Just months ago, the housing market in the United States was still in overdrive with surging home prices, low interest rates, and an overwhelming demand for homes. As a result, the market saw a barrage of bidding wars as listings were snapped up in mere hours or days — a home sellers’ market.
But things have taken a shift towards a housing recession in terms of slowing home sales and home building. According to the National Association of Realtors, July 2022 marked the sixth consecutive month of decline in sales of existing homes as housing market activity fell 5.9% from June 2022.
On top of that, we’re also witnessing global layoffs, slower job growth, and rising interest rates on home mortgages which resulted in home-purchase agreements falling through. As a consequence, there are now an increased number of home for sale in the housing market — signs the market is starting to shift in home buyers’ favor.
How does the housing market cooldown affect your real estate marketing efforts?
If you’re a real estate professional, it’s important to stay ahead of the curve and be in the know of the latest market trends so you can better advise and guide your clients. It’s crucial to be aware of the competition in your area.
Having more homes on the market means you need to make sure your listing stands out. This could mean anything from making an effort in staging to make it more appealing to home buyers or making sure your listing visuals are of high quality.
Now, let’s touch a little on the clients you serve.
In a cooling market, home sellers may need to adjust their expectations in terms of how quickly their home will sell and for how much. They may also find themselves needing to be more patient and be willing to negotiate more on price. But, what is the right price? This piece of information should come from you based on the analysis and knowledge you have of the area you operate in.
Home buyers, on the other hand, may find that there are more homes to choose from and that they have more negotiating power when it comes to price. However, they also face increased interest rates on home mortgages which could affect their budget. It is then your responsibility to help them make informed decisions based on their affordability.
As a real estate professional, it is your role to help both home buyers and sellers navigate the market and find the best deal possible for both parties.
Help your clients make informed decisions
While home buyers expect real estate agents to help them find a home that meets their needs and budget, home sellers expect real estate agents to help them list their home, market their home, and find a buyer. Because they don’t possess the same knowledge and information you have.
Most people tend to forget that marketing efforts don’t end at the first point of contact. Effective marketing is when you can help clients complete the task they set out to do—whether it’s buying or selling a house—and make informed decisions along the way.
Give your clients the insights they need about the current state of the housing market and the best ways to go about it. Make sure they never feel like they have to seek for information or help elsewhere before, during, and after the process.
As the housing market starts to cool down, here are some key marketing efforts to keep in mind:
1. Price your listings competitively
In a buyers’ market, it’s important to be aware that there will be more homes for sale and less buyers looking to purchase. As a result, it’s important to price your listing competitively in order to attract buyers. Do a comparative market analysis (CMA) of similar homes in your area that have recently sold so you can get an idea of what your listing is worth and price it accordingly.
2. Stand out from the competition
Since there will be more homes on the market, it’s important to make your listing stand out. Take great photos using a professional real estate photographer, add floor plans to your listings, and write a compelling description that highlights the best features of your listing. Advise your clients to offer incentives such as a home warranty or closing cost assistance to sweeten the deal for buyers.
3. Provide needed information for a smoother negotiation process
In a buyers’ market, buyers will have more negotiating power so it’s important that your clients are willing to be flexible on terms. This could include being open to a shorter escrow period, a lower sales price, or including certain appliances or furniture in the sale. Ensure both parties have enough information of the property to end up with a win-win situation.
4. Advice home buyers to get pre-approved for a mortgage
In a buyers’ market, sellers will be more likely to accept offers from buyers who are pre-approved for a mortgage. This shows that they are a serious buyer and can afford to purchase the home. Help your client scout for and a lender to get pre-approved for a mortgage before starting their home search.
5. Ensure your clients have realistic budgets
It’s important to have a realistic budget when buying a home in a buyers’ market. This budget should include not only the purchase price of the home, but also closing costs, moving costs, and any necessary repairs or updates. Make sure your clients are aware of all the costs involved in the process and work within their budget.
6. Move quickly when the time is right
In a buyers’ market, homes can sell quickly so it’s important to be prepared to move quickly when your client finds a home they’re interested in. Guide them through the negotiation process, and ensure they have their financing in order and be ready to make an offer as soon as they find a home you like.
Conclusion
The housing market may be shifting towards a housing recession due to increased interest rates and other market variables. But that doesn’t mean home sales will come to a standstill. To protect the interest of your clients, and your own, bear these marketing efforts in mind:
- Price your listings competitively to attract buyers
- Stand out from the competition with high-quality visuals and floor plans
- Provide needed information for a win-win negotiation process
- Advice home buyers to get pre-approved for a mortgage
- Ensure your clients have realistic budgets and work within expectations
- Move quickly and make an offer when the time is right
Last but not least, it is even more crucial to stay ahead of the curve with the latest market trends in trying times like these so you can shift your marketing efforts accordingly. Remember that the marketing process goes beyond the closing of a sale. Your clients shouldn’t feel the need to seek information or help somewhere else at any given time.
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