3 Ways to Beat Your Competition

3 Ways to Beat Your Competition

With a tight market this spring, competition for listings and buyers will be fiercer among real estate professionals. So how can you show clients you’d be the best representative for their housing needs? Forbes.com recently featured tips for salespeople to capture more of their market share, including personalizing your sales pitches, showing greater understanding for clients, and even reverting to mail.

Show a complete understanding of the situation your clients face. “If you can demonstrate that you understand the problems and challenges your prospect is trying to solve, you are much more likely to pique their interest,” writes Forbes.com columnist Dan Gingiss.

Tailor your services to each client. Take the time to learn their specific concerns and needs so that you can cater your services to them. Speak directly to your buyers’ or sellers’ concerns so they feel heard.

Don’t count out mail. “Email is fast, easy, and inexpensive,” Gingiss writes. “Snail mail is none of those things. But it stands out in a big way because most people receive little or no snail mail at work.” You might consider sending a handwritten note or a small, personalized knickknack to get attention. “A personal item sent via snail mail will often generate a response from a prospect, if for no other reason than guilt,” Gingiss notes. “It can be a genuine conversation starter compared to email, which almost always feels cold.”

Source: “3 Ways to Stand Out From All Other Salespeople,” Forbes.com (April 24, 2018)

Mortgage Rates Surge to 4-Year High

Mortgage Rates Surge to 4-Year High

Mortgage rates continued their climb this week, reaching their highest level since 2013.

“Higher Treasury yields, driven by rising commodity prices, more Treasury issuances, and the steady stream of solid economic news are behind the uptick in rates over the past week,” says Sam Khater, Freddie Mac’s chief economist. “Despite the increase in borrowing costs, demand for home purchase credit remains solid.” The Mortgage Bankers Association reported that mortgage applications were up 11 percent from a year ago.

Freddie Mac reports the following national averages with mortgage rates for the week ending April 26:

• 30-year fixed-rate mortgages averaged 4.58 percent, with an average 0.5 point, rising from last week’s 4.47 percent average. Last year at this time, 30-year rates averaged 4.03 percent.
• 15-year fixed-rate mortgages averaged 4.02 percent, with an average 0.4 point, rising from last week’s average of 3.94 percent. A year ago, 15-year fixed-rate mortgages averaged 3.27 percent.
• 5-year hybrid adjustable-rate mortgages averaged 3.74 percent, with an average 0.3 point, increasing from last week’s 3.67 percent average. A year ago, 5-year ARMs averaged 3.12 percent.

Source: Freddie Mac

Buyers Stretch Budgets to Be More Competitive

Buyers Stretch Budgets to Be More Competitive

Buyer demand is high but the number of homes for sale is low. This is prompting more shoppers to stretch their budgets, put less money down, or turn to adjustable-rate loans to prevail in a bidding war for a home.

“The frustration with the lack of inventory is, so many of the houses are going in bidding wars, and so you know you really have to step up to the plate and you have to do your homework to be a competitive buyer,” Patrick Clark, a real estate professional with Long & Foster in Philadelphia, told CNBC.

Higher mortgage rates and escalating home prices are prompting more home buyers to consider adjustable-rate mortgages, which offer lower initial rates for a set time before rising. Borrowers are being tempted on low down payment loan options, such as Fannie Mae- and Freddie Mac-backed 3 percent down payment loans. They’re also being lured to private lenders offering “nonprime loans” (the reimagined subprime loans). Read more: ‘Nonprime’ Loans Expand Mortgage Options

Buyers are feeling confident enough in their own finances to put more at stake to break into homeownership.

“When they’re more confident they are willing to stretch a little further,” says Mike Graff, a mortgage consultant with Prosperity Home Mortgage. “I think that some people realize, look, they’re not going to be in this house for 30 years, so moving to an ARM, when the rate is fixed for a period of time, they’re definitely more comfortable with something like that to lower their payment or to kind of stretch their budget a bit, so we have seen an uptick in that.”

Banks are showing more willingness to take on greater risk in jumbo loans, too.

Source: “Homebuyers Are Stretching Their Budgets and Mortgage Limits to Win Bidding Wars,” CNBC (April 24, 2018)

The Art Factor Boosts Housing

The Art Factor Boosts Housing

Public art has been linked to building booms and price increases for residential real estate. That’s why developers and city planners alike are working to weave art throughout new real estate projects and public spaces.

“Developers are beginning to see that if they want to attract tenants, they have to offer them more than just four walls,” says Barbara Goldstein, a public art planner and consultant in San Jose, Calif. “We’re going to see more and more of this kind of thing.”

The art effect can be seen in real estate across the country. For example, Chicago’s Millennium Park, which opened in 2004, features open-air galleries and interactive public art. After its opening, the prices of nearby condo buildings skyrocketed. Some in the city credited the “Millennium Park factor” for the area’s real estate growth by about 10,000 new units over the following decade and $1.4 billion in residential development (as estimated by an economic impact study by URS and Goodwin Williams Group).

A suburban Brookland neighborhood in northeast Washington, D.C. now features Monroe Street Market, which is a five-block mixed-use development that includes two buildings devoted to artists’ studios on the ground floor. The studios have glass doors and are part of an art walk in the community. When the development first opened in 2014, the median home list price in its ZIP code was $474,000. By 2017, the median price had jumped to $598,400, a 26.2 percent increase in three years, according to realtor.com® data.

The High Line in New York is a one-mile park that reclaimed an abandoned elevated railroad track to become a tourist attraction. The park features art and attracts 1.3 million visitors each year. The real estate prices and development near it have soared since its opening in 2014.

“People really want to be near these great, iconic places or things that make a city recognizable,” says Scott Stewart, executive director of the Millennial Park Foundation in Chicago. “A lot of these spaces where you’ve created something spectacular out of something less than desirable … those are attractive. They naturally draw people to them.”

Source: “As Public Art Goes Up, So Do Nearby Home Prices,” realtor.com® (April 25, 2018)

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Bidding Wars Heat Up in Unassuming Towns

Bidding Wars Heat Up in Unassuming Towns

You’d expect bidding wars in major cities such as San Francisco, Boston, and New York—but Akron, Ohio? The Midwestern town has seen the biggest spike in multiple-offer situations on listings in the nation, according to realtor.com®. And as housing demand picks up in the spring, ushering in the typically busy selling season across the nation, other unassuming metros are becoming hotbeds for buyer competition. “Multiple-offer scenarios are no longer reserved for the usual big, fast-moving markets,” says Javier Vivas, director of economic research at realtor.com®. “Demand for homes has spilled outward into secondary, smaller markets, and more buyers are gearing up to face fierce competition in more places around the country.”

Realtor.com® pinpointed the cities that have seen the most acute spikes in bidding wars by looking at the percentage of homes that have sold above their asking prices. The site evaluated listing and sales data from March 2015 to February 2016 and then compared it to data from March 2017 to February 2018. The following seven locales saw the biggest upticks in the percentages of homes selling above asking price:

1. Akron, Ohio

• Share of homes selling above ask: 20.6 percent
• Increase in the share of homes selling above ask: 91.7 percent

2. Worcester, Mass. 

• Share of homes selling above ask: 41.5 percent
• Increase in the share of homes selling above ask: 88.1 percent

3. Lexington, Ky.

• Share of homes selling above ask: 22.7 percent
• Increase in the share of homes selling above ask: 86.4 percent

4. Irvine, Calif.

• Share of homes selling above ask: 30.3 percent
• Increase in the share of homes selling above ask: 85.5 percent

5. Greensboro, N.C.

• Share of homes selling above ask: 29 percent
• Increase in the share of homes selling above ask: 81 percent

6. Sioux Falls, S.D.

• Share of homes selling above ask: 32.8 percent
• Increase in the share of homes selling above ask: 74.2 percent

7. Madison, Wis.

• Share of homes selling above ask: 40.9 percent
• Increase in the share of homes selling above ask: 73.4 percent

Source: “Housing Knife Fights! 10 Surprising Cities Where Bidding Wars Are Booming,” realtor.com® (April 23, 2018)