened here. My bet, we see a slowdown. I don’t think it’ll be crazy. I think it’s going to be similar to the fall of ’18 or similar to the fall of ’14, when it was slower but not terrible. Election years are a little worse. Fall of ’16 wasn’t that bad even though it was election year, but it was slower. Have that in mind, plan accordingly.
Also make sure that you keep some of the things in place that you’re doing now to save yourself time. Now I’ve talked to you guys about this a lot. I do not recommend realtors go to closings. I’ve been saying it for 12 or 13 years. I’ve been training people on it. Some listen, some don’t. Closings are for attorneys, they’re not for realtors. Now, all of a sudden, because of COVID realtors are being told not to come. When things turn back on, don’t go. You’ve adapted, you’ve gotten used to it.
Hopefully, you’re calling your clients the morning of closing,”Hey, you feeling good? Just want to make sure you’re ready for everything today. Do you have any questions for me? All right, great, I’ve already spoken to your attorney. I’ve already spoken to your mortgage broker. Everybody’s feeling good. Everybody’s on track. Go ahead, go to closing. Let me know if you have trouble, text me or call me from there if you need me.” That is the right way to do it.
Attending home inspections unnecessarily, that’s another item that came up from this. About four weeks ago a seller started saying, “I don’t want anybody here but the inspector.” Great, I’ve used this example before. When you go to the doctor’s and your arm hurts and they send you down the hall to radiology, does the doctor go with you to radiology? No, there is no reason and it is a mistake. It’s a legal trap if you go to a home inspection on your listing, I do not recommend it. Don’t do it.
So now we’ve adapted to that, don’t get sucked back in to your old habits that you don’t need to be doing. Don’t do that. Use the new habits. Even as a company. I’m going to give you guys some examples of things we’re doing, some of which we haven’t announced yet. We’re now taking incoming wires for deposits and guess what? Accounting is going, “Jesus, this is actually better. We don’t have to deal with paper checks. Did you get the check? Didn’t you get the check?” We’re liking the incoming wires.
More of our realtors have gotten non-direct deposit, we love it. They’re not going to get off direct deposit when this lifts. Other examples, deposits on listings, when buyers make deposit checks, there’s a way now to scan it and send it right in. All of these things that have come about, we’re going to stick with these efficiencies that have been created. We are going to stick with and keep doing it as a company. You should be doing them too, because each and every one of you has your own company.
Each and every one of you is a business under our umbrella. So don’t go back to doing inefficient things once the light switch turns on again and it gets very busy, which it really has already turned on. Don’t make that mistake. Very important not to, because you’re going to need to save all the time you can. I’m telling you, you are going to two or three weeks from now run into five buyers asking for showings on the same night, on the same day on the weekend and you’re going to feel pulled in 50 directions.
Listing agents to list a lot of properties. You’re going to run into sellers that 10 people want either controlled-open houses or block showings on the weekends and you’re going to go, “How can I go to all these listings?” Connect with other agents in your company, agents that aren’t doing as much business. My recommendation to some of our newer agents and maybe some of our agents that aren’t doing as much business, raise your hand to the top agents. Say, “Hey, I’m here to help you.” Great learning opportunity.
Maybe you could potentially work something out with them. I don’t know, that’s up to you guys. Every realtor out there listening should be doing that because I’m telling you, every top agent you are going to see the busiest three to four months of your entire career coming at you. Very hard starting now, but in about a week or two, it’s going to go wild. Maybe three, maybe we get to get closer to the 18th but I’m telling you, you’re going to look back and say, “Jesus, I remember when Anthony Lamacchia said this was going to happen. That guy was right.” Keep that in mind.
Now I want to spend another two minutes on this topic because it bothers me. It’s kind of related to the beginning. Price drops. Too many buyers think prices are going to fall. I want to repeat some of what I said in the beginning. For prices to fall, you have to have excess supply. We have the opposite. We have a decrease in supply. You need to articulate that to your buyers, show them on Market Snapshots.
People don’t believe what they hear, they believe either what they experienced or what they see. Use our Market Snapshots like crazy. Do it right now to a year ago. It’s a great MLS report, my favorite report for many years, and show it to buyers. Make sure they are very, very clear that inventory is lower, not higher supply and demand business. Make sure they’re very clear about that.
I already talked a bit about fall and I discussed with you how I think that that will be the test for the market. When we get to the fall, I do think we’ll experience some slowness, some slightly higher inventory and maybe even higher than last year, but I don’t see some major correction coming from the market. If I did, I’d be the first one to tell you because that’s my job here and I don’t want to be wrong about it. Make sure to watch the existing inventory in your market.
Remember when I rolled out the six things that every realtor should be doing to prepare themselves for this change market? I’m going to open it up right here. I talked to you about being compassionate, not selling, not pushing people. Now you do need to get back to being more pushy, more affirmative, explaining to people what’s going on, trying to obtain their business, trying to get on the phone with them, trying to show them homes.
You have to get back to some of that. Getting in touch with every past client, hopefully you did it. Being the resource, hopefully you did it. Watching inventory levels. That was number four. I said, make sure to watch inventory levels closely. I am monitoring Massachusetts homes for sale every single day at noon since this started. The first three weeks I actually watched twice a day and now I’ve been every day at noon and I’m watching inventory.
You should be doing it in every town you do business in in the area. If you one off sell a home in some other market, who cares? If you’re an agent in Worcester you should be doing Worcester, Holden, Grafton, Millbury, Shrewsbury. Watch all those towns, make sure you’re clear on what’s going on with inventory. I can name 50 other towns and 50 other examples, but you guys get it. That is going to be the indicator to tell us what happens with home prices. I do not think we’re going to see some big fall. At worst, I think we’ll see maybe a percentage or two this year, but I doubt it. PPP loans, Paycheck Protection Program.
Yesterday I started a presentation with the president and secretary of and a lot of other people talking about the success of the program. There’s obviously no denying that this program has been very successful for businesses. They funded 14 years worth of loans in 14 days. It’s fascinating to me how much money they put out but there have been a few hiccups obviously. How couldn’t there be with that many loans?
The thing that I’m here to talk to you all about is what does it mean for a realtor? I told you all a week ago, in two weeks ago, I was skeptical on whether or not realtors could get it. I have two stories to tell you. Two success stories. I now know of two realtors that do not have a business account, that do not have a payroll or any employees that were approved for the PPP funds, and they are supposed to be funded today or tomorrow.
I know of two realtors. I warned both of them that I questioned whether or not they will be able to get it forgiven, but they’ve all taken it and I think they’re smart to take it because it’s 1% interest for two years. That’s like free money. In any event, I wanting to mention that just as a warning, I will again say that I recommend realtors go for it. Why wouldn’t you go for– People think nothing of running up credit cards.
Why wouldn’t you go for a loan that’s 1% interest? If it gets forgiven, that’s gravy. That’s a bonus for you. Be aware that I think getting approved could be tricky and if you do get approved, I think that forgiveness is, if I had to bet less than a 50% chance, just my opinion, unless they change something, National Association is on it. I’ve got to give credit. I know I do it every time. You guys are going to think I’m on their payroll.
The National Association of Realtors has absolutely been fantastic to us realtors, to us business owners, broker-owners during this situation. They’ve done so much incredible work. I can’t thank them enough. I also talked to you guys I believe earlier about how the governor signed the remote notary bill. That’s just another example of people acclimating to the situation, acclimating to what’s going on and you’re going to see closing attorneys take advantage of it.
Not in all cases, but in many cases and that will help decrease the log jam that we expect. Right at the beginning of this about five weeks ago, we wrote a blog on why we expected a real estate log jam, a bunch of things to get jammed up and not flow as well. It’s been pretty good. I’ve got to give the attorneys credit, they’ve been closing deals. This will help more.
Going to take questions in about five minutes. If you have questions, start posting them right away and I will get to them. Also, a reminder for all realtors, make sure your clients are clear, your past clients, because hopefully you’ve touched base with all of them. If they need a mortgage forbearance make sure they’re clear on the terms that they’re getting. Freddie Mac came out and said, “No one will have to pay it in a lump sum.” I thought that was fantastic. FHFA has also bent. A lot has changed in the last 10 days. Some of the services might not be saying it yet but they ought to be. If they’re not, then that’s a problem.
Look at the mortgage page that we put on our website. We put all the information to all the main services, contact information. We had staff members call the mortgage companies and make sure there were the right phone numbers and they pretended to be borrowers until they got to the point that they confirmed it and then they got off the phone. We went through that work because we want everyone to be able to obtain this information.
If you’re a realtor at another company, go rip off the information, go to Lamacchia Realty, right on top, COVID-19 resource section. Click down the bottom, click the button that takes you to the mortgage resource page and there’s the information. You can also get there from the question and page, but make sure to do that. Couple of other reminders that I want to say, guys, you need to be very in touch with your clients.
I talked about this at our company meeting an hour ago. I talked to you all about it a week ago. If on a 1 to 10, the best realtor in the world being a 10, the one being the worst, if you were a six or a seven, if you continue to perform at six-level, your business is going to go down. You’ll get very busy for the next three months, your business will go down after that. It might even go down in the next three months because it’ll get so busy you’ll have a hard time handling it.
Your skill level needs to increase to do as well in a market that’s slower. It’s not a mistake. It’s not by accident that the top agents do best in slower markets. That’s not by accident. That’s because we have experienced lala land for the last three years where every home you list sells. It’s lulled some people to sleep but this is the time that realtors need to grind. You need to apply yourself, you need to get all the training you can get.
If you’re on here, you’re already taking steps to doing that and I give you a lot of credit. Why don’t I take some questions? I think my friend Lindsay is going to send some questions over to me because she goes through all of the questions for me and sends them over. Lindsay, maybe, possibly? All right. Kelly asked, “Will our credit score or business rating change by accepting or applying for these loans?” God, no. Nothing wrong with getting loans.
We got it. We got PPP money. I’m not hiding from it. I’m not embarrassed. It’s a government program. They put it out to help businesses. I know competitors are getting it, so we got it. No pain at all in doing it. Weren’t able to get as much as I hoped because it’s based on 2019 staff levels but needless to say, we’re still grateful for it. No penalty there. Get in touch with your bank. Kate, “Can I get your opinion on how I can advise my buyer client that the seller has already done an inspection, is making the report available for us but our buyer wants to do their own and seller is not allowing?” Then your buyer’s got to make a decision.
That doesn’t surprise me, that the buyer is saying that, buyers often want their own inspections. I’m not a big fan of sellers doing inspections in advance. I never have been. Your buyer is going to have to make a decision. Laura Corcoran, “New construction, what will happen with them?” They’ll sell off the shelves. Unless you’re in a second home market, which maybe you are. If not, I don’t see any problem for new construction.
There’s not enough inventory. question, “Do you see town offices starting to get back in gear and handle sale-related activities, permits, and inspections for flips and new constructions, MLC certificates, et cetera?” Not to the extent that I’d like to have. I was actually on a call this morning with a government affairs expert in our state in reference to my dad’s company. They pave driveways. I see landscapers all around my neighborhood and people that pave driveways can’t get permits to pave driveways.
To me, it’s insane. These people are working outside and if landscapers can be out, why can’t they? Cities and towns are making their own decisions. I see a little bit of an improvement from cities and towns, but I don’t see it to the extent that I would like to see it. Jerry, “Any update on MLS PIN and coming soon to Mass?” Jerry, great question. I should have talked about this at company updates. I meant to, leave it to you to think of it.
MLS PIN has a board of directors meeting in late May and they are voting on it. I believe voting on it at that meeting. I would suspect that they will follow suit with the national association and basically eliminate coming soon is effectively what’s going to happen, but it hasn’t happened yet and that’s why we as a company, we’re recommending that agents do them. We’re helping agents do them. We have a whole coming soon product for our agents.
They’ve been doing it and getting a tremendous amount of leads. I think that once it goes to needing to do it through MLS and needing to list within so many days, I think you’re going to see them go away. More to come on that in a month. Debbie Rose, “What are your thoughts on unemployment assistance for a realtor? Do you feel realtors should apply although they can work?” Yes. If you need the money, I feel you should apply.
Just because you could work doesn’t mean you’re making money. If you’re not getting consistent income and you don’t have closing scheduled, then I don’t see why you wouldn’t apply if you can. That will help you. It’s a personal decision. I know some people have some opinions on that, but it’s up to you. I wouldn’t be ashamed of it if I were you to do that. Let’s see. There was another question here. Aldo says he just got approved for PPP. He’s an LLC. That’s what I keep hearing.
Most people say, “I’m an LLC, I’m a corporation, I have one employee.” Only two people do I know of that are 1099 realtors that got approved and they haven’t been funded yet, but I think they will get funded because they got approved. It’ll be interesting to see what happens. Elizabeth Foley, “People think that when inventory goes up, the prices will drop. Therefore they’re waiting until August.” Prices will not drop by August. I will guarantee you that won’t happen.
There’ll be some price adjustments in the summer like there always are, but they will not actually sustainably drop by then. If there is any drop, it’ll really be in the fall. Here’s the thing, the real test will come after the first of the year because I remember ’07 going into ’08. We had a slow fall and then we get to the first of the year. It didn’t pick up that much. That’s when we knew we were in trouble. I haven’t seen that happen since then and I don’t expect it to happen here. I think next year we’ll be gangbusters.
These buyers don’t want to wait. Some people you can’t convince them, “Hey wait, good luck.” Stay in touch with them, send them properties. I’ll tell you something though, right now, the last month it’s easier for people to say, “Well, I’ll just wait. Well, time the market.” People are naturally sheep. When they see other people buying and other people selling, at some point they’re going to say, “Well, cousin Bobby bought, my sister Susie, these people bought, I’m buying.” You’ll see their attitude change once it gets busier.
Hi, Mary Ellen, let’s see here. Other questions? Yes. Paul, you’re right, buddy. Paul’s the guy that joined us two years ago, doubled his business in two and a half years, doubled his business the next year and he’s been grinding and doing all the training that he possibly can. Jerry, I know you’re ready, buddy. Jerry has been a good confidant to me with some of this stuff we’ve been chatting about. What do you think’s going to happen with this? What do you think’s going to happen with that? I appreciate it.
Let’s see. Seven other comments. Lillian Leoni, “Can you collect unemployment if you have another job and get a W2–” Check with the state on that. “Do you have any thoughts on the multifamily market?” Yes, Coleen. Multifamily market, I’m a little bit more concerned about. I should actually spend a few minutes on that. Let me do that. There’s a law that went through in Massachusetts. The governor signed it. I don’t agree. I think it goes way too far. Don’t Pay Your Rent is trending on Twitter for May 1st.
They really made the law very one-sided. Obviously right now nobody should be evicted and kicked out on the street right now during COVID. It would be a disaster. Should they tie landlord’s hands to the point that they can’t even so much as send a notice? No. They shouldn’t and I think it’s wrong. Some attorneys are banding together to say that it violates the constitution and they are looking at that.
If it got overturned, I think that’d be a big deal but I wouldn’t be surprised if they amended that law, because many realize that it somewhat is motivating tenants to not pay their rent over the next few months because they know there’s no real penalty. That will put multifamily owners in a bad position. Now keep in mind, I love it when I hear people say, “Yes, but they stopped foreclosures too.” Who cares? That doesn’t mean anything.
They stopped foreclosures for the next 90 days. If people don’t pay their mortgage now they don’t get foreclosed on in the next 90 days. They get foreclosed on in a year. There’s a delay in Massachusetts, so this is not relief for landlords. Now they did say, “Well they insist that mortgage companies don’t require people to pay their mortgages for 90 days.” That’s another item that’s being questioned by the constitution.
I have a hard time believing that a state can tell a mortgage company you can’t be paid for 90 days, and I’ll bet you you’re going to see banks sue the state. Am I concerned about multi-families? Yes, I am more than I am about condos and single families, that’s for sure. Don Kelly, “Will more companies move away from depositing paper checks going forward?” I think so. We’re doing it. We’re working on it. We’re going to be talking to you about something that we’re coming out with.
We might even be talking about it next week. We’re linking up with another company to make it easier to get deposits in and get them in the even faster. All right, my friends. I think that’s a wrap. Good to see you all. Hopefully, that was helpful to you. Let me know what other questions that you have next week on Monday on the Lamacchia Realty page at 3:00 o’clock. I’m going to be going over a lot of statistics.
I’m going to be showing you how the market did this and how we’re now coming out of it and we’re actually going to do it over, I think Zoom, so that I can share different charts and graphs, because I’m always sitting here spit-balling to all of you and telling you about different things, but I don’t often actually show you the data unless we show you a blog. I’m actually going to go over with you in like a presentation format for all of our buyers and sellers and realtors are welcome to tune in. I hope to see you then. Thanks, my friends. Take care.